Author: ["Thomas S. Lontzek","Yongyang Cai","Kenneth L. Judd","Timothy M. Lenton"]
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Abstract
Analysis of the uncertainty associated with the timing of climate tipping points suggests that carbon taxes need to be increased by a minimum of 50%. If considering a rapid, high-impact tipping event, these taxes should be more than 200% higher. This implies that the discount rate to delay stochastic tipping points is much lower than that for deterministic climate damages. Perhaps the most ‘dangerous’ aspect of future climate change is the possibility that human activities will push parts of the climate system past tipping points, leading to irreversible impacts1. The likelihood of such large-scale singular events2 is expected to increase with global warming1,2,3, but is fundamentally uncertain4. A key question is how should the uncertainty surrounding tipping events1,5 affect climate policy? We address this using a stochastic integrated assessment model6, based on the widely used deterministic DICE model7. The temperature-dependent likelihood of tipping is calibrated using expert opinions3, which we find to be internally consistent. The irreversible impacts of tipping events are assumed to accumulate steadily over time (rather than instantaneously8,9,10,11), consistent with scientific understanding1,5. Even with conservative assumptions about the rate and impacts of a stochastic tipping event, today’s optimal carbon tax is increased by ∼50%. For a plausibly rapid, high-impact tipping event, today’s optimal carbon tax is increased by >200%. The additional carbon tax to delay climate tipping grows at only about half the rate of the baseline carbon tax. This implies that the effective discount rate for the costs of stochastic climate tipping is much lower than the discount rate7,12,13 for deterministic climate damages. Our results support recent suggestions that the costs of carbon emission used to inform policy12,13 are being underestimated14,15,16, and that uncertain future climate damages should be discounted at a low rate17,18,19,20.Cite this article
Lontzek, T., Cai, Y., Judd, K. et al. Stochastic integrated assessment of climate tipping points indicates the need for strict climate policy. Nature Clim Change 5, 441–444 (2015). https://doi.org/10.1038/nclimate2570 