Near Term Carbon Emissions and the Risks of Future Climate Threshold Responses
Klaus Keller’s work has focused on the effects of uncertain climate thresholds and learning on economically efficient climate policies. Many optimal economic growth models suggest that uncertain climate damages justify only low levels of near-term CO2 abatement. However, these models have neglected the effects of potential climate thresholds, such as a widespread coral bleaching, a disintegration of the West Antarctic Ice Sheet, or a shutdown / persistent weakening of the North Atlantic meridional overturning circulation.
Work by Keller and coworkers showed that even small future damages associated with climate thresholds would justify considerable near-term reductions of greenhouse gas emissions in a cost-benefit sense. Delaying these investments to reduced greenhouse gas emissions can carry economic costs in the trillions of dollars. The efficient timing of the implied reductions in greenhouse gas emissions varies considerably across the potential climate thresholds.
For example, reducing the risk of a widespread coral bleaching implies drastic reductions in greenhouse gas emissions within decades. In contrast, reducing the risk of a West Antarctic ice sheet disintegration allows for a smoother decarbonization of the economy on a century time scale and may well increase consumption in the long run (due to the concomitant reduction in other climate change impacts such as sea-level rise).