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Model flow chart and overview

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Adam Michael Bauer edited this page Jun 29, 2022 · 4 revisions

Here we provide a brief model overview as well as a flowchart for the model indicating how the model classes interact.

Model overview

TCREZClimate is a dynamical carbon pricing model. The underlying structure is a path dependent binomial tree, which allows information about uncertainty related to the climate and climate impacts to be baked into the model structure. The basic idea is to initiate the tree structure, choose an emissions baseline, calculate the potential damages for an array of mitigation choices, and optimize the utility for particular choices of mitigation. (See the Example Implementations page for further details.)

Each run of TCREZClimate returns an optimal mitigation tree (with shape (num_decision_nodes,)) which in turn leads to an optimal carbon price tree and optimal CO2 concentrations tree (both with the same shape as the optimal mitigation vector). Also returned is the optimal economic utility value in 2020 and the recombined damage coefficients. These are used by the analysis scripts to compute other interesting model quantities, such as the average temperature anomaly in the simulation and the average economic damages. (Note these are averages, as the precise value of TCRE is not assumed to be known at any particular node.)

Any other quantities of interest can be computed from these output quantities.

Model flow chart

TCREZClimate model flow chart.

If you use this work, please cite our two papers: the paper which uses this model, Bauer et al., 20XX, and the one that started it all, Daniel et al., 2017.

AMB and CP acknowledge the support of the Gies College of Business Office of Risk Management and Insurance at the University of Illinois at Urbana Champaign. AMB acknowledges support from the Tamer School of Social Enterprise and an NSF Graduate Research Fellowship; this material is based upon work supported by the National Science Foundation Graduate Research Fellowship Program under Grant No. DGE 21-46756. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the National Science Foundation. GW is supported by Daddy Warbucks at Columbia Business School.

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