discussed below as sensitivity checks), and only includes paired comparisons for which both the primary and delayed policies are feasible (i.e. the model was able to solve for both cases).[1] The dataset contains a total of 106 observations (paired comparisons), with 58 included in the primary analysis. All observations in the data set are weighted equally.
Analysis of these data suggests two main conclusions, both consistent with findings from specific papers in the underlying literature. The first is that, looking across studies, costs increase with the length of the delay. Figure 2 shows the delay costs as a function of the delay time. Although there is considerable variability in costs for a given delay length because of variations across models and experiments, there is an overall pattern of costs increasing with delay.
For example, of the 14 paired simulations with 10 years of delay (these are represented by the points in Figure 2 with 10 years of delay), the average delay cost is 39 percent. The regression line shown in Figure 2 estimates an average cost of delay per year using all 58 paired experiments under the assumption of a constant increasing delay cost per year (and, by definition, no cost if there is no delay), and this estimate is 37 percent per decade. This analysis ignores possible confounding factors, such as longer delays being associated with less stringent targets, and the multiple regression analysis presented below controls for such confounding factors.
The second conclusion is that the more ambitious the climate target, the greater are the costs of delay. This can be seen in Figure 3, in which the lowest (most stringent) concentration targets tend to have the highest cost estimates. In fact, close inspection of Figure 2 reveals a related pattern: the relationship between delay length and additional costs is steeper for the points representing CO2e targets of 500 ppm or less than for those in the other two ranges. That is, costs
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- ↑ In the event that a model estimates a cost for a first-best scenario but determines the corresponding delay scenario to be infeasible, the comparison is coded as having costs exceeding 400 percent. In addition, one comparison from Clarke et al. (2009) is excluded because a negative baseline cost precludes the calculation of a percent increase.
