Advertisement

Environmental and Resource Economics

, Volume 65, Issue 3, pp 599–622 | Cite as

Heterogeneous Beliefs and Climate Catastrophes

  • Tatiana Kiseleva
Article

Abstract

We study how heterogeneous beliefs about the causes and extent of global warming affect local mitigation and adaptation strategies and therefore global climate dynamics. Local policies are determined by expectations of policy makers about future climate. There are three types of expectations: strong skeptic, weak skeptic and ‘science-based’. Strong skeptics deny human-induced climate change and a possibility of a climate catastrophe. Weak skeptics believe that industrial emissions cause global warming, but deny catastrophic climate change. Science-based policy makers, considering the warning of the scientific community, account for both: human influence on climate and possible catastrophic shifts. Aggregate behavior of policy makers determines the total emission level which influences global climate dynamics. The paper argues that even if there are only skeptical policy makers the climate catastrophe can still be avoided.

Keywords

Adaptation Catastrophes Climate change Heterogeneous beliefs Skepticism 

JEL Classification

C61 Q54 

Notes

Acknowledgments

The author is grateful to Aart de Zeeuw, Anastasios Xepapadeas, Florian Wagener, Antony Millner, the participants of the workshop ‘The Economics of Complex Systems’ at Beijer Institute (Stockholm) and the 13th Viennese Workshop on Optimal Control and Dynamic Games for comments on an earlier draft of this article, and to the two anonymous referees for their valuable comments and suggestions.

