Mitigating Global Warming

In terms of a climate change decision, if the benefits from curbing emissions are higher, the higher the temper- ature reached by the planet, then the irreversibility of the decision to control emissions would raise the temperature threshold at which the decision to curb emissions is imple- mented. [...] Optimality means that these two values are endogenously specified in order to maximize the expected sum of discounted GDPs between the current time and the date of the catastrophe.13 3.1 Adaptation and Mitigation Adaptation is modelled as the magnitude of the adjustment in GDP implied by the constant ρ in Eq. [...] The delay ∆T (k, L) takes into account the fact that the higher the starting disposable GDP available for expenditures in mitigation and the higher the fraction of disposable GDP actually spent, k, the quicker the effect on the temperature process. [...] In addition, the wider the temperature gap L−CP at the time the mitigation decision is implemented, the longer the delay because the day-to-day costs of climate change, despite adaptation efforts, use up a portion of the disposable income otherwise available for mitigation. [...] He 13 selects a threshold temperature L that triggers the beginning of the mitigation investment period;16 he also determines the magnitude of the investment by choosing the proportion k of disposable GDP devoted to mitigation from the beginning of the mitigation period.