Modeling Economic Risks of Carbon Emissions
The Art
The Graph
Various Factors Influence Climate Change Impacts to Economy
“There are a number of possible outcomes for how climate change influences the economy. This figure shows how our decisions about climate abatement policy depend on both the current state of the world and the potential future states of the world. After all, we do not just make decisions based on our current knowledge; we make decisions based on our current knowledge and how we expect things will play out in the future. This reality influences optimal CO2 abatement policy in the Carbon Asset Pricing model – AR6 (CAP6), and leads to a recommended policy of rapid emissions reductions.”
Summary of figure provided by Adam Bauer, one of the co-authors of the paper∗
Artwork based on Panel A of Figure 1
∗Department of Physics, University of Illinois at Urbana Champaign, Loomis Laboratory, Urbana, IL 61801 (corre- sponding author: adammb4@illinois.edu)
†Department of Atmospheric Sciences & Department of Geology, University of Illinois at Urbana Champaign, Urbana, IL 61801 (cristi@illinois.edu)
‡Columbia Business School, New York, NY 10027 (gwagner@columbia.edu)
