RICE50+: DICE model at country and regional level
Article Full Text (PDF)
Model

Supplementary Files

Supplementary Material (PDF)

Keywords

climate change
integrated assessment model
benefit-cost analysis
climate policy

How to Cite

Gazzotti, P. (2022). RICE50+: DICE model at country and regional level. Socio-Environmental Systems Modelling, 4, 18038. https://doi.org/10.18174/sesmo.18038

Abstract

Benefit-cost Integrated Assessment Models (IAMs) have been largely used for optimal policies and mitigation pathways countering climate change. However, the available models are relatively limited in the representation of regional heterogeneity. This is despite strong evidence of significant variation of local mitigation costs and benefits, institutional capacity, environmental and economic priorities. Here, I introduce RICE50+, a benefit-cost optimizing IAM with more than 50 independently deciding regions or countries. Its core foundation is the DICE model, improved with several original contributions. These include new calibrations on actual mitigation cost data, full integration of recent empirically based impact functions, alternative socioeconomic reference projections as well as normative preferences, including welfare specifications explicitly featuring inequality aversion. Due to its high level of regional detail, the model can support researchers in better investigating the role of heterogeneity in international cooperation, cross-country inequalities, and climate change impacts under a variety of mitigation pathways and scenarios.

Article Full Text (PDF)
Model

References

Anthoff, D. (2009). Optimal Global Dynamic Carbon Taxation (No. WP278). http://ideas.repec.org/p/esr/wpaper/wp278.html

Atkinson, A. B., & Brandolini, A. (2010). On Analyzing the World Distribution of Income. World Bank Econ Rev, 24(1), 1–37. https://doi.org/10.1093/wber/lhp020

Berger, L., & Emmerling, J. (2017). Welfare as Simple(x) Equity Equivalents (No. 2017.014). Fondazione Eni Enrico Mattei. http://www.feem.it/getpage.aspx?id=9013

Bosetti, V., Carraro, C., Galeotti, M., Massetti, E., & Tavoni, M. (2006). WITCH A World Induced Technical Change Hybrid Model. The Energy Journal, 27, 13–37. http://www.jstor.org/stable/23297044

Bosetti, V., Carraro, C., Massetti, E., & Tavoni, M. (2008). International energy R&D spillovers and the economics of greenhouse gas atmospheric stabilization. Energy Economics, 30(6), 2912–2929. https://doi.org/10.1016/j.eneco.2008.04.008

Bosetti, V., & Tavoni, M. (2009). Uncertain R&D, backstop technology and GHGs stabilization. Energy Economics, 31(SUPPL. 1), S18–S26. https://doi.org/10.1016/J.ENECO.2008.03.002

Burke, M., Hsiang, S. M., & Miguel, E. (2015). Global non-linear effect of temperature on economic production. Nature, 527(7577), 235–239. https://doi.org/10.1038/nature15725

Burke, M., Davis, W. M., & Diffenbaugh, N. S. (2018). Large potential reduction in economic damages under UN mitigation targets. Nature, 557(7706), 549–553. https://doi.org/10.1038/s41586-018-0071-9

Dell, M., Jones, B. F., & Olken, B. A. (2012). Temperature Shocks and Economic Growth: Evidence from the Last Half Century. American Economic Journal: Macroeconomics, 4(3), 66–95. https://doi.org/10.1257/mac.4.3.66

Després, J., Keramidas, K., Schmitz, A., & Kitous, A. (2018). POLES-JRC model documentation 2018 update. Publications Office of the European Union. https://doi.org/10.2760/814959

Diffenbaugh, N. S., & Burke, M. (2019). Global warming has increased global economic inequality. Proceedings of the National Academy of Sciences of the United States of America, 116(20), 9808–9813. https://doi.org/10.1073/pnas.1816020116

Drupp, M. A., Freeman, M. C., Groom, B., & Nesje, F. (2018). Discounting Disentangled. American Economic Journal: Economic Policy, 10(4), 109–134. https://doi.org/10.1257/pol.20160240

