On the welfare economics of climate change
<p>The three constituent chapters of this thesis tackle independent, self-contained research questions, all concerning welfare economics in general and its application to climate change policy in particular.</p> <p>Climate change is a policy problem for which the costs and benefits...
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| Format: | Thesis |
| Language: | English |
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2014
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| _version_ | 1797088786464636928 |
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| author | Dennig, F |
| author2 | Quah, J |
| author_facet | Quah, J Dennig, F |
| author_sort | Dennig, F |
| collection | OXFORD |
| description | <p>The three constituent chapters of this thesis tackle independent, self-contained research questions, all concerning welfare economics in general and its application to climate change policy in particular.</p> <p>Climate change is a policy problem for which the costs and benefits are distributed unequally across space and time, as well as one involving a high degree of uncertainty. Therefore, cost-benefit analysis of climate policy ought to be based on a welfare function that is sufficiently sophisticated to incorporate the three dimensions of aggregation: time, risk and space. Chapter 1 is an axiomatic treatment of a stylised model in which all three dimensions appear. The main result is a functional representation of the social welfare function for policy assessment in such situations.</p> <p>Chapter 2 is a numerical mitigation policy analysis. I modify William Nordhaus' RICE-2010 model by replacing his social welfare function with one that allows for different degrees of inequality aversion along the regional and inter-temporal dimension. I find that, holding the inter-temporal coefficient of inequality aversion fixed, performing the optimisation with a greater degree of regional inequality reduces the optimal carbon tax relative to treating the world as a single aggregate consumer.</p> <p>In Chapter 3 I analyse climate policy from the point of view of intergenerational transfers. I propose a system of transfers that allows future generations to compensate the current one for its mitigation effort and demonstrate the effects in an OLG model. When the marginal benefit to a - possibly distant - future generation is greater than the cost of compensating the current generation for its abatement effort, a Pareto improvement is possible by a combination of mitigation policy and transfer payments. I show that under very general assumptions the business-as-usual outcome is Pareto dominated by such policies and derive the conditions for the set of climate policies that are not dominated thus.</p> |
| first_indexed | 2024-03-07T02:55:03Z |
| format | Thesis |
| id | oxford-uuid:aefca5e4-147e-428b-b7a1-176b7daa0f85 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T02:55:03Z |
| publishDate | 2014 |
| record_format | dspace |
| spelling | oxford-uuid:aefca5e4-147e-428b-b7a1-176b7daa0f852022-03-27T03:46:31ZOn the welfare economics of climate changeThesishttp://purl.org/coar/resource_type/c_db06uuid:aefca5e4-147e-428b-b7a1-176b7daa0f85EconomicsEnglishOxford University Research Archive - Valet2014Dennig, FQuah, J<p>The three constituent chapters of this thesis tackle independent, self-contained research questions, all concerning welfare economics in general and its application to climate change policy in particular.</p> <p>Climate change is a policy problem for which the costs and benefits are distributed unequally across space and time, as well as one involving a high degree of uncertainty. Therefore, cost-benefit analysis of climate policy ought to be based on a welfare function that is sufficiently sophisticated to incorporate the three dimensions of aggregation: time, risk and space. Chapter 1 is an axiomatic treatment of a stylised model in which all three dimensions appear. The main result is a functional representation of the social welfare function for policy assessment in such situations.</p> <p>Chapter 2 is a numerical mitigation policy analysis. I modify William Nordhaus' RICE-2010 model by replacing his social welfare function with one that allows for different degrees of inequality aversion along the regional and inter-temporal dimension. I find that, holding the inter-temporal coefficient of inequality aversion fixed, performing the optimisation with a greater degree of regional inequality reduces the optimal carbon tax relative to treating the world as a single aggregate consumer.</p> <p>In Chapter 3 I analyse climate policy from the point of view of intergenerational transfers. I propose a system of transfers that allows future generations to compensate the current one for its mitigation effort and demonstrate the effects in an OLG model. When the marginal benefit to a - possibly distant - future generation is greater than the cost of compensating the current generation for its abatement effort, a Pareto improvement is possible by a combination of mitigation policy and transfer payments. I show that under very general assumptions the business-as-usual outcome is Pareto dominated by such policies and derive the conditions for the set of climate policies that are not dominated thus.</p> |
| spellingShingle | Economics Dennig, F On the welfare economics of climate change |
| title | On the welfare economics of climate change |
| title_full | On the welfare economics of climate change |
| title_fullStr | On the welfare economics of climate change |
| title_full_unstemmed | On the welfare economics of climate change |
| title_short | On the welfare economics of climate change |
| title_sort | on the welfare economics of climate change |
| topic | Economics |
| work_keys_str_mv | AT dennigf onthewelfareeconomicsofclimatechange |