eprintid: 4272
rev_number: 6
eprint_status: archive
userid: 351
dir: disk0/00/00/42/72
datestamp: 2016-01-15 02:05:07
lastmod: 2021-08-27 17:35:55
status_changed: 2016-01-15 02:05:07
type: article
metadata_visibility: show
item_issues_count: 1
creators_name: Birge, J.R.
creators_name: Rosa, C.H.
creators_id: AL0496
creators_id: 1545
title: Modeling investment uncertainty in the costs of global CO2 emission policy
ispublished: pub
internal_subjects: iis_met
internal_subjects: iis_mod
internal_subjects: iis_env
internal_subjects: iis_ecn
divisions: prog_opt
keywords: Economics; Environment; Stochastic programming
abstract: This paper investigates the effect that explicit modeling of stochastic returns to investment has on the CO2 abatement policy returned by a large scale macroeconomic model of the United States economy. We find that a policy derived from the mean value deterministic model in which the random variables of the stochastic model have been replaced by their expected value poorly approximates the optimal policy returned by solving the stochastic programming model. We measure this nonoptimality by determining the value of the stochastic solution and investigating the different evolutionary paths that various macroeconomic variables follow. Macroeconomic variables which stray far from their optimal paths when derived under the assumption of a certain mean valued future are as follows: the level of carbon taxation, investment in new energy production technologies, exploration for nonrenewable resources and investment in improved macroeconomic efficiency.
date: 1995-06-22
date_type: published
publisher: Elsevier
id_number: 10.1016/0377-2217(94)00244-7
iiasapubid: XJ-95-061
creators_browse_id: 1734
creators_browse_id: 1541
full_text_status: none
publication: European Journal of Operations Research
volume: 83
number: 3
pagerange: 466-488
refereed: TRUE
issn: 0377-2217
coversheets_dirty: FALSE
fp7_type: info:eu-repo/semantics/article
citation:   Birge, J.R. <https://pure.iiasa.ac.at/view/iiasa/1734.html> & Rosa, C.H. <https://pure.iiasa.ac.at/view/iiasa/1541.html>  (1995).  Modeling investment uncertainty in the costs of global CO2 emission policy.   European Journal of Operations Research 83 (3) 466-488. 10.1016/0377-2217(94)00244-7 <https://doi.org/10.1016/0377-2217%2894%2900244-7>.