The impact of climate change on social and economic systems is deeply uncertain. There are knowledge gaps over the precise effect greenhouse gas emissions have on the climate system, i.e., scientific uncertainty. Scenarios about the evolution of carbon emissions and society’s response to climate change are equally riddled with unknowns, i.e., socioeconomic uncertainty. Finally, lack of normative knowledge over how to value the relative interests of people today and the interests of future generations, as embodied in discount rates, complicates the picture further. How then should we make policy decisions in such an uncertain environment?
For this month’s digest, Loïc Berger (Researcher at the CNRS and Professor of Economics at IÉSEG School of Management) highlights research on incorporating uncertainty in analytical models for the purpose of making quantitative assessments of alternative policies.