Climate change must deal with two market failures, global warming and learning by doing in renewable use. The social optimum requires an aggressive renewables subsidy in the near term and a gradually rising carbon tax which falls in long run. As a result, more renewables are used relative to...

Italy was the first country in the world to exploit geothermal resources for electricity production. In Europe it is still the first country in terms of installed capacity. Currently, the only region in Italy with geothermal power plants is Tuscany. This study focuses on Mt. Amiata, one of the...

Climate policy recommendations differ widely because of disagreements over what discount rates to use. Disagreement reduces the impact of economic models and signals a need for improved methodology. The problem is related to the choice of intergenerational welfare functions. A first...

In this reply to the comment by Gerlagh, we confirm an error in our estimate of the certainty-equivalent social cost of carbon (SCC) reported in Newbold et al. (2013), and we discuss the underlying conceptual difficulties that arise in conducting a social welfare analysis when preferences are...

The Social Costs of Carbon (SCC) equals the marginal welfare loss associated with one unit of emitted CO2, divided by the marginal welfare gain associated with one unit of consumption. In stochastic assessments, both the nominator and denominator can depend on uncertain parameters; specifically...

A global computable general equilibrium (CGE) model integrating detailed energy end-use technologies is developed in this paper. The paper (1) presents how energy end-use technologies are treated within the model and (2) analyzes the characteristics of the model’s behavior. Energy service...

Until now, the complex relationship between energy security and climate change has been addressed using a partial understanding of security, one that is based on simplified indicators such as import dependence or fuel mix diversity. As a consequence, the synergies and trade-offs between climate...

An important assumption in economic studies of climate policy is the social welfare function. This paper shows that applying distinct decision or social welfare criteria can result in different optimal policies of climate control, notably if climate change impacts are uncertain. First, decision...