GREENHOUSE-GAS ABATEMENT UNDER AMBIGUITY

Observing that energy related climate change is an ambiguous prospect, rather than a risky one, this paper examines the consequences of diff erent degrees of and attitudes towards ambiguity. Ambiguous choices di ffer from risky choices in that decision makers hold no firm probabili ty distribution as to the consequences of their actions, but recognize that preliminary probability estimates may be revised in the light of new information. This (ex ante) recognition may lead to ambiguous cho ices and risky choices being evaluated differently. The paper offers a n explanation of why the evaluation of abatement programmes can differ among people who are likely to suffer similar climate impacts and mig ht be thought to hold similar probability assessments.