Technological change has been used both in favor of, and against delaying the onset of greenhouse gas abatement. In this paper we develop a theoretical model using stochastic dynamic programming to show that the uncertainties in technological change and economic growth have a direct impact on the design of cost-effective policies and their effect is to unambiguously dilute arguments in favor of delaying mitigation. Optimal strategies that meet emission reduction targets in the presence of these uncertainties require earlier and greater abatement of carbon emissions. As policy makers at the national and sub-national level set GHG reduction targets, they should aim for more rapid reductions earlier.
Author Biographies
Milind Kandlikar, University of British Columbia
Institute for Asian Research and the Liu Institute for Global Issues
