Mideksa TK, Weitzman ML. Prices versus Quantities across Jurisdictions. Journal of the Association of Environmental and Resource Economists [Internet]. 2019;6 (5) :883-891. Publisher's VersionAbstract
We extend the standard “prices versus quantities” framework for pollution control to cover multiple heterogeneous jurisdictions interacting strategically with each other. When multi-jurisdictional externalities are present and the uncertainties among jurisdictions are independent, the regulatory game exhibits a unique subgame perfect equilibrium. For any one jurisdiction, the equilibrium choice of instrument is given by the sign of the original prices versus quantities formula. Thus, it is an optimal strategy for a jurisdiction to choose a price instrument when the slope of its own marginal benefit is less than the slope of its own marginal cost and a quantity instrument when this condition is reversed. The result suggests that the original nonstrategic criterion for the comparative advantage of prices over quantities may have wider applicability to determining instrument choice in a noncooperative strategic environment.
Pre-publication version
Wagner G, Weitzman ML. Potentially Large Equilibrium Climate Sensitivity Tail Uncertainty. Economics Letters [Internet]. 2018;168 :144-146. Publisher's VersionAbstract
Equilibrium  climate  sensitivity  (ECS),  the  link  between  concentrations  of greenhouse  gases in  the  atmosphere  and  eventual  global  average  tempera- tures, has been persistently and perhaps deeply uncertain.  Its ‘likely’ range has been approximately between 1.5 and 4.5 degrees Centigrade for almost 40 years (Wagner and Weitzman, 2015).  Moreover, Roe and Baker (2007), Weitzman  (2009),  and  others  have  argued  that  its  right-hand  tail  may  be long, ‘fat’ even.  Enter Cox et al. (2018), who use an ‘emergent constraint’ approach to characterize the probability distribution of ECS as having a cen- tral or best estimate of 2.8◦C with a 66% confidence interval of 2.2-3.4 ◦C. This  implies,  by  their  calculations,  that  the  probability of  ECS  exceeding 4.5◦C is less than 1%.  They characterize such kind of result as “renewing hope that we may yet be able to avoid global warming exceeding 2[◦C]”. We share the desire for less uncertainty around ECS (Weitzman, 2011; Wagner and Weitzman, 2015).  However, we are afraid that the upper-tail emergent constraint on ECS islargely a function of the assumed normal error terms in the regression analysis.  We do not attemptto evaluate Cox et al. (2018)’s physical modeling (aside from the normality assumption), leaving that task to physical scientists.  We take Cox et al. (2018)’s 66% confidence interval as given and explore the implications of applying alternative probability distri- butions.  We find, for example, that moving from a normal to a log-normal distribution,  while  giving  identical probabilities  for  being  in  the  2.2-3.4◦C range, increases the probability of exceeding 4.5◦C by over five times.  Using instead a fat-tailed Pareto distribution, an admittedly extreme case, increases the probability by over forty times.
Keywords: climate change, climate sensitivity, fat tails
Weitzman ML. On a World Climate Assembly and the Social Cost of Carbon. Economica [Internet]. 2017;84 (336) :559-586. Publisher's VersionAbstract

This paper argues that a uniform global tax-like price on carbon emissions, whose revenues each country retains, can provide a focal point for a reciprocal common climate commitment, whereas quantity targets, which do not nearly so readily present such a single focal point, tend to rely ultimately on individual quantity commitments. The paper postulates the conceptually useful allegory of a futuristic ‘World Climate Assembly’ (WCA) that votes for a single worldwide price on carbon emissions via the basic democratic principle of one person, one vote majority rule. A WCA-like uniform price-tax counters self-interest by incentivizing countries or agents to internalize the externality because each WCA agent's higher abatement cost from a higher emissions price is counterbalanced by that agent's extra benefit from inducing all other WCA agents to simultaneously lower their emissions in response to the higher price. The paper derives fresh insights and new simple formulae that relate each emitter's most-preferred world price of carbon to the world ‘social cost of carbon’ (SCC), and further relates the WCA-voted world price of carbon to the world SCC. Some implications are discussed. The overall methodology of the paper is a mixture of mostly classical with some behavioural economics.

