On the implications of thresholds for economic science and environmental policy

This dissertation analyses the implications for economic analyses of the occurrence of thresholds in environmental damage functions. This research question is analysed for the case of global warming from three different perspectives. The first perspective is that of certainty of information. Using an optimal control model the question is analysed under what conditions a society might cross a catastrophic threshold. The second perspective is that of uncertainty of information. Using a one-period model of cho e the question is in what way changes in uncertainty affect the decision of a utility maximising society. The third perspective is that of equity. Given that global warming may increase human mortality, the question arises in what way society can balance the demand for increased consumption against the increase in human mortality.