Climate policy/Description: Difference between revisions

Revision as of 16:02, 18 May 2018

Parts of Climate policy/Description

Flowchart Climate policy. See also the Input/Output Table on the introduction page.

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 ===Estimation of consumption losses===
-Consumption losses due to mitigation, adaptation and climate change damage are estimated based on a simple [[Cobb-Douglas economic growth model|Cobb-Douglas economic growth model]]. Each region is calibrated separately to the exogenous GDP path. Damages, adaptation and abatement costs are subtracted from investment or consumption to determine either the direct replacement effect on consumption, or the indirect effect from replacing investments.
+Consumption losses due to mitigation, adaptation and climate change damage are estimated based on a simple Cobb–Douglas production function.<ref><div style="clear:both float:right">The Cobb–Douglas production function is a particular functional form of the production function widely used to represent the technological relationship between the amounts of two or more inputs, particularly physical capital and labor, and the amount of output that can be produced by those inputs.</div></ref>Each region is calibrated separately to the exogenous GDP path. Damages, adaptation and abatement costs are subtracted from investment or consumption to determine either the direct replacement effect on consumption, or the indirect effect from replacing investments.
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