Temperature variability implies greater economic damages from climate change.

Area of Science:

• Climate science
• Environmental economics
• Economic modeling

Background:

• Influential climate change economic cost assessments use limited coupled climate-economy models.
• These models account for epistemic uncertainty (inability to estimate parameters like Equilibrium Climate Sensitivity).
• They neglect aleatory uncertainty (irreducible uncertainty even with known parameters).

Purpose of the Study:

• To develop a method for incorporating aleatory uncertainty into climate-economy models.
• To quantify the economic costs associated with aleatory uncertainty in climate change.

Main Methods:

• Developed a physically-based and tractable approach to include aleatory uncertainty.
• Integrated this approach into existing climate-economy modeling frameworks.

Main Results:

• Demonstrated that even small amounts of aleatory variability lead to significant economic damages.
• Quantified previously unaccounted for economic costs in the trillions of dollars.

Conclusions:

• Current economic assessments of climate change likely underestimate total costs.
• Incorporating aleatory uncertainty is crucial for accurate climate change economic impact analysis.
• This research provides a framework for more comprehensive economic assessments of climate change.