Next Article in Journal
A Heuristic Rule-Based Passive Design Decision Model for Reducing Heating Energy Consumption of Korean Apartment Buildings
Next Article in Special Issue
U.S. Energy Transitions 1780–2010
Previous Article in Journal
Simplified Analysis of the Electric Power Losses for On-Shore Wind Farms Considering Weibull Distribution Parameters
Previous Article in Special Issue
Does a Change in Price of Fuel Affect GDP Growth? An Examination of the U.S. Data from 1950–2013
Article Menu

Export Article

Open AccessArticle
Energies 2014, 7(11), 6886-6896; doi:10.3390/en7116886

Ambiguity Reduction by Objective Model Selection, with an Application to the Costs of the EU 2030 Climate Targets

1
Department of Economics, University of Sussex, Jubilee Building, Falmer BN1 9SL, UK
2
Institute for Environmental Studies, Vrije Universiteit Amsterdam, Amsterdam, The Netherlands
3
Department of Spatial Economics, Vrije Universiteit Amsterdam, Amsterdam, The Netherlands
4
Tinbergen Institute, Amsterdam, The Netherlands
5
CESifo, Munich, Germany 
Received: 21 July 2014 / Revised: 15 October 2014 / Accepted: 17 October 2014 / Published: 28 October 2014
(This article belongs to the Special Issue Energy Transitions and Economic Change)
View Full-Text   |   Download PDF [493 KB, uploaded 17 March 2015]   |  

Abstract

I estimate the cost of meeting the EU 2030 targets for greenhouse gas emission reduction, using statistical emulators of ten alternative models. Assuming a first-best policy implementation, I find that total and marginal costs are modest. The statistical emulators allow me to compute the risk premiums, which are small, because the EU is rich and the policy impact is small. The ensemble of ten models allows me to compute the ambiguity premium, which is small for the same reason. I construct a counterfactual estimate of recent emissions without the climate policy and use that to test the predictive skill of the ten models. The models that show the lowest cost of emission reduction also have the lowest skill for Europe in recent times. View Full-Text
Keywords: climate policy; European Union; carbon price; forecast skill; uncertainty climate policy; European Union; carbon price; forecast skill; uncertainty
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

Scifeed alert for new publications

Never miss any articles matching your research from any publisher
  • Get alerts for new papers matching your research
  • Find out the new papers from selected authors
  • Updated daily for 49'000+ journals and 6000+ publishers
  • Define your Scifeed now

SciFeed Share & Cite This Article

MDPI and ACS Style

Tol, R.S.J. Ambiguity Reduction by Objective Model Selection, with an Application to the Costs of the EU 2030 Climate Targets. Energies 2014, 7, 6886-6896.

Show more citation formats Show less citations formats

Related Articles

Article Metrics

Article Access Statistics

1

Comments

[Return to top]
Energies EISSN 1996-1073 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top