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Article: Study results from University of Massachusetts update understanding of public economic theory.
- Article from:
- Economics Week
- Article date:
- November 13, 2009
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According to recent research published in the Journal of Public Economic Theory, "Global climate change presents a classic problem of decision making under uncertainty with learning. We provide stochastic dominance theorems that provide new insights into when abatement and investment into low carbon technology should increase in risk."
"We show that R&D into low-carbon technologies and near-tern abatement are in some sense opposites in terms of risk. Abatement provides insurance against the possibility of major catastrophes; R&D provides insurance against the possibility that climate change is marginally worse than average," wrote E. Baker and colleagues, ...