Emmerling, J., Drouet, L., Reis, L. A., Bevione, M., Berger, L., Bosetti, V., Carrara, S., Cian, E. D., D’Aertrycke, G. D. M., Longden, T., Malpede, M., Marangoni, G., Sferra, F., Tavoni, M., Witajewski-Baltvilks, J., & Havlik, P. (2016). The WITCH 2016 Model - Documentation and Implementation of the Shared Socioeconomic Pathways (Working Paper No. 2016.42). Fondazione Eni Enrico Mattei. https://ideas.repec.org/p/fem/femwpa/2016.42.html

Eyckmans, J., & Tulkens, H. (2003). Simulating coalitionally stable burden sharing agreements for the climate change problem. Resource and Energy Economics, 25(4), 299–327. https://doi.org/10.1016/S0928-7655(03)00041-1

GAMS Development Corporation (2013). General Algebraic Modeling System (GAMS) Release 24.8.0, Fairfax, VA, USA. https://www.gams.com/download/

Gillingham, K., & Stock, J. H. (2018). The cost of reducing greenhouse gas emissions. Journal of Economic Perspectives, 32(4), 53–72. https://doi.org/10.1257/jep.32.4.53

Giorgi, F. (2008). A simple equation for regional climate change and associated uncertainty. Journal of Climate, 21(7), 1589–1604. https://doi.org/10.1175/2007JCLI1763.1

Glanemann, N., Willner, S. N., & Levermann, A. (2020). Paris Climate Agreement passes the cost-benefit test. Nature Communications, 11(1), 1–11. https://doi.org/10.1038/s41467-019-13961-1

Gütschow, J., Jeffery, M. L., Gieseke, R., Gebel, R., Stevens, D., Krapp, M., & Rocha, M. (2016). The PRIMAP-hist national historical emissions time series. Earth System Science Data, 8(2), 571–603. https://doi.org/10.5194/essd-8-571-2016

Hänsel, M. C., Drupp, M. A., Johansson, D. J. A., Nesje, F., Azar, C., Freeman, M. C., Groom, B., & Sterner, T. (2020). Climate economics support for the UN climate targets. Nature Climate Change, 1–9. https://doi.org/10.1038/s41558-020-0833-x

Hope, C. (2008). Discount rates, equity weights and the social cost of carbon. Energy Economics, 30(3), 1011–1019. https://doi.org/10.1016/j.eneco.2006.11.006

IPCC. (2018). Special Report on Global Warming of 1.5ºC. IPCC. http://www.ipcc.ch/report/sr15/

IPCC. (2021). Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press. https://www.ipcc.ch/report/ar6/wg1/

Kahn, M. E., Mohaddes, K., Ng, R. N. C., Pesaran, M. H., Raissi, M., & Yang, J.-C. (2019). Long-Term Macroeconomic Effects of Climate Change: A Cross-Country Analysis (Working {Paper} No. 26167). National Bureau of Economic Research. https://doi.org/10.3386/w26167

Keohane, R. O., & Victor, D. G. (2016). Cooperation and Discord in Global Climate Policy. Nature Climate Change, 6(6), 570–575. https://doi.org/10.1038/nclimate2937

Lessmann, K., Kornek, U., Bosetti, V., Dellink, R., Emmerling, J., Eyckmans, J., Nagashima, M., Weikard, H.-P., & Yang, Z. (2015). The Stability and Effectiveness of Climate Coalitions: A Comparative Analysis of Multiple Integrated Assessment Models. Environmental and Resource Economics, 62(4), 811–836. https://doi.org/10.1007/s10640-015-9886-0

Li, H., & Rus, H. A. (2019). Climate change adaptation and international mitigation agreements with heterogeneous countries. Journal of the Association of Environmental & Resource Economists, 6(3), 503–530. https://doi.org/10.1086/702644

Meinshausen, M., Raper, S. C. B., & Wigley, T. M. L. (2011). Emulating coupled atmosphere-ocean and carbon cycle models with a simpler model, MAGICC6 – Part 1: Model description and calibration. Atmospheric Chemistry & Physics, 11(4), 1417–1456. https://doi.org/10.5194/acp-11-1417-2011

