Characterizing and responding to uncertainty in climate change

The development and analysis of climate policy proposals intertwine with the structure of knowledge and the possibility for changing it. This dissertation advances the description of knowledge about the climate system, the assessment of economic responses to climatic possibilities, and the development of policy that positions society to achieve long-term climate goals.;The first chapter formalizes uncertainty about equilibrium climate change. Its hierarchical Bayes framework allows climate models to be incomplete and to share biases, and it shows how prior beliefs about models' completeness and independence interact with models' estimates of feedback strength to determine distributions for temperature change.;The second chapter attempts to obtain an unbiased estimate of climate-carbon feedback strength by using variations in summer radiation in the Arctic (i.e., variations in orbital forcing) to identify the effect of temperature on CO 2 in 800 ky ice core records. It finds a range for climate-carbon feedbacks that is closer to coupled models' estimates than to previous empirical work.;The next three chapters assess economic responses to climate change in a policy-optimizing integrated assessment model, in games with long-lived investments into abatement capital, and in a cost-effectiveness model with multiple policy options stretching over long time horizons. The first of these chapters extends a well-known integrated assessment model to include the possibility of abrupt shifts in the climate system. It also changes the model's structure to make the decision-maker aware of uncertainty and of the possibility for learning over time, and it generalizes the welfare evaluation to reflect that uncertainty about temperature change is qualitatively unlike uncertainty about climate thresholds.;The second of these climate economics chapters models the optimal emission tax when firms can adopt low-pollution technology that reduces abatement cost. The regulator anticipates this adoption but must set the tax before firms invest. In many cases, a linear emission tax cannot obtain both socially optimal investment and socially optimal emissions because the regulator either will set it inefficiently high to stimulate investment or will set it at an ex post optimal level that obtains inefficiently low investment. A numerical model considers the ability of the regulator to select not only the level but also the duration of the tax. It shows that outcomes are still often socially inefficient.;The fifth chapter constructs cost-effective dynamic policy portfolios of abatement, research and development (R&D), and negative emission technology deployment in order to achieve 21st century climate targets. It includes two types of stochastic technological change in a stylized numerical model and allows each type of technology to respond both to public R&D and to abatement policies. It compares worlds where negative emission technologies are and are not available, and it compares a world where the century's cumulative net emissions are constrained with a world in which threshold possibilities lead policy to constrain cumulative net emissions in each year during the century.;The concluding chapter directly connects uncertainty about climate change to uncertainty about the cost of achieving CO2 targets. It shows how beliefs about technology, temperature, and damages interact to affect the cost-effectiveness of climate targets. It finds that the speed with which damages increase at higher temperatures is the most important of these factors. In addition, because extreme feedback outcomes have little effect over the next decades, a thinner-tailed temperature distribution (resulting from optimistic prior beliefs about climate models' independence and biases) supports CO 2 targets under slightly less severe damages than does the thicker-tailed distribution (resulting from skepticism about climate models' independence and biases). Emission reductions hedge against greater societal sensitivity to temperature increases while exposing society to the upside of positive technology surprises. (Abstract shortened by UMI.).