Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2012-08-20
Number: 12-085/2
Author-Name: Sweder van Wijnbergen
Author-Workplace-Name: University of Amsterdam
Author-Name: Tim Willems
Author-Workplace-Name: Oxford University
Title: Optimal Learning on Climate Change: Why Climate Skeptics should reduce Emissions
Abstract: Climate skeptics argue that the possibility that global warming is exogenous implies that we should not take additional action towards reducing greenhouse gas emissions until we know more. However this paper shows that even climate skeptics have an incentive to reduce emissions: such a change of direction facilitates their learning process on the causes of global warming. Since the optimal policy action depends on these causes, they are valuable to know. Although an increase in emissions would also ease learning, that option is shown to be inferior because emitting greenhouse gases is irreversible. Consequently the policy implications of the different positions in the global warming debate turn out to coincide - thereby diminishing the relevance of this debate from a policy perspective. Uncertainty is no reason for inaction.
Classification-JEL: D83, Q54, Q58
Keywords: climate policy, global warming, climate skepticism, active learning, irreversibilities
File-Url: https://papers.tinbergen.nl/12085.pdf
File-Format: application/pdf
File-Size: 428306 bytes
Handle: RePEc:tin:wpaper:20120085