Optimal climate policies under the shadow of social tipping

We propose a framework that allows to integrate social (tipping) dynamics into a DICE-style IAM model, in which a policy maker determines abatement effort and savings. The policy maker maximizes the sum of social welfare and a political penalty/reward, depending on whether the majority of the population opposes (penalty) or supports (reward) more ambitious abatement policies. The social process itself depends inter alia on observable climate impacts. We provide numerical simulations that illustrate the impact of the tipping process on policy choices which in turn are built around a total cost of carbon that embraces both the "classical" social cost of carbon and a political cost of carbon. Our initial findings illustrate (i) the considerable scope for political penalties (rewards) to stifle (boost) abatement policies; (ii) an incentive for the policy maker to distort policies in a way that boosts political support; and (iii) a considerable deviation between the total cost of carbon and the social cost of carbon. We argue how the model can be used for the purpose of understanding climate policy making from a "social dynamics" perspective.