Towards a FAIR-DICE IAM: Combining DICE and FAIR Models ^⁎

Abstract

The estimation of the Social Cost of Carbon Dioxide (SC-CO2) is one of the essential purposes of Integrated Assessment Models (IAMs) used in the economics of climate change. One of the most widely used IAMs in this context is DICE. However, the DICE geophysical subsystem fails to account for feedback from the climate subsystem to the carbon subsystem, an effect recently observed in climate physics. This paper investigates how to combine the recently proposed FAIR climate model with the socioeconomic subsystem of DICE. Based on an analysis of its differential-algebraic structure, we propose an efficient discretization of FAIR that provides a new discrete-time hybrid of DICE and FAIR denoted as FAIR-DICE. Finally, we compare estimates of the SC-CO2 obtained with DICE2013 with those obtained via FAIR-DICE. Show more