Climate economics support for the UN climate targets

The economic optimality of limiting global warming to below 2 degrees C has been questioned. This analysis shows that the 2 degrees C target is economically optimal in a version of the DICE model that includes updated climate science, climate damage estimates and evidence on social discount rates. Under the UN Paris Agreement, countries committed to limiting global warming to well below 2 degrees C and to actively pursue a 1.5 degrees C limit. Yet, according to the 2018 Economics Nobel laureate William Nordhaus, these targets are economically suboptimal or unattainable and the world community should aim for 3.5 degrees C in 2100 instead. Here, we show that the UN climate targets may be optimal even in the Dynamic Integrated Climate-Economy (DICE) integrated assessment model, when appropriately updated. Changes to DICE include more accurate calibration of the carbon cycle and energy balance model, and updated climate damage estimates. To determine economically 'optimal' climate policy paths, we use the range of expert views on the ethics of intergenerational welfare. When updates from climate science and economics are considered jointly, we find that around three-quarters (or one-third) of expert views on intergenerational welfare translate into economically optimal climate policy paths that are consistent with the 2 degrees C (or 1.5 degrees C) target.