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Selfish Bureaucrats And Policy Heterogeneity In Nordhaus’ Dice

In: CLIMATE CHANGE ECONOMICS Commemoration of Nobel Prize for William Nordhaus

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  • RICHARD S. J. TOL
Abstract
Nordhaus’ seminal DICE model assesses first-best climate policy, a useful but unrealistic yardstick. I propose a measure of policy inefficacy if carbon prices are heterogeneous and use observed prices to recalibrate the DICE model. I introduce a Niskanen-inspired model of climate policy with selfish bureaucrats, and calibrate it to carbon dioxide emissions in the European Union and the policy models used by the IPCC. This model also implies a measure of policy inefficacy that I use to recalibrate DICE. The optimal global mean temperature is 1°C perhaps 2°C higher in the recalibrated than in the original DICE model.

Suggested Citation

  • Richard S. J. Tol, 2021. "Selfish Bureaucrats And Policy Heterogeneity In Nordhaus’ Dice," World Scientific Book Chapters, in: Robert Mendelsohn (ed.), CLIMATE CHANGE ECONOMICS Commemoration of Nobel Prize for William Nordhaus, chapter 6, pages 77-92, World Scientific Publishing Co. Pte. Ltd..
    • Handle: RePEc:wsi:wschap:9789811247699_006
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    More about this item

    Keywords

    William Nordhaus; Climate Change; Integrated Assessment; Climate Change Adaptation; Climate Change Policy; Climate Clubs;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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