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A Brief Look at Climate Change

Decent Essays
The global climate system is complex and its response to future anthropogenic greenhouse gases and to climate change adaptation, is often poorly understood. Climate change is an area where modeling in the framework of complex adaptive systems can improve our knowledge both with respect to the internal structure and adaptive mechanisms of climate and our capacity for designing efficient climate adaptation policies. Modeling of these systems includes a dynamic system consisting of transition equations describing the evolution of state variables characterizing the natural system, such as CO2 concentrations in the upper and lower atmosphere and in the oceans, and state variables characterizing the economic systems, such as physical capital and knowledge. The complex adaptive character of the system implies that the dynamic system will be nonlinear and nonconvex, will allow for nonlinear feedbacks and multiple basins of attraction, will evolve both in the temporal and spatial dimension, and will be influenced by forward looking optimizing economic agents (Xepapadeas, 2010). Moreover, any rational policy choice must consider the uncertainty about the magnitude and timing of climate change's impact on economic productivity (Cai et al., 2013).
The majority of the literature, including the recent U.S. Government Interagency Working Group on the Social Cost of Carbon (IWG, 2013) does not model the stochastic nature of the climate and economic systems. Recent work, such as that of Cai
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