Some thoughts on the value added from a new round of climate change damage estimates

This paper offers some thoughts on the value added of new economic estimates of climate change damages. We begin with a warning to beware of analyses that are so narrow that they miss a good deal of the important economic ramifications of the full suite of manifestations of climate change. Our second set of comments focuses attention on one of the most visible products of integrated assessment modeling—estimates of the social cost of carbon which we take as one example of aggregate economic indicators that have been designed to summarize climate risk in policy deliberations. Our point is that these estimates are so sensitive to a wide range of parameters that improved understanding of economic damages across many (if not all) climate sensitive sectors may offer only limited value added. Having cast some doubt on the ability of improved estimates of economic damages to increase the value of economic damage estimates in integrated assessment modeling designed to inform climate policy deliberations, we offer an alternative approach—describing implicitly a research agenda that could (a) effectively inform mitigation decisions while, at the same time, (b) providing economic estimates for aggregate indicators like the social cost of carbon.