EGU General Assembly 2020
© Author(s) 2020. This work is distributed under
the Creative Commons Attribution 4.0 License.

Are economists getting climate dynamics right and does it matter?

Armon Rezai1, Simon Dietz2, Frederick van der Ploeg3, and Frank Venmans4
Armon Rezai et al.
  • 1WU Wien, Ecological Economics , Socio-economics, Austria (
  • 2London School of Economics and Political Science, London, UK
  • 3University of Oxford, Oxford, UK
  • 4University of Mons, Mons, Belgium

We show that several of the most important economic models of climate change produce climate dynamics inconsistent with the current crop of models in climate science. First, most economic models exhibit far too long a delay between an impulse of CO2 emissions and warming. Second, few economic models incorporate positive feedbacks in the carbon cycle, whereby CO2 uptake by carbon sinks diminishes at the margin with increasing cumulative CO2 uptake and temperature. These inconsistencies affect economic prescriptions to abate CO2 emissions. Controlling for how the economy is represented, different climate models result in significantly different optimal CO2 emissions. A long delay between emissions and warming leads to optimal carbon prices that are too low and too much sensitivity of optimal carbon prices to the discount rate. Omitting positive carbon cycle feedbacks also leads to optimal carbon prices that are too low. We conclude it is important for policy purposes to bring economic models in line with the state of the art in climate science.

How to cite: Rezai, A., Dietz, S., van der Ploeg, F., and Venmans, F.: Are economists getting climate dynamics right and does it matter?, EGU General Assembly 2020, Online, 4–8 May 2020, EGU2020-20039,, 2020

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