Comment

Abstract

The authors develop a climate-economy framework whose main purpose is to illustrate the importance of taking “the unknown” seriously in this area. More precisely, the paper considers risk, model ambiguity, and model misspecification. The focus is on the decision problem of a plannerwhose preferences embody uncertainty aversion. That is, amarket outcome is not considered. The key contribution of the paper is to propose a framework—that is, methods useful for addressing this kind of issue—and then to apply it to three examples. None of the examples can be viewed as full-fledged, quantitative settings, so it is difficult to draw concrete policy conclusions from them. At the same time, they illustrate possible magnitudes that could arise. Overall it is an impressive paper. My commentswill be organized into three sections: Iwill discuss the broad motivation for focusing on uncertainty, I will comment on the specific modeling approach, and I will make concluding remarks.