Pre-publication version weitzman-2017-economica.pdf
Weitzman ML. A Tight Connection Among Wealth, Income, Sustainability, and Accounting in an Ultra-Simplified Setting. In: National Wealth: What is Missing, Why it Matters. New York: Oxford University Press ; 2017. Publisher's Version Pre-publication version
Weitzman ML. How a Minimum Carbon Price Commitment Might Help to Internalize the Global Warming Externality. In: Global Carbon Pricing The Path to Climate Cooperation. Cambridge: MIT Press ; 2017. pp. 125-148. Publisher's Version Pre-publication version
Weitzman ML. Voting on Prices vs. Voting on Quantities in a World Climate Assembly. Research in Economics [Internet]. 2017;71 (2) :199-211. Publisher's VersionAbstract
This paper posits the conceptually useful allegory of a futuristic “World Climate Assembly” that votes on global carbon emissions via the basic principle of majority rule. Two variants are considered. One is to vote on a universal price (or tax) that is internationally harmonized, but the proceeds from which are domestically retained. The other is to vote on the overall quantity of total worldwide emissions, which are then distributed for free (via a pre-decided fractional subdivision formula) as individual allowance permits that are subsequently marketed in an international cap-and-trade system. The model of the paper suggests that the majority-voted price is likely to be less distortionary and easier to enact than the majority-voted total quantity of permits. Some possible implications for climate-change negotiations are noted.
Pre-publication version
Weitzman ML. A Voting Architecture for the Governance of Free-Driver Externalities, with Application to Geoengineering. Scandinavian Journal of Economics [Internet]. 2015;117 (4) :1049-1068. Publisher's Version weitzman-2015-the_scandinavian_journal_of_economics.pdf
Weitzman ML. Internalizing the Climate Externality: Can a Uniform Price Commitment Help?. Economics of Energy & Environmental Policy [Internet]. 2015;4 (2) :37-50. Publisher's Version eeep4-2-weitzman.pdf
Climate Shock
Wagner G, Weitzman M. Climate Shock. Princeton University Press; 2015. Publisher's Version
Weitzman ML. Fat Tails and the Social Cost of Carbon. American Economic Review: Papers & Proceedings [Internet]. 2014;104 (5) :544-546. Publisher's Version aer.104.5.544fattailsandthesocialcostofcarbon.pdf
Weitzman ML. Can Negotiating a Uniform Carbon Price Help to Internalize the Global Warming Externality?. Journal of the Association of Environmental and Resource Economists [Internet]. 2014;1 (1/2) :29-49. Publisher's Version 676039cannegotiatingauniform.pdf
Weitzman ML, Arrow KJ, Cropper ML, Gollier C, Groom B, Heal GM, Newell RG, Nordhaus WD, Pindyck RS, Pizer WA, et al. Should Governments Use a Declining Discount Rate in Project Analysis?. Review of Environmental Economics and Policy [Internet]. 2014;8 (2) :145-163. Publisher's Version rev_environ_econ_policy-2014-arrow-145-63.pdf
Weitzman ML. A Precautionary Tale of Uncertain Tail Fattening. Environmental and Resource Economics [Internet]. 2013;55 :159-173. Publisher's Version a_precautionary_tale_of_uncertain_tail_fattening.pdf
Weitzman ML, Arrow K, Cropper M, Gollier C, Groom B, Heal G, Newell R, Nordhaus W, Pindyck R, Pizer W, et al. Determining Benefits and Costs for Future Generations. Science [Internet]. 2013;341 :349-350. Publisher's Version science-2013-arrow-349-50.pdf
Weitzman ML. The Geoengineered Planet. In: Palacios-Huerta I In 100 Years: Leading Economists Predict the Future. Cambridge, MA: MIT press ; 2013. Publisher's Version the_geoengineered_planet_chapter_10.pdf
Weitzman ML. Tail-Hedge Discounting and the Social Cost of Carbon. Journal of Economic Literature [Internet]. 2013;51 (3) :873-882. Publisher's Version tail_hedge_discounting_and_the_social_cost_of_carbon_september_2013.pdf
Weitzman ML, Wagner G. Playing God. Foreign Policy [Internet]. 2012;October 24. Publisher's Version
Weitzman ML. The Ramsey Discounting Formula for a Hidden-State Stochastic Growth Process. Journal of Environmental and Resource Economics [Internet]. 2012;53 (3) :309-321. Publisher's Version the_ramsey_discounting_formula_for_a_hidden-state_stochastic_growth_process.pdf
Weitzman ML. GHG Targets as Insurance Against Catastrophic Climate Damages. Journal of Public Economic Theory [Internet]. 2012;14 (2) :221-244. Publisher's Version ghgtargetsinsuranceagainst.pdf
Weitzman ML. Fat-Tailed Uncertainty in the Economics of Catastrophic Climate Change. Review of Environmental Economics and Policy [Internet]. 2011;5 (2) :275-292. Publisher's Version fattaileduncertaintyeconomics.pdf