Center for Environmental Policy and Administration

Uncertainty and Climate Change Policy Design

Author:Peter Wilcoxen with Warwick J. McKibbin
Date: 2009
Publication:Journal of Policy Modeling, 31(3), pp. 463-477, May-June.

This paper argues that the problem with the targets and timetable approach to climate policy is that it ignores uncertainty about costs. An alternative approach on coordinating short run prices within a long run emissions targeting framework is outlined. A global economic model is used to demonstrate the nature of the economic uncertainty about climate policy and the gains to be achieved by equalizing carbon prices across countries. The paper also shows that although price and quantity-based systems appear to be similar they can fundamentally change the international transmission of economic shocks.


Peter J Wilcoxen
Center for Environmental Policy and Administration
The Maxwell School, Syracuse University
Revised 11/30/2010 20:58:42