Columbia Business School Research

The extent of future climate change is largely a policy choice. We illuminate this choice with climate policy curves (CPCs), which link climate policies to subsequent global temperatures. The estimated downward sloping CPCs highlight the key trade-off between initial policy ambition, expressed via an overall effective carbon price, and the subsequent policy burden left for future generations. We also demonstrate how different CPCs can illustrate the range of climate policy paths towards attaining the Paris Agreement temperature goals.

As concern with climate change increases, people seek to behave and consume sustainably. This requires understanding which behaviours, firms and industries have the greatest impact on emissions. Here we ask if people are knowledgeable enough to make choices that align with growing sustainability intentions.

We develop a financial-economic model for carbon pricing with an explicit representation of decision making under risk and uncertainty that is consistent with the Intergovernmental Panel on Climate Change’s sixth assessment report. We show that risk associated with high damages in the long term leads to stringent mitigation of carbon dioxide emissions in the near term, and find that this approach provides economic support for stringent warming targets across a variety of specifications.

The United States recently passed major federal laws supporting the energy transition, and analyses suggest that their successful implementation could reduce US emissions more than 40% below 2005 levels by 2030. However, achieving maximal emissions reductions would require frictionless supply and demand responses to the laws’ incentives and implementation that avoids polarization and efforts to repeal or undercut them. In this Perspective, we discuss some of these supply, demand and polarization challenges.

‘Moral hazard’ links geoengineering to mitigation via the fear that either solar geoengineering (solar radiation management, SRM) or carbon dioxide removal (CDR) might crowd out the desire to cut emissions. Fear of this crowding-out effect ranks among the most frequently cited risks of (solar) geoengineering. We here test moral hazard versus its inverse in a large-scale, revealed-preference experiment (n~340,000) on Facebook and find little to no support for either outcome. For the most part, talking about SRM or CDR does not motivate our study population to support a large U.S.

How much will it cost to meaningfully reduce greenhouse gas (GHG) emissions on a global scale? The answer is critical for assessments of how to address climate change—affecting public support, political will, and policy choices. We find that the “bottom-up” estimation approach emphasized by the United Nations Intergovernmental Panel on Climate Change (IPCC) reports considerably lower costs for emission reductions than leading “top-down” economic models.

Moral hazards are ubiquitous. Green ones typically involve technological fixes: Environmentalists often see ‘technofixes’ as morally fraught because they absolve actors from taking more difficult steps toward systemic solutions. Carbon removal and especially solar geoengineering are only the latest example of such technologies. We here explore green moral hazards throughout American history. We argue that dismissing (solar) geoengineering on moral hazard grounds is often unproductive.

Introduction for Special Issue in Honor of Martin Weitzman.

Community input matters in long-term decisions related to climate change, including the development of public infrastructure. In order to assess the effect of different ways of informing the public about infrastructure projects, a sample of people in the United States (n = 630) was provided with a case study concerning the redevelopment of the San Diego Airport. Participants received the same written information about the projected future condition of the airport.

Climate change is a complex phenomenon that the public learns about both abstractly through media and education, and concretely through personal experiences. While public beliefs about global warming may be controversial in some circles, an emerging body of research on the ‘local warming’ effect suggests that people’s judgments of climate change or global warming are impacted by recent, local temperatures.

The social cost of nitrous oxide does not account for stratospheric ozone depletion. Doing so could increase its value by 20%. Links between nitrous oxide and other nitrogen pollution impacts could make mitigation even more compelling.

As the prospect of average global warming exceeding 1.5°C becomes increasingly likely, interest in supplementing mitigation and adaptation with solar geoengineering (SG) responses will almost certainly rise. For example stratospheric aerosol injection to cool the planet could offset some of the warming for a given accumulation of atmospheric greenhouse gases (1). However, the physical and social science literature on SG remains modest compared with mitigation and adaptation.

Hotter temperature can reduce labor productivity, work hours, and labor income. The effects of heat are likely to be a joint consequence of both exposure and vulnerability. Here we explore the impacts of heat on labor income in the US, using regional wealth as a proxy for vulnerability. We find that one additional day >32 °C (90 °F) lowers annual payroll by 0.04%, equal to 2.1% of average weekly earnings. Accounting for humidity results in slightly more precise estimates.

