Evolution of modeling of the economics of global warming: changes in the DICE model, 1992–2017



Many areas of the natural and social sciences involve complex systems that link together multiple sectors. Integrated assessment models (IAMs) are approaches that integrate knowledge from two or more domains into a single framework, and these are particularly important for climate change. One of the earliest IAMs for climate change was the DICE/RICE family of models, first published in Nordhaus (Science 258:1315–1319, 1992a), with the latest version in Nordhaus (2017, 2018). A difficulty in assessing IAMs is the inability to use standard statistical tests because of the lack of a probabilistic structure. In the absence of statistical tests, the present study examines the extent of revisions of the DICE model over its quarter-century history. The study finds that the major revisions have come primarily from the economic aspects of the model, whereas the environmental changes have been much smaller. Particularly, sharp revisions have occurred for global output, damages, and the social cost of carbon. These results indicate that the economic projections are the least precise parts of IAMs and deserve much greater study than has been the case up to now, especially careful studies of long-run economic growth (to 2100 and beyond). Additionally, the approach developed here can serve as a useful template for IAMs to describe their salient characteristics and revisions for the broader community of analysts.

JEL classification

Q5 Q54 H4 


Funding information

The research reported here was supported by the US National Science Foundation Award GEO-1240507 and the US Department of Energy Award DE-SC0005171-001.

Compliance with ethical standards

Conflict of interest

The author declares that he has conflicts of interest.


  1. Blanford GJ, Kriegler E, Tavoni M (2014) Harmonization vs. fragmentation: overview of climate policy scenarios in EMF27. Clim Chang 123(3–4):383–396CrossRefGoogle Scholar
  2. Christensen P, Gillingham K, Nordhaus W (2018) Uncertainty in forecasts of long-run productivity growth. Proceedings National Academy of SciencesGoogle Scholar
  3. Fukač M, Pagan A (2010) Limited information estimation and evaluation of DSGE models. J Appl Econ 25(1):55–70CrossRefGoogle Scholar
  4. Gillingham K, Nordhaus WD, Anthoff D, Blanford G, Bosetti V, Christensen P, McJeon H, Reilly J, Sztorc P (2018) Modeling uncertainty in climate change: a multi-model comparison. J Assoc Environ Resour Econ (forthcoming)Google Scholar
  5. Goettle RJ, Ho MS, Slesnick DT, Wilcoxen PJ, Jorgenson DW (2007) IGEM, an Inter-Temporal General Equilibrium Model of the U.S. Economy with Emphasis on Growth, Energy, and the Environment. U.S. Environmental Protection AgencyGoogle Scholar
  6. Hansen LP, Heckman JJ (1996) The empirical foundations of calibration. J Econ Perspect 10(1):87–104CrossRefGoogle Scholar
  7. IPCC (1990) In: Houghton JT, Jenkins GJ, Ephraums JJ (eds) Climate change: the IPCC Scientific Assessment. Cambridge University Press, CambridgeGoogle Scholar
  8. IPCC (2014) Thomas Stocker, ed., Climate change 2013: the physical science basis: Working Group I contribution to the Fifth assessment report of the Intergovernmental Panel on Climate Change. Cambridge University Press, New YorkGoogle Scholar
  9. Kriegler E, Riahi K, Bauer N, Schwanitz VJ, Petermann N, Bosetti V, Marcucci A, Otto S, Paroussos L, Rao S, Currás TA (2015) Making or breaking climate targets: the AMPERE study on staged accession scenarios for climate policy. Technol Forecast Soc Chang 90:24–44CrossRefGoogle Scholar
  10. National Research Council (1979) Energy in transition, 1985–2010: final report of the committee on nuclear and alternative energy systems. National Research Council, National Academy of Sciences, WH Freeman & CompanyGoogle Scholar
  11. Nordhaus WD (1992a) An optimal transition path for controlling greenhouse gases. Science 258:1315–1319CrossRefGoogle Scholar
  12. Nordhaus WD (1992b) The DICE model: background and structure, Cowles Foundation Discussion Paper 1009, February, available at http://cowles.yale.edu/publications/cfdp
  13. Nordhaus WD (1994) Managing the global commons: the economics of climate change. MIT Press, CambridgeGoogle Scholar
  14. Nordhaus W (2008) A question of balance: weighing the options on global warming policies. Yale University Press, New HavenGoogle Scholar
  15. Nordhaus W (2017) The social cost of carbon: updated estimates, Proceedings of the U. S. National Academy of Sciences, January 31Google Scholar
  16. Nordhaus W (2018) Projections and uncertainties about climate change in an era of minimal climate policies, forthcoming, American Economic Journal: Economic PolicyGoogle Scholar
  17. Nordhaus W, Sztorc P (2013) DICE 2013R: introduction and user’s manual, October 2013, available at http://www.econ.yale.edu/~nordhaus/homepage/ documents/DICE_Manual_100413r1.pdf
  18. Nordhaus W, Yohe G (1983) Future carbon dioxide emissions from fossil fuels, in National Research Council-National Academy of Sciences, Changing Climate, Washington, D.C., National Academy Press, 1983Google Scholar

Copyright information

© Springer Science+Business Media B.V., part of Springer Nature 2018

Authors and Affiliations

  1. 1.Yale UniversityNew HavenUSA

Personalised recommendations