Environmental policy under model uncertainty a robust optimal control approach
Model uncertainty is inherent in the design of optimal environmental policy. We investigate the consequences in a simple linear model, where the aim of the policymaker is to stabilize the carbon content of the atmosphere. We study how decision-makers' concerns about robustness alter policy usin...
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| Format: | UnknownFormat |
| Sprache: | eng |
| Veröffentlicht: |
Munich
Univ., Center for Economic Studies u.a.
2007
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| Schriftenreihe: | CESifo working paper series Resources and environment
1938 |
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Tag hinzufügen | Zusammenfassung: | Model uncertainty is inherent in the design of optimal environmental policy. We investigate the consequences in a simple linear model, where the aim of the policymaker is to stabilize the carbon content of the atmosphere. We study how decision-makers' concerns about robustness alter policy using the Hansen and Sargent (2000, 2003, 2007) approach. The analysis shows that a policymaker, who fears model misspecification should react more aggressively to changes in the stock of atmospheric carbon and implement policies which deliver a greater reduction of emissions. |
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| Beschreibung: | Literaturverz. S. 14 - 15 |
| Beschreibung: | 15 S. graph. Darst., Tab. |