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Discussion Paper Details

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Title: Uncertainty, Climate Change and the Global Economy

Author(s): Torsten Persson and David von Below

Publication Date: October 2008

Keyword(s): Climate-economy models, Global warming and Monte Carlo study

Programme Area(s): Development Economics, International Macroeconomics and Public Economics

Abstract: The paper illustrates how one may assess our comprehensive uncertainty about the various relations in the entire chain from human activity to climate change. Using a modified version of the RICE model of the global economy and climate, we perform Monte Carlo simulations, where full sets of parameters in the model's most important equations are drawn randomly from pre-specified distributions, and present results in the forms of fan charts and histograms. Our results suggest that under a Business-As-Usual scenario, the median increase of global mean temperature in 2105 relative to 1900 will be around 4.5 °C. The 99 percent confidence interval ranges from 3.0 °C to 6.9 °C. Uncertainty about socio-economic drivers of climate change lie behind a non-trivial part of this uncertainty about global warming.

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Bibliographic Reference

Persson, T and von Below, D. 2008. 'Uncertainty, Climate Change and the Global Economy'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=7024