Seventeenth International Conference on Environmental, Cultural, Economic & Social Sustainability

Abstract

The increased likelihood of reaching several pivotal climate tipping points is directly attributable to anthropogenic activity. Beyond these temperature and carbon-based thresholds, we commit the Earth to drastically altered climate dynamics and immeasurable damages. In this paper, I provide a shadow valuation method for pricing carbon that reflects the likelihood of crossing an ambiguous tipping point. Instead of relegating threshold avoidance to a constraint on an integrated assessment model (IAM), I reduce the oft-criticized economic modules of integrated assessment to the maximization of [reversible] global warming potential–a quantification of the Earth’s remaining absorption budget. This work applies the necessary economic thinking regarding the trade-offs between contemporary benefits of emissions and the likelihood of future disaster, in a purely physical (rather than behavioral) framework. I use a modern climate module consistent with the Earth’s climate dynamics (unlike those in popular IAMs) and showcase a new joint-chance constrained approximate dynamic programming algorithm that can handle a large and continuous state space.