Mitchell, T. D. (2003). Pattern scaling: An examination of the accuracy of the technique for describing future climates. Climatic Change, 60(3), 217–242. https://doi.org/10.1023/A:1026035305597

Moore, F. C., & Diaz, D. B. (2015). Temperature impacts on economic growth warrant stringent mitigation policy. Nature Climate Change, 5(2), 127–131. https://doi.org/10.1038/nclimate2481

Nagashima, M., Dellink, R., Ierland, E. van, & Weikard, H.-P. (2009). Stability of international climate coalitions — A comparison of transfer schemes. Ecological Economics, 68(5), 1476–1487. https://doi.org/10.1016/j.ecolecon.2008.10.006

Newell, R. G., Prest, B. C., & Sexton, S. E. (2021). The GDP-Temperature relationship: Implications for climate change damages. Journal of Environmental Economics and Management, 108, 102445. https://doi.org/10.1016/j.jeem.2021.102445

Nordhaus, W. D. (1994). Expert Opinion on Climatic Change. American Scientist, 82(1), 45–51. http://www.jstor.org/stable/29775100

Nordhaus, W. D. (2008). A Question of Balance: Weighing the Options on Global Warming Policies. Yale University Press.

Nordhaus, W. D. (2010). Economic aspects of global warming in a post-Copenhagen environment. Proceedings of the National Academy of Sciences of the United States of America, 116(20), 9808–9813. https://doi.org/10.1073/pnas.1005985107

Nordhaus, W. D. (2015). Climate clubs: Overcoming free-riding in international climate policy. American Economic Review, 105(4), 1339–1370. https://doi.org/10.1257/aer.15000001

Nordhaus, W. D. (2018). Projections and uncertainties about climate change in an era of minimal climate policies. American Economic Journal: Economic Policy, 10(3), 333–360. https://doi.org/10.1257/pol.20170046

Nordhaus, W. D., & Yang, Z. (1996). A Regional Dynamic General-Equilibrium Model of Alternative Climate-Change Strategies. The American Economic Review, 86(4), 741–765. https://doi.org/10.2307/2118303

O’Neill, B. C., Kriegler, E., Riahi, K., Ebi, K. L., Hallegatte, S., Carter, T. R., Mathur, R., & Vuuren, D. P. van. (2014). A new scenario framework for climate change research: The concept of shared socioeconomic pathways. Climatic Change, 122(3), 387–400. https://doi.org/10.1007/s10584-013-0905-2

Peters, G. (2016). The “best available science” to inform 1.5 °C policy choices. Nature Climate Change, 6(7), 646–649. https://doi.org/10.1038/nclimate3000

Pindyck, R. S. (2013). The Climate Policy Dilemma. Review of Environmental Economics and Policy, 7(2), 219–237. https://doi.org/10.1093/reep/ret007

Popp, D. (2004). ENTICE: Endogenous technological change in the DICE model of global warming. Journal of Environmental Economics and Management, 48(1), 742–768. https://doi.org/10.1016/j.jeem.2003.09.002

Riahi, K., Vuuren, D. P. van, Kriegler, E., Edmonds, J., O’Neill, B. C., Fujimori, S., Bauer, N., Calvin, K., Dellink, R., Fricko, O., Lutz, W., Popp, A., Cuaresma, J. C., KC, S., Leimbach, M., Jiang, L., Kram, T., Rao, S., Emmerling, J., Ebi, K., Hasegawa, T., Havlik, P., Humpenöder, F., Aleluia, L., Smith, S., Stehfest, E., Bosetti, V., Eom, J., Gernaat, D., Masui, T., Rogelj, J., Strefler, J., Drouet, L., Krey, V., Luderer, G., Harmsen, M., Takahashi, K., Baumstark, L, Doelman, J.C., Kainuma, M., Klimont, Z., Marangoni, G., Lotze-Campen, H., Obersteiner, M., Tabeau, A., Tavoni, M. (2017). The Shared Socioeconomic Pathways and their energy, land use, and greenhouse gas emissions implications: An overview. Global Environmental Change, 42, 153–168. https://doi.org/10.1016/j.gloenvcha.2016.05.009

Ricke, K., Drouet, L., Caldeira, K., & Tavoni, M. (2018). Country-level social cost of carbon. Nature Climate Change, 8(10), 895–900. https://doi.org/10.1038/s41558-018-0282-y

Rogers, E. M. (2010). Diffusion of innovations. Simon and Schuster.

