Journal Article

No. 2011-18 | October 20, 2011
Transient Temperature Response Modeling in IAMs: The Effects of Over Simplification on the SCC PDF Icon
(Published in Special Issue The Social Cost of Carbon)


Integrated Assessment Models (IAMs) couple representations of the natural climate system with models of the global economy to evaluate climate and energy policies. Such models are currently used to derive the benefits of carbon mitigation policies through estimates of the social cost of carbon (SCC). To remain tractable these models often utilize highly simplified representations of complex natural, social, and economic systems. The authors consider three prominent IAMs, DICE, FUND, and PAGE, and compare their highly simplified temperature response models to two upwelling diffusion energy balance models that better reflect the progressive heat uptake of the deep ocean. They find that all three IAMs fail to fully capture important characteristics in the dynamics of temperature response, especially for high equilibrium climate sensitivities. This has serious implications given these models are often run with distributions for the equilibrium climate sensitivity which have a positive probability for such states of the world. The authors find that, all else equal, the temperature response model in FUND can lead to estimates of the expected SCC that are 10–75% lower than those derived using more realistic climate models, while the models in DICE and PAGE lead to expected SCC estimates that are 10–110% and 40–260% higher, respectively.

Special Issue
The Social Cost of Carbon

JEL Classification

Q54 Q58


Alex L. Marten (2011). Transient Temperature Response Modeling in IAMs: The Effects of Over Simplification on the SCC. Economics: The Open-Access, Open-Assessment E-Journal, 5 (2011-18): 1—42.


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