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Optimal Control of Growth and Climate Change--Exploration of Scenarios

Abstract : The paper uses a well-known canonical dynamic model of growth and climate change and explores various scenarios of mitigation policies. Whereas the Kyoto protocol was aiming at CO2 constraints, the Copenhagen agreement pursued temperature constraints. We study the practicality and implication of those and other policy scenarios. For doing so we need to admit terminal constraints for the state variables, consider the impacts of state and control constraints on abatement policies and consumption paths. We also explore a temperature penalty effect on consumption. The different scenarios are studied as guidance for policy options. We compare solutions for finite horizon and infinite horizon. State and control trajectories of infinite-horizon control problems are computed using the routine opttrj in (Kunkel and van dem Hagen, Comput. Econ. 16:189-205, 2000), whereas solutions of finite-horizon control problems with control and state constraints are obtained by discretization and nonlinear programming methods.
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https://hal.inria.fr/hal-00800532
Contributor : Estelle Bouzat <>
Submitted on : Wednesday, March 13, 2013 - 7:39:56 PM
Last modification on : Monday, March 21, 2016 - 11:30:06 AM

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Helmut Maurer, Johann Jakob Preuss, Willi Semmler. Optimal Control of Growth and Climate Change--Exploration of Scenarios. Jesús Crespo Cuaresma, Tapio Palokangas, Alexander Tarasyev. Green Growth and Sustainable Development, 14, Springer, pp.113-139, 2013, Dynamic Modeling and Econometrics in Economics and Finance, 978-3-642-34353-7. ⟨10.1007/978-3-642-34354-4_6⟩. ⟨hal-00800532⟩

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