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Optimal Scheduling of Greenhouse Gas Emissions under Carbon Budgeting and Policy Design

Author

Listed:
  • Elettra Agliardi

    (University of Bologna)

  • Anastasios Xepapadeas
Abstract
We solve a problem of optimal scheduling of GHG emissions for a climate change policy that is consistent with the COP21 targets and has to be monitored at a fixed time horizon. Our model is dynamic and stochastic where production, and therefore well-being, increase in carbon emissions, but, at the same time, anthropogenic cumulative emissions determine a super-linear impact on the observed stochastic damage. We compare the optimal unconstrained path of emissions and the constrained path of emissions and evaluate when the carbon budget is exhausted. A sensitivity analysis is also developed to examine the effects of resilience, impact of emissions on damage and uncertainty. Our results have direct implications in terms of policy and show that uncertainty and the way we introduce it in the model are likely to influence the efficacy of the climate change policies for the foreseeable future

Suggested Citation

  • Elettra Agliardi & Anastasios Xepapadeas, 2018. "Optimal Scheduling of Greenhouse Gas Emissions under Carbon Budgeting and Policy Design," DEOS Working Papers 1808, Athens University of Economics and Business.
    • Handle: RePEc:aue:wpaper:1808
    as

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    File URL: http://wpa.deos.aueb.gr/docs/Optimal.Scheduling.of.Greenhouse.Gas.Emissions.pdf
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    References listed on IDEAS

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    Cited by:

    1. Lucas Bretschger & Karen Pittel, 2020. "Twenty Key Challenges in Environmental and Resource Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 77(4), pages 725-750, December.
    2. Lucas Bretschger & Karen Pittel, 2019. "Twenty Key Questions in Environmental and Resource Economics," CER-ETH Economics working paper series 19/328, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.

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