Schlenker, W., & Auffhammer, M. (2018). The cost of a warming climate. Nature, 557(7706), 498–499. https://doi.org/10.1038/d41586-018-05198-7

Stanton, E. A. (2010). Negishi welfare weights in integrated assessment models: The mathematics of global inequality. Climatic Change, 107(3-4), 417–432. https://doi.org/10.1007/s10584-010-9967-6

Taylor, K. E., Stouffer, R. J., & Meehl, G. A. (2011). An Overview of CMIP5 and the Experiment Design. Bulletin of the American Meteorological Society, 93(4), 485–498. https://doi.org/10.1175/BAMS-D-11-00094.1

Tol, R. S. J. (2010). International inequity aversion and the social cost of carbon. Climate Change Economics (CCE), 1(01), 21–32.

Tol, R. S. J. (2019). A social cost of carbon for (almost) every country. Energy Economics, 83, 555–566. https://doi.org/10.1016/j.eneco.2019.07.006

U. S. Census Bureau (2000). The changing shape of the nation’s income distribution.

van den Berg, N. J., van Soest, H. L., Hof, A. F., den Elzen, M. G. J., van Vuuren, D. P., Chen, W., Drouet, L., Emmerling, J., Fujimori, S., Höhne, N., Kõberle, A. C., McCollum, D., Schaeffer, R., Shekhar, S., Vishwanathan, S. S., Vrontisi, Z., & Blok, K. (2020). Implications of various effort-sharing approaches for national carbon budgets and emission pathways. Climatic Change, 162(4), 1805–1822. https://doi.org/10.1007/s10584-019-02368-y

Van Der Zwaan, B. C. C., Gerlagh, R., Klaassen, G., & Schrattenholzer, L. (2002). Endogenous technological change in climate change modelling. Energy Economics, 24(1), 1–19. https://doi.org/10.1016/S0140-9883(01)00073-1

Wei, Y.-M., Han, R., Wang, C., Yu, B., Liang, Q.-M., Yuan, X.-C., Chang, J., Zhao, Q., Liao, H., Tang, B., Yan, J., Cheng, L., & Yang, Z. (2020). Self-preservation strategy for approaching global warming targets in the post-Paris Agreement era. Nature Communications, 11(1), 1624. https://doi.org/10.1038/s41467-020-15453-z

Weitzman, M. L. (2009). On modeling and interpreting the economics of catastrophic climate change. Review of Economics and Statistics, 91(1), 1–19. https://doi.org/10.1162/rest.91.1.1

Weyant, J. (2014). Integrated assessment of climate change: state of the literature. Journal of Benefit-Cost Analysis, 5(03), 377–409. https://doi.org/10.1515/jbca-2014-9002

Weyant, J. (2017). Some Contributions of Integrated Assessment Models of Global Climate Change. Review of Environmental Economics and Policy, 11(1), 115–137. https://doi.org/10.1093/reep/rew018

Weyant, J., Davidson, O., Dowlabathi, H., Edmonds, J., Grubb, M., Parson, E. A., Richels, R., Rotmans, J., Shukla, P. R., Tol, R. S. J., Cline, W., & Frankhauser, S. (1996). Integrated assessment of climate change: an overview and comparison of approaches and results. In Climate Change 1995 - Social and Economic Dimensions of Climate Change, Working Group III Second Assessment Report of the IPCC (pp. 367–396). Cambridge University Press.

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Copyright (c) 2022 Paolo Gazzotti