Integrated Assessment Models: Overview

This lecture introduces Integrated Assessment Models (IAMs), which simulate future pathways for economic activity and climate change under different policy scenarios. IAMs combine macroeconomic models, representing economies, with climate models, focusing on the carbon cycle and climate dynamics. The main IAMs discussed are DICE/RICE, FUND, and PAGE. The lecture covers the early contributions of William D. Nordhaus, the 'Father of the 2°C limit', and the typical structure of an IAM. It also explains the damage function used in IAMs and discusses the costs associated with mitigation and adaptation. The conclusion highlights the limitations of IAMs in predicting climate change impacts and optimal mitigation strategies.