DICER: A tool for analyzing climate policies

Modeling the economy and the planet's climate involves a great number of variables and parameters, some of them very uncertain given the current stage of knowledge regarding technology and the science of climate. The DICER model (or DICE-Regional) is a recently constructed Integrated Assessment Model (IAM), based on the structure of the DICE family of models, which was developed as an instrument for the analysis of uncertainties in climate policy. This paper aims to describe the basic version of DICER on which future developments addressing uncertainty in climate policy analysis will be based. Our results suggest a few interesting conclusions when compared to other IAMs: (i) under a plausible set of assumptions and parameters DICER indicates that an optimal global climate policy would imply higher costs of climate change in the short run but a faster (and more expensive) decarbonization process in all regions, resulting in a faster stabilization of the climate; (ii) lower peak temperatures that occur earlier in time; (iii) considerable sensitivity of results to key parameters such as climate sensitivity, but lower than expected sensitivity to the social discount rate.

► Presents a new integrated assessment model of the global economy and the climate based on the structure of DICE/RICE. ► Introduces a new set of region-specific damage functions associating CO2 emissions and potential economic losses. ► Presents interesting results for climate policy analyses (e.g. 2 °C policy is likely to be inefficient).