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Center for Energy Studies



Robust Dynamic Energy Use and Climate Change

Ted Temzelides

Robust Dynamic Energy Use and Climate Change.

By Xin Lin, Borghan Narajabad and Ted Temzelides

This working paper studies optimal taxation in a dynamic stochastic economy in which there is uncertainty about the effects of climate change. It concludes that model uncertainty has significant quantitative implications regarding optimal greenhouse gas emissions and the optimal mix of fossil fuel used.