Climate change in times of economic uncertainty: A perverse tragedy of the commons?

Ramon E. Lopez, Roberto Pastén*, Pablo Gutiérrez Cubillos

*Autor correspondiente de este trabajo

Producción científica: Contribución a una revistaArtículorevisión exhaustiva

4 Citas (Scopus)

Resumen

We explore the effect of raising economic uncertainty on local and global carbon emissions. Most economic models under uncertainty focus on the effect of risk on the supply of a control variable (e.g., emissions). Here we explore the effect of risk on both the supply and demand of local and global carbon emissions and, therefore, on their equilibrium shadow price. We show that in addition to the consumers’ level of risk aversion and prudence coefficient, an additional parameter not included in standard models, the elasticity of substitution between pollution and conventional inputs, plays a key role as a determinant of local and global emissions. An important implication of the analysis is that, under various specifications widely used for preferences and production technologies, a damning vicious cycle between increasing economic uncertainty and global pollution emissions is likely to occur.

Idioma originalInglés
Páginas (desde-hasta)209-225
Número de páginas17
PublicaciónEconomic Analysis and Policy
Volumen75
DOI
EstadoPublicada - 2022
Publicado de forma externa

Nota bibliográfica

Publisher Copyright:
© 2022 Economic Society of Australia, Queensland

Áreas temáticas de ASJC Scopus

  • Economía y econometría

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