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How can a decision-maker assess the potential of environmental policies when a group of experts provides divergent estimates on their effectiveness? To address this question, we propose and analyze a variant of the well-studied $$\alpha $$ -maxmin model in decision theory. In our framework, and consistent to the paper's empirical focus on renewable-energy R&D investment, experts' subjective probability distributions are allowed to be action-dependent. In addition, the decision maker constrains the sets of priors to be considered via a parsimonious measure of their distance to a benchmark 'average' distribution that grants equal weight to all experts. While our model is formally rooted in the decision-theoretic framework of Olszewski (Rev Econ Stud 74:567-595, ), it may also be viewed as a structured form of sensitivity analysis. We apply our framework to original data from a recent expert elicitation survey on solar energy. The analysis suggests that more aggressive investment in solar energy R&D is likely to yield significant dividends even, or rather especially, after taking expert ambiguity into account. [ABSTRACT FROM AUTHOR]

This paper examines the dynamics of innovation in low-carbon energy technologies distinguishing between research and development and technology diffusion as a response to alternative climate policies. We assess the implications of second-best policies that depart from the assumption of immediate and global participation and of full technology availability. The analysis highlights the heterogeneous effects of climate policy on different energy R&D programs and discusses the contribution of important determinants such as carbon price and policy stringency, policy credibility, policy and technological spillovers and absorptive capacity. [ABSTRACT FROM AUTHOR]

Discussion over post-2012 climate policy is now entering a crucial phase. Despite the potential great risks of prolonged global warming, the success of an international climate stabilization agreement hinges to a great extent on its economic feasibility. This article makes precise the assumptions that underpin current mainstream estimates of the costs of controlling climate change and provides quantitative estimates of cost differentials under different scenarios. In particular, the article analyses the role of three utmost factors in the economic cost of a climate treaty: energy technology development; the participation rate of developing countries; and the timing of global action. We show that all three factors have a major impact on policy macroeconomic costs. Addressing them effectively is therefore indispensable in ensuring the feasibility of any international agreement to control global warming. Therefore, we propose a series of policy recommendations that can help addressing the issues of technology, timing and participation, and that represent key policy implications for a post-2012 climate policy. (JEL codes: C72, H23, Q25, Q28) [ABSTRACT FROM PUBLISHER]

We examine attention to climate change in 46 countries across six continents from 2015 through 2019 by analyzing internet search activity in ten languages. We find that information seeking about climate change, measured by internet searches, notably increased in 2019 relative to prior years. Next, we analyze the impact of global climate marches on internet search activity and find that climate activist events are powerful drivers of attention compared to political events (United Nations Climate Change Conferences) and temperature abnormalities. To explore the role of media coverage, we estimate the effects of climate marches while controlling for weekly news coverage of climate change and find evidence supporting the notion of media attention mediating the effects of climate protests. Lastly, we quantify the duration of the increases in information seeking produced by these events. We find the durations are short-lived, with attention only staying above pre-event levels for several days. As the literature to date has paid scarce attention to public demonstrations as sources of influence on the public's attention to climate change, we suggest these results implore the field to focus more research on the impacts of climate activist events. • Information seeking about climate change notably increased in 2019 relative to prior years. • Climate activist events are powerful drivers of attention to climate change. • News coverage may play a substantial role in the effect of climate activism on information seeking. • Increased information seeking after climate protests is short-lived, only staying above pre-event levels for several days. [ABSTRACT FROM AUTHOR]

• Climate risks affect both the real economy and the financial system. • We employ an agent-based macro-financial model to assess green financial policies. • Green capital requirements spur productivity without hampering financial stability. • Carbon risk adjustment and green public guarantees mitigate emissions but increase instability. • A policy mix comprising all three policies is a sufficient condition for a virtuous cycle. Which policies can increase the resilience of the financial system to climate risks? Recent evidence on the significant impacts of climate change and natural disasters on firms, banks and other financial institutions call for a prompt policy response. In this paper, we employ a macro-financial agent-based model to study the interaction between climate change, credit and economic dynamics and test a mix of policy interventions. We first show that financial constraints exacerbate the impact of climate shocks on the economy while, at the same time, climate damages to firms make the banking sector more prone to crises. We find that credit provision can both increase firms' productivity and their financial fragility, with such a trade-off being exacerbated by the effects of climate change. We then test a set of "green" finance policies addressing these risks, while fostering climate change mitigation: i) green Basel-type capital requirements, ii) green public guarantees to credit, and iii) carbon-risk adjustment in credit ratings. All the policies reduce carbon emissions and the resulting climate impacts, though moderately. However, their effects on financial and real dynamics is not straightforwardly positive. Some combinations of policies fuel credit booms, exacerbating financial instability and increasing public debt. We show that the combination of the three policies leads to a virtuous cycle of (mild) emission reductions, stable financial sector and high economic growth. Additional tools would be needed to fully adapt to climate change. Hence, our results point to the need to complement financial policies cooling down climate-related risks with mitigation policies curbing emissions from real economic activities. [ABSTRACT FROM AUTHOR]

Policymaking during a pandemic can be extremely challenging. As COVID-19 is a new disease and its global impacts are unprecedented, decisions are taken in a highly uncertain, complex, and rapidly changing environment. In such a context, in which human lives and the economy are at stake, we argue that using ideas and constructs from modern decision theory, even informally, will make policymaking a more responsible and transparent process., (Copyright © 2021 the Author(s). Published by PNAS.)

We propose a novel framework for the economic assessment of environmental policy. Our main point of departure from existing work is the adoption of a satisficing , as opposed to optimizing, modeling approach. Along these lines, we place primary emphasis on the extent to which different policies meet a set of goals at a specific future date instead of their performance vis-a-vis some intertemporal objective function. Consistent to the nature of environmental policymaking, our model takes explicit account of model uncertainty. To this end, the decision criterion we propose is an analog of the well-known success-probability criterion adapted to settings characterized by model uncertainty. We apply our criterion to the climate-change context and the probability distributions constructed by Drouet et al. (2015) linking carbon budgets to future consumption. Insights from computational geometry facilitate computations considerably and allow for the efficient application of the model in high-dimensional settings., (© The Author(s) 2021.)

Climate engineering-the deliberate large-scale manipulation of the Earth's climate system-is a set of technologies for reducing climate-change impacts and risks. It is controversial and raises novel governance challenges [T. C. Schelling, Climatic Change , 33, 303-307 (1996); J. Virgoe, Climatic Change , 95, 103-119 (2008)]. We focus on the strategic implications of solar geoengineering. When countries engineer the climate, conflict can arise because different countries might prefer different temperatures. This would result in too much geoengineering: the country with the highest preference for geoengineering cools the planet beyond what is socially optimal at the expense of the others-a theoretical possibility termed "free-driving" [M. L. Weitzman, Scand. J. Econ., 117, 1049-1068 (2015)]. This study is an empirical test of this hypothesis. We carry out an economic laboratory experiment based on a public "good or bad" game. We find compelling evidence of free-driving: global geoengineering exceeds the socially efficient level and leads to welfare losses. We also evaluate the possibility of counteracting the geoengineering efforts of others. Results show that countergeoengineering generates high payoff inequality as well as heavy welfare losses, resulting from both strategic and behavioral factors. Finally, we compare strategic behavior in bilateral and multilateral settings. We find that welfare deteriorates even more under multilateralism when countergeoengineering is a possibility. These results have general implications for governing global good or bad commons., Competing Interests: The authors declare no competing interest.