### Abstract

Language | English |
---|---|

Pages | 6886-6896 |

Journal | Energies |

Volume | 7 |

Issue number | 11 |

DOIs | |

Publication status | Published - 2014 |

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### Bibliographical note

PT: J; NR: 17; TC: 0; J9: ENERGIES; PG: 11; GA: AU4EW; UT: WOS:000345563200004### Cite this

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*Energies*, vol. 7, no. 11, pp. 6886-6896. https://doi.org/10.3390/en7116886

**Ambiguity Reduction by Objective Model Selection, with an Application to the Costs of the EU 2030 Climate Targets.** / Tol, R.S.J.

Research output: Contribution to Journal › Article › Academic › peer-review

TY - JOUR

T1 - Ambiguity Reduction by Objective Model Selection, with an Application to the Costs of the EU 2030 Climate Targets

AU - Tol, R.S.J.

N1 - PT: J; NR: 17; TC: 0; J9: ENERGIES; PG: 11; GA: AU4EW; UT: WOS:000345563200004

PY - 2014

Y1 - 2014

N2 - I estimate the cost of meeting the EU 2030 targets for greenhouse gas emission reduction, using statistical emulators of ten alternative models. Assuming a first-best policy implementation, I find that total and marginal costs are modest. The statistical emulators allow me to compute the risk premiums, which are small, because the EU is rich and the policy impact is small. The ensemble of ten models allows me to compute the ambiguity premium, which is small for the same reason. I construct a counterfactual estimate of recent emissions without the climate policy and use that to test the predictive skill of the ten models. The models that show the lowest cost of emission reduction also have the lowest skill for Europe in recent times.

AB - I estimate the cost of meeting the EU 2030 targets for greenhouse gas emission reduction, using statistical emulators of ten alternative models. Assuming a first-best policy implementation, I find that total and marginal costs are modest. The statistical emulators allow me to compute the risk premiums, which are small, because the EU is rich and the policy impact is small. The ensemble of ten models allows me to compute the ambiguity premium, which is small for the same reason. I construct a counterfactual estimate of recent emissions without the climate policy and use that to test the predictive skill of the ten models. The models that show the lowest cost of emission reduction also have the lowest skill for Europe in recent times.

U2 - 10.3390/en7116886

DO - 10.3390/en7116886

M3 - Article

VL - 7

SP - 6886

EP - 6896

JO - Energies

T2 - Energies

JF - Energies

SN - 1996-1073

IS - 11

ER -