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Environmental Modeling & Assessment

, Volume 17, Issue 1–2, pp 163–175 | Cite as

Anticipating Climate Threshold Damages

  • Alexander LorenzEmail author
  • Matthias G. W. Schmidt
  • Elmar Kriegler
  • Hermann Held
Article

Abstract

Several integrated assessment studies have concluded that future learning about the uncertainties involved in climate change has a considerable effect on welfare but only a small effect on optimal short-term emissions. In other words, learning is important but anticipation of learning is not. We confirm this result in the integrated assessment model “model of investment and technological development” for learning about climate sensitivity and climate damages. If learning about an irreversible threshold is included, though, we show that anticipation can become crucial both in terms of necessary adjustments of pre-learning emissions and resulting welfare gains. We specify conditions on the time of learning and the threshold characteristic, for which this is the case. They can be summarized as a narrow “anticipation window.”

Keywords

Epistemic uncertainty Learning Anticipation Value of information Value of anticipation Threshold damages 

Notes

Acknowledgements

We are grateful for the helpful comments of two anonymous reviewers. A.L. acknowledges support by the German National Science Foundation and M.G.W.S. acknowledges funding by the BMBF project PROGRESS (03IS2191B).

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Copyright information

© Springer Science+Business Media B.V. 2011

Authors and Affiliations

  • Alexander Lorenz
    • 1
    • 2
    Email author
  • Matthias G. W. Schmidt
    • 1
  • Elmar Kriegler
    • 1
  • Hermann Held
    • 1
    • 3
  1. 1.Potsdam Institute for Climate Impact ResearchPotsdamGermany
  2. 2.Environmental Change Institute, School of Geography and the EnvironmentUniversity of OxfordOxfordUK
  3. 3.University of Hamburg & Klima Campus HamburgHamburgGermany

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