Near term mitigation policy for global change under uncertainty: Minimizing the expected cost of meeting unknown concentration thresholds

An aggregate integrated assessment model is used to investigate the relative merits of hedging over the near term against the chance that atmospheric concentrations of carbon dioxide will be limited as a matter of global policy. Hedging strategies are evaluated given near term uncertainty about the targeted level of limited concentrations and the trajectory of future carbon emissions. All uncertainty is resolved in the year 2020, and strategies that minimize the expected discounted value of the long term cost of abatement, including the extra cost of adjusting downstream to meet unexpected concentration limits along unanticipated emission trajectories, are identified. Even with uncertainties that span current wisdom on emission futures and restriction thresholds that run from 550 ppm through 850 ppm, the results offer support for at most modest abatement response over the next several decades to the threat of global change.