Skip to Main content Skip to Navigation
Journal articles

Risk aversion, intergenerational equity and climate change.

Abstract : The paper investigates a climate-economy model with an iso-elastic welfare function in which one parameter gamma measures relative risk-aversion and a distinct parameter rho measures resistance to intertemporal substitution. We show both theoretically and numerically that climate policy responds differently to variations in the two parameters. In particular, we show that higher gamma but lower rho leads to increase emissions control. We also argue that climate-economy models based on intertemporal expected utility maximization, i.e. models where gamma = rho, may misinterpret the sensitivity of the climate policy to risk-aversion.
Document type :
Journal articles
Complete list of metadata

Cited literature [13 references]  Display  Hide  Download
Contributor : Minh Ha-Duong Connect in order to contact the contributor
Submitted on : Monday, July 18, 2005 - 11:57:26 PM
Last modification on : Friday, October 8, 2021 - 4:26:01 PM
Long-term archiving on: : Friday, September 17, 2010 - 5:46:27 PM



Minh Ha-Duong, Nicolas Treich. Risk aversion, intergenerational equity and climate change.. Environmental and Resource Economics, Springer, 2004, 28 (2), pp.195-207. ⟨10.1023/B:EARE.0000029915.04325.25⟩. ⟨halshs-00000680v2⟩



Record views


Files downloads