Dynamic Integrated Climate-Economy model (DICE)
Definition
The Dynamic Integrated Climate-Economy model (DICE), developed by Nordhaus (1992), is an integrated assessment model, modelling economic growth, the resulting CO2 emissions, the climatic response (e.g., temperature impact of these CO2 emissions), and finally the damage of increased global temperature on economic consumption. Its output is a calculation of the resulting current economic welfare, which is the sum of the discounted values of the consumption-based utilities between now and the long-term horizon. By maximizing welfare over the control variables (the savings rate and the abatement function), the DICE model determines the optimal CO2 abatement pathway that maximizes current welfare.
About EDHEC
Operating from campuses in Lille, Nice, Paris, London and Singapore, EDHEC is one of the world’s top 15 business schools. Fully international and directly connected to the business world, EDHEC commands a strong reputation for research excellence and the ability to train entrepreneurs and managers capable of breaking new ground. EDHEC functions as a genuine laboratory of ideas and produces innovative solutions valued by businesses. The School’s teaching is inspired by its research work and a focus on “learning by doing”, all with the aim of equipping people with the skills to succeed in business.
