Climate Tipping Points and Optimal Emissions

As the world temperature rises, due to carbon dioxide (CO2) emissions from human economic activities, the risk of tipping points in the climate system becomes more concrete. This risk affects the social cost of carbon, that is, the marginal damage of increasing carbon emissions. In this paper, I study the relationship between the risk of tipping, optimal emissions, and the social cost of carbon. To do so, I solve a social-planner integrated model (Hambel et al., 2021), with a stylised ice-albedo feedback in the climate dynamics (Ashwin & Von Der Heydt, 2020). I model a tipping point induced by the ice–albedo feedback and study how this affects optimal abatement. The tipping point affect temperature dynamics, and as a consequence optimal emissions, in three ways. First, it introduces a non-linear increase in temperature. Second, it makes positive temperature shocks more persistent than negative ones. Third, it introduces a jump in the abatement necessary to revert temperatures to the pre-tipping-point level. I show that, in this context, it is crucial not only to quickly reachnet-zero emissions, but to also flatten the emission curve to reduce the risk of tipping