The impact of climate risk valuation on the regional mitigation strategies

Abstract

Different assumptions and methodologies prompt divergent policy recommendationgs for combatting climate change. Although climate scientists would like to be as precise as possible, policymakers with different attitudes towards climate change will always choose the result that matches their own value judgments. This paper discusses the impact of climate change attitudes on optimal mitigation in 15 regions. The climate change attitude is refined by a meta-analysis of 27 climate damage estimations and distilled into five damage functions. The optimal mitigation is calculated using the non-cooperative scenario of the regional integrated model of climate economy (RICE). The results show that the optimal mitigation paths in developing countries are more sensitive to climate change attitudes than they are in developed countries. In 2100, the range of optimal emissions represents 20% of the average optimal emissions by developing countries, which is twice the value of average optimal emissions by developed countries. The average social carbon cost in developing countries is 20 times higher than that in developed countries. This large uncertainty may be the combined result of high shadow prices of capital and large quantities of future emissions in these developing countries.