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1 DICER : a Tool for Analyzing Uncertainties in Climate Policy Analysis

Modeling the economy and the planet ́s climate involves a great number of variables and parameters, some of them very uncertain given the current stage of knowledge regarding technology and the science of climate. The DICER model (or DICE-Regional) is a recently developed IAM, based on the structure of the DICE family of models, which was developed to be an instrument for the analysis of uncertainties in climate policy. This paper aims to describe the deterministic version of DICER in which future developments addressing uncertainty in climate policy analysis will be based. Our results suggest a few interesting conclusions when compared to other IAMs: (i) under a plausible set of assumptions and parameters we used in DICER an optimal global climate policy would imply higher costs of climate change in the short run but a faster (and more expensive) decarbonization process in all regions, resulting in a faster stabilization of the climate; (ii) lower peak temperatures observed earlier in time; (iii) sensitivity of results to key parameters such as climate sensitivity, but lower than expected sensitivity of results to the social discount rate.