Optimized policy

In optimization mode, webDICE weighs the costs and benefits of reducing emissions and finds the emissions reductions that balance the two. That is, it finds emissions reductions that produce the overall best economic performance given the costs of climate change and the costs of reducing emissions. When performing these calculations, the model uses utility people get from output rather output or GDP. For example, when comparing spending resources today to reducing emisisons — making people alive today worse off — to reduce harms from climate change in the future — making people in the future better off — the model compares the utility of the affected people. See utility. The model also can discount the utility of future people based on a discount rate that you choose.

The choices you make elsewhere, regarding climate sensitivity, harms from climate change, technological growth, abatement costs, and so on will affect how much we should reduce emissions. For example, if you choose a pessimistic scenario, such as high climate sensitivity or very bad harms from climate change, it will be desirable to reduce emissions more. Conversely, if you choose an optimistic scenario, we will not want to reduce emissions as much. Optimization mode allows you to see how your choices affect climate change policy. more

In optimization mode, the model finds a vector of emissions control rates $\mu(t)$ that maximizes the objective function given the assumptions in the model. It then translates these controls into the equivalent carbon tax rate, which is: \[ \tau(t)=BC(t)\mu(t)^{\theta_{2}-1}. \]

In optimization, participation is complete, because this will always reduce costs.