Warming the World: Economic Models of Global Warming

by William D. Nordhaus, Joseph Boyer

Overview

This book presents in detail a pair of models of the economics of climate change. The models, called RICE-99 (for the Regional Dynamic Integrated model of Climate and the Economy) and DICE-99 (for the Dynamic Integrated Model of Climate and the Economy) build on the authors' earlier work, particularly their RICE and DICE models of the early 1990s.

Humanity is risking the health of the natural environment through a myriad of interventions, including the atmospheric emission of trace gases such as carbon dioxide, the use of ozone-depleting chemicals, the engineering of massive land-use changes, and the destruction of the habitats of many species. It is imperative that we learn to protect our common geophysical and biological resources. Although scientists have studied greenhouse warming for decades, it is only recently that society has begun to consider the economic, political, and institutional aspects of environmental intervention. To do so raises formidable challenges of data modeling, uncertainty, international coordination, and institutional design.

Attempts to deal with complex scientific and economic issues have increasingly involved the use of models to help analysts and decision makers understand likely future outcomes as well as the implications of alternative policies. This book presents in detail a pair of models of the economics of climate change. The models, called RICE-99 (for the Regional Dynamic Integrated model of Climate and the Economy) and DICE-99 (for the Dynamic Integrated Model of Climate and the Economy) build on the authors' earlier work, particularly their RICE and DICE models of the early 1990s. They can help policy makers design better economic and environmental policies.

Product Details

ISBN-13:	9780262640541
Publisher:	MIT Press
Publication date:	08/11/2003
Series:	The MIT Press
Edition description:	New Edition
Pages:	244
Product dimensions:	6.00(w) x 9.00(h) x 0.60(d)
Age Range:	18 Years

About the Author

William D. Nordhaus is Sterling Professor of Economics at Yale University.

Joseph Boyer is an Associate in Research at Yale University.

Table of Contents

List of Tables
List of Figures
Preface
I Developing the RICE and DICE Models
1 Introduction
2 The Structure and Derivation of RICE-99
Overview of Approach
Model Description
Derivation of the Equations of RICE-99
Equilibrium in the Market for Carbon-Energy
Policy in RICE-99
3 Calibration of the Major Sectors
Regional Specification
Calibration of Production Function
Exogenous Trend Parameters
Carbon Supply
The Carbon Cycle and Other Radiative Forcings
The Climate Module
4 The Impacts of Climate Change
Early Impact Studies
The Present Approach
Discussion of Individual Sectors
Impact Indices as Functions of Temperature
Calibration of the RICE-99 Damage Function
Major Results and Conclusions
5 The DICE-99 Model
Model Structure
Calibration
6 Computational Procedures
Computer Programs for RICE and DICE
Solution Approach in EXCEL--RICE-99
Solution Approach in GAMS--RICE-99
DICE
GAMS versus EXCEL
II Policy Applications of the RICE Model
7 Efficient Climate-Change Policies
Alternative Approaches to Climate-Change Policy
Detailed Description of Different Policies
Major Results
8 Economic Analysis of the Kyoto Protocol
Climate-Change Policy and the Kyoto Protocol
Economic Analysis of the Kyoto Protocol
Major Results
Findings and Conclusions
9 Managing the Global Commons
Background
Summary of the Model and Analysis
Major Results
Analysis of the Kyoto Protocol
Concluding Thoughts
Appendix A: Equations of RICE-99 Model
Appendix B: Equations of DICE-99 Model
Appendix C: Variable List
Appendix D: GAMS Code for RICE-99, Base Case andOptimal Case
Appendix E: GAMS Code for DICE-99
References
Index

What People are Saying About This

Kenneth J. Arrow

In Warming the World, Nordhaus and Boyer have brought the latest developments in the fields into dynamic models for evaluating the consequences of global warming due to human causes. In particular, they have incorporated more sophisticated analysis of the changes in greenhouse gas concentrations and the latest evidence on the damage caused by global warming. Any serious analyst or policymaker must start with the analysis of this book.

Dale W. Jorgenson

This book is essential reading for anyone engaged in research on the economics of climate change. Nordhaus commands this important field.

Endorsement

Nordhaus, a distinguished economist, has been engaged with the greenhouse issue for more than twenty years. He is the dean of the optimization modellers. Here is his latest version, in crisp English and transparent mathematics. You cannot do better.

—Thomas C. Schelling, School of Public Affairs, University of Maryland

From the Publisher

This is the most important and comprehensive analysis so far of the economic consequences and policy implications of climate change. The results are always interesting sometimes surprising. A further research agenda opens up.

—Robert M. Solow, Institute Professor of Economics, Emeritus, MIT, and Nobel Laureate in Economics (1987)

In Warming the World, Nordhaus and Boyer have brought the latest developments in the fields into dynamic models for evaluating the consequences of global warming due to human causes. In particular, they have incorporated more sophisticated analysis of the changes in greenhouse gas concentrations and the latest evidence on the damage caused by global warming. Any serious analyst or policymaker must start with the analysis of this book.

—Kenneth J. Arrow, Professor of Economics Emeritus, Stanford University, and Nobel Laureate in Economics (1972)

This book is essential reading for anyone engaged in research on the economics of climate change. Nordhaus commands this important field.

—Dale W. Jorgenson, Frederic Eaton Abbe Professor of Economics, Harvard University

Nordhaus, a distinguished economist, has been engaged with the greenhouse issue for more than twenty years. He is the dean of the optimization modellers. Here is his latest version, in crisp English and transparent mathematics. You cannot do better.

—Thomas C. Schelling, School of Public Affairs, University of Maryland

Robert M. Solow

This is the most important and comprehensive analysis so far of the economic consequences and policy implications of climate change. The results are always interesting sometimes surprising. A further research agenda opens up.

Thomas C. Schelling

Nordhaus, a distinguished economist, has been engaged with the greenhouse issue for more than twenty years. He is the dean of the optimization modellers. Here is his latest version, in crisp English and transparent mathematics. You cannot do better.

Editorial Reviews

Warming the World should be required reading for policy makers, politicians, environmentalists, and the concerned public.—Thomas Gale Moore, Journal of Political Economy—

From the Publisher

Warming the World should be required reading for policy makers, politicians, environmentalists, and the concerned public.

—Thomas Gale Moore, Journal of Political Economy

Reviews

Warming the World should be required reading for policy makers, politicians, environmentalists, and the concerned public.

Journal of Political Economy - Thomas Gale Moore