C-SEF Webinar: Adam Bauer, University of Illinois at Urbana Champaign

Carbon Dioxide as a Risky Asset
Adam Bauer, NSF graduate research fellow in the Department of Physics at the University of Illinois at Urbana Champaign

We develop a financial-economic model for carbon pricing with an explicit representation of decision making under risk and uncertainty that is consistent with the Intergovernmental Panel on Climate Change’s sixth assessment report. We find that this approach provides economic support for the warming targets in the Paris Agreement across a variety of specifications. We show that risk associated with high damages in the long term leads to stringent mitigation of carbon dioxide emissions in the near term. Our results provide insight into how a systematic incorporation of climate-related risk influences 'optimal' emissions abatement pathways.

This is part of a regular C-SEF Webinar series, to build community and brainstorm research ideas. All are welcome.

This is a rescheduled event. The original date was April 20 at 12pm. Now taking place on April 27 at 11am.