I’ve been traveling so much I just realized I haven’t blogged about this yet. I have two IER posts summarizing some of the key points from a forthcoming paper (in the September issue of the Journal of Economic Literature) that is surprisingly scathing in its treatment of the “social cost of carbon” estimates coming out of Integrated Assessment Models (IAMs).

Now the author–Robert Pindyck of MIT–is a supporter of a carbon tax. I made sure to say that upfront in both of my articles. (I can’t speak for other groups; don’t know if they exercised such care.) So you can read this objection from Pindyck to be sure you have the full story.

Anyway, back to my two articles on Pindyck’s paper: they are here and here. Here are some excerpts:

Pindyck’s paper is titled, “Climate Change Policy: What Do the Models Tell Us?” Here is his shocking answer, contained in the abstract: Very little. A plethora of integrated assessment models (IAMs) have been constructed and used to estimate the social cost of carbon (SCC) and evaluate alternative abatement policies. These models have crucial flaws that make them close to useless as tools for policy analysis: certain inputs (e.g. the discount rate) are arbitrary, but have huge effects on the SCC estimates the models produce; the models’ descriptions of the impact of climate change are completely ad hoc, with no theoretical or empirical foundation; and the models can tell us nothing about the most important driver of the SCC, the possibility of a catastrophic climate outcome. IAM-based analyses of climate policy create a perception of knowledge and precision, but that perception is illusory and misleading. [Bold added.]

And: