2002 World Congress of Environmental and Resource Economists

This paper applies several well-known decision criteria to the climate change problem. The policy process is represented by a simple game against nature with two possible choices: abate or no action. The outcome is considered a compound lottery, with one representing emissions and another representing damages. Assuming that costs exceed benefits of abatement for the participant, the paper analyzes how different decision criteria affect the decision to abate. The role of expert opinion and quality of information in climate change decisions are also considered. The paper illustrates that the complexity of the climate problem makes it nearly impossible to predict the full consequences of choices, and raises the question of whether the expected utility model represents decision-makers' preferences properly, or whether the use of less information demanding alternatives is indicated. It suggests that if the possibility of making irreversible mistakes is of great concern, then the minimax regret criterion might have increased relevance.



	Paper Title:	Decision Criteria, Scientific Uncertainty, And The Global Warming Controversy
	Presenting Author:	Camilla Bretteville (CICERO, Un. of Oslo)
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	Abstract:	This paper applies several well-known decision criteria to the climate change problem. The policy process is represented by a simple game against nature with two possible choices: abate or no action. The outcome is considered a compound lottery, with one representing emissions and another representing damages. Assuming that costs exceed benefits of abatement for the participant, the paper analyzes how different decision criteria affect the decision to abate. The role of expert opinion and quality of information in climate change decisions are also considered. The paper illustrates that the complexity of the climate problem makes it nearly impossible to predict the full consequences of choices, and raises the question of whether the expected utility model represents decision-makers' preferences properly, or whether the use of less information demanding alternatives is indicated. It suggests that if the possibility of making irreversible mistakes is of great concern, then the minimax regret criterion might have increased relevance.
	Link to paper:	http://weber.ucsd.edu/~carsonvs/papers/444.pdf

	Session / Day / Time	14D / Thursday / 8:00 - 10:00 am

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