References

  1. Anderegg WRL, Prall JW, Harold J, Schneider SH (2010) Expert credibility in climate change. Proc Nat Acad Sci 107(27):12107–12109CrossRefGoogle Scholar
  2. Bréchet T, Hritonenko N, Yatsenko Y (2013) Adaptation and mitigation in long-term climate policy. Environ Resour Econ 55(2):217–243CrossRefGoogle Scholar
  3. Bréchet T, Camacho C, Veliov VM (2014) Model predictive control, the economy, and the issue of global warming. Ann Oper Res 220(1):25–48CrossRefGoogle Scholar
  4. Brekke KA, Johansson-Stenman O (2008) The behavioural economics of climate change. Oxf Rev Econ Policy 24(2):280–297CrossRefGoogle Scholar
  5. Cook J, Nuccitelli D, Green SA, Richardson M, Winkler B, Painting R, Way R, Jacobs P, Skuce A (2013) Quantifying the consensus on anthropogenic global warming in the scientific literature. Environ Res Lett 8(2):024024CrossRefGoogle Scholar
  6. Dhooge A, Govaerts W, Kuznetsov YA (2003) Matcont: a matlab package for numerical bifurcation analysis of odes. ACM Trans Math Softw (TOMS) 29(2):141–164CrossRefGoogle Scholar
  7. Di Bernardo M, Budd CJ, Champneys AR, Kowalczyk P, Nordmark AB, Tost GO, Piiroinen PT (2008) Bifurcations in nonsmooth dynamical systems. SIAM Rev 50(4):629–701CrossRefGoogle Scholar
  8. Diks C, van der Weide R (2005) Herding, a-synchronous updating and heterogeneity in memory in a CBS. J Econ Dyn Control 29(4):741–763CrossRefGoogle Scholar
  9. Doran PT, Zimmerman MK (2009) Examining the scientific consensus on climate change. EOS Trans Am Geophys Union 90(3):22–23CrossRefGoogle Scholar
  10. Ebert U, Welsch H (2012) Adaptation and mitigation in global pollution problems: economic impacts of productivity, sensitivity, and adaptive capacity. Environ Resour Econ 52(1):49–64CrossRefGoogle Scholar
  11. Gardiner SM (2009) Saved by disaster? abrupt climate change, political inertia, and the possibility of an intergenerational arms race. J Soc Philos 40(2):140–162CrossRefGoogle Scholar
  12. Gowdy JM (2008) Behavioral economics and climate change policy. J Econ Behav Organ 68(3):632–644CrossRefGoogle Scholar
  13. Grass D, Kiseleva T, Wagener F (2015) Small-noise asymptotics of Hamilton–Jacobi–Bellman equations and bifurcations of stochastic optimal control problems. Commun Nonlinear Sci Numer Simul 22(1):38–54CrossRefGoogle Scholar
  14. Gsottbauer E, van den Bergh JCJM (2011) Environmental policy theory given bounded rationality and other-regarding preferences. Environ Resour Econ 49(2):263–304CrossRefGoogle Scholar
  15. Hommes C (2013) Behavioral rationality and heterogeneous expectations in complex economic systems. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  16. Hommes C, Kiseleva T, Kuznetsov Y, Verbic M (2012) Is more memory in evolutionary selection(de) stabilizing? Macroecon Dyn 16(03):335–357CrossRefGoogle Scholar
  17. Ingham A, Ma J, Ulph AM (2005) Can adaptation and mitigation be complements. Tyndall Centre for Climate Change Research, Report 79Google Scholar
  18. Kagan M (2014) Climate change skepticism in the face of catastrophe. Tinbergen Institute Discussion Paper 12-112/VIII. http://ssrn.com/abstract=2166878
  19. Kiseleva T, Wagener FOO (2010) Bifurcations of optimal vector fields in the shallow lake model. J Econ Dyn Control 34(5):825–843CrossRefGoogle Scholar
  20. Kossioris G, Plexousakis M, Xepapadeas A, de Zeeuw A, Mäler K-G (2008) Feedback nash equilibria for non-linear differential games in pollution control. J Econ Dyn Control 32(4):1312–1331CrossRefGoogle Scholar
  21. Kuznetsov YA (1995) Elements of applied bifurcation theory, vol 112. Springer, New YorkGoogle Scholar
  22. Leine RI, Nijmeijer H (2004) Dynamics and bifurcations of non-smooth mechanical systems, vol 18. Springer, New YorkGoogle Scholar
  23. Mäler K-G, Xepapadeas A, de Zeeuw A (2003) The economics of shallow lakes. Environ Resour Econ 26:603–624CrossRefGoogle Scholar
  24. Millner A, Ollivier H, Simon L (2014) Policy experimentation, political competition, and heterogeneous beliefs. J Public Econ. doi: 10.1016/j.jpubeco.2014.08.008 Google Scholar
  25. Milne MJ, Grubnic S, Boston J, Lempp F (2011) Climate change: explaining and solving the mismatch between scientific urgency and political inertia. Account Audit Account J 24(8):1000–1021CrossRefGoogle Scholar
  26. Moghayer SM (2012) Bifurcations of indifference points in discrete time optimal control problems. Thela ThesisGoogle Scholar
  27. Nerlich B (2010) ’Climategate’: paradoxical metaphors and political paralysis. Environ Values 19(4):419–442CrossRefGoogle Scholar
  28. Poortinga W, Spence A, Whitmarsh L, Capstick S, Pidgeon NF (2011) Uncertain climate: an investigation into public scepticism about anthropogenic climate change. Glob Environ Change 21(3):1015–1024CrossRefGoogle Scholar
  29. Schreurs MA, Tiberghien Y (2007) Multi-level reinforcement: explaining european union leadership in climate change mitigation. Glob Environ Politics 7(4):19–46CrossRefGoogle Scholar
  30. Shogren JF (2002) A behavioral mindset on environment policy. J Socio-econ 31(4):355–369CrossRefGoogle Scholar
  31. Shogren JF, Taylor LO (2008) On behavioral-environmental economics. Rev Environ Econ Policy 2(1):26–44CrossRefGoogle Scholar
  32. van den Bergh JCJM, Ferrer-i-Carbonell A, Munda G (2000) Alternative models of individual behaviour and implications for environmental policy. Ecol Econ 32(1):43–61CrossRefGoogle Scholar
  33. Van Wijnbergen S, Willems T (2015) Optimal learning on climate change: why climate skeptics should reduce emissions. J Environ Econ Manag 70:17–33CrossRefGoogle Scholar
  34. Venkatachalam L (2008) Behavioral economics for environmental policy. Ecol Econ 67(4):640–645CrossRefGoogle Scholar
  35. Wagener FOO (2003) Skiba points and heteroclinic bifurcations, with applications to the shallow lake system. J Econ Dyn Control 27(9):1533–1561CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  1. 1.Department of Spatial EconomicsFree University AmsterdamAmsterdamThe Netherlands

Personalised recommendations