GLOBAL WARMING UNCERTAINTIES AND THE VALUE OF INFORMATION - AN ANALYSIS USING CETA

In this paper, we investigate the sensitivity of optimal carbon contro l strategies to parameters of the Carbon Emissions Trajectory Assessme nt (CETA) Model, and we use CETA in a simple decision tree framework t o estimate the value of information about global warming uncertainties . We find that if an optimal control policy is used under uncertainty, the eventual resolution of uncertainty has high value relative to cur rent research budgets, and resolving uncertainty about the costs of wa rming is nearly as important as resolving uncertainty about the extent of warming. In addition, we find that there is not a high premium on immediate resolution of uncertainty, if resolution would otherwise occ ur within, say, twenty years; this implies that time is available to p lan and execute a carefully designed research program. On the other ha nd, we find that if the real world political process would result in a suboptimal control policy being chosen under uncertainty, and this ch oice could be prevented by early resolution of uncertainty; the benefi t of early resolution may be as much as three orders of magnitude grea ter.