Publication Keyword: Hazard rate

Climatic tipping points and optimal fossil fuel use

The economics of climate change is characterized by many uncertainties regarding, for instance, climate dynamics, economic damages and potentially irreversible climate catastrophes. Using an optimal growth model of a fossil-fuel-driven economy subject to cli- mate externalities and potentially irreversible climatic regime shifts, this paper contributes to the understanding of how the risk of such events impacts on optimal fossil-fuel use, carbon taxes and fossil-fuel prices…

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