Model uncertainty and energy technology policy: The example of induced technical change ?
Model uncertainty is a major issue in energy and integrated assessment models (IAM). An economic analysis of CO2 abatement with technical change uncertainty is important. A non-Bayesian decision rule is applied in a well-known IAM for robustness analysis. Computational results explore the robust solution and compare it to other solutions. The analysis demonstrates the robust method's power in the CO2 abatement problem.
model uncertainty technical change robust analysis energy and climate policy minmax regret