Climate scientists have long emphasized the importance of climate tipping points like thawing permafrost, ice sheet disintegration, and changes in atmospheric circulation. Yet, save for a few fragmented studies, climate economics has either ignored them or represented them in highly stylized ways. We provide unified estimates of the economic impacts of all eight climate tipping points covered in the economic literature so far using a meta-analytic integrated assessment model (IAM) with a modular structure.

The authors propose that purchasing luxury can be a unique means to engage in sustainable consumption because high-end products are particularly durable. Six studies examine the sustainability of high-end products, investigate consumer decision making when considering high-end versus ordinary goods, and identify effective marketing strategies to emphasize product durability, an important and valued dimension of sustainable consumption.

Advice to the Biden administration as it seeks to account for mounting losses from storms, wildfires and other climate impacts.

One of the first executive orders US President Joe Biden signed in January began a process to revise the social cost of carbon (SCC). This metric is used in cost–benefit analyses to inform climate policy. It puts a monetary value on the harms of climate change, by tallying all future damages incurred globally from the emission of one tonne of carbon dioxide now.

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Climate change has myriad physical and economic impacts. Even those that can be easily quantified indicate the need for ambitious climate action. Other climate impacts have yet to be quantified. We argue here that uncertainties in climate and weather extremes only further increase the social cost of carbon emissions.

China and the United States are the two largest emitters of greenhouse gases, making them pivotal players in global climate negotiations. Within the coming decade, however, India is set to become the most important counterpart to the United States, as it overtakes China as the country with the most at stake depending on the type of global burden-sharing agreements reached, thus becoming a member of the ‘Climate G2’.

Pricing greenhouse-gas (GHG) emissions involves making tradeoffs between consumption today and unknown damages in the (distant) future. While decision making under risk and uncertainty is the forte of financial economics, important insights from pricing financial assets do not typically inform standard climate–economy models. Here, we introduce EZ-Climate, a simple recursive dynamic asset pricing model that allows for a calibration of the carbon dioxide (CO2) price path based on probabilistic assumptions around climate damages.

Sustaining large-scale public goods requires individuals to make environmentally friendly decisions today to benefit future generations. Recent research suggests that second-order normative beliefs are more powerful predictors of behaviour than first-order personal beliefs. We explored the role that second-order normative beliefs — the belief that community members think that saving energy helps the environment — play in curbing energy use.

This article investigates the cost and feasibility of reducing U.S. greenhouse gas emissions by 80 percent from 2005 levels by 2050. The United States has stated in its Paris Conference of the Parties (COP) 21 submission that this is its aspiration. I suggest that this goal can be reached at a net cost in the range of $37 to $135 billion/year. I assume that the goal is to be reached by extensive use of solar photovoltaic and wind energy (66 percent of generating capacity), in which case the cost of energy storage will play a key role in the overall cost.

Until fairly recently, the main approach to getting business to respond to climate change has been top-down efforts to regulate emissions and enact various forms of "carbon pricing." The aim of such efforts has been to make businesses "internalize" the costs associated with greenhouse gas (GHG) emissions. Governments are expected to set the environmental protection rules for companies in their respective countries, and markets are expected to adjust to the new regulations and carbon prices.

More and more firms are engaging in greenwashing, misleading consumers about their environmental performance or the environmental benefits of a product or service. The skyrocketing incidence of greenwashing can have profound negative effects on consumer and investor confidence in green products. Mitigating greenwashing is particularly challenging in a context of limited and uncertain regulation.

This paper articulates and applies frameworks for examining whether consumption is excessive. We consider two criteria for the possible excessiveness (or insufficiency) of current consumption. One is an intertemporal utility-maximization criterion: actual current consumption is deemed excessive if it is higher than the level of current consumption on the consumption path that maximizes the present discounted value of utility. The other is a sustainability criterion, which requires that current consumption be consistent with non-declining living standards over time.