Parameter uncertainties in evaluating climate policies with dynamic integrated climate-economy model

Abstract

Climate change is a complex issue with signifcant scientifc and socio-economic uncertainties, making it difcult to assess the efectiveness of climate policies. Dynamic Integrated Climate-Economy Models (DICE models) have been widely used to evaluate the impact of diferent climate policies. However, since climate change, long-term economic development, and their interactions are highly uncertain, an accurate assessment of investments in climate change mitigation requires appropriate consideration of climatic and economic uncertainties. Moreover, the results of these models are highly dependent on input parameters and assumptions, which can have signifcant uncertainties. To accurately assess the impact of climate policies, it is crucial to incorporate uncertainties into these models. In this paper, we explore the impact of parameter uncertainties on the evaluation of climate policies using DICE models. Our goal is to understand whether uncertainty signifcantly afects decision-making, particularly in global warming policy decisions. By integrating climatic and economic uncertainties into the DICE model, we seek to identify the cumulative impact of uncertainty on climate change. Overall, this paper aims to contribute to a better understanding of the challenges associated with evaluating climate policies using DICE models, and to inform the development of more efective policy measures to address the urgent challenge of climate change.