damage_simulation module

class ezclimate.damage_simulation.DamageSimulation(tree, ghg_levels, peak_temp, disaster_tail, tip_on, temp_map, temp_dist_params, maxh, cons_growth)

Bases: object

Simulation of damages for the EZ-Climate model.

The damage function simulation is a key input into the pricing engine. Damages are represented in arrays of dimension n x p, where n = num states and p = num periods. The arrays are created by Monte Carlo simulation. Each array specifies for each state and time period a damage coefficient.

Up to a point, the Monte Carlo follows Pindyck (2012) ‘Uncertain Outcomes and Climate Change Policy’:

• There is a gamma distribution for temperature
• There is a gamma distribution for economic impact (conditional on temperature)

However, in addition, this program adds a probability of a tipping point (conditional on temperature). This probability is a decreasing function of the parameter peak_temp, conditional on a tipping point. Damage itself is a decreasing function of the parameter disaster_tail.

Parameters:

• tree (TreeModel object) – tree structure used
• ghg_levels (ndarray or list) – end GHG level for each path
• peak_temp (float) – tipping point parameter
• disaster_tail (float) – curvature of tipping point
• tip_on (bool) – flag that turns tipping points on or off
• temp_map (int) –

  mapping from GHG to temperature

  • 0: implies Pindyck displace gamma
  • 1: implies Wagner-Weitzman normal
  • 2: implies Roe-Baker
  • 3: implies user-defined normal
  • 4: implies user-defined gamma

• temp_dist_params (ndarray or list) – if temp_map is either 3 or 4, user needs to define the distribution parameters
• maxh (float) – time paramter from Pindyck which indicates the time it takes for temp to get half way to its max value for a given level of ghg
• cons_growth (float) – yearly growth in consumption

tree

TreeModel object – tree structure used

ghg_levels

ndarray or list – end GHG level for each path

peak_temp

float – tipping point parameter

disaster_tail

float – curvature of tipping point

tip_on

bool – flag that turns tipping points on or off

temp_map

int – mapping from GHG to temperature

temp_dist_params

ndarray or list – if temp_map is either 3 or 4, user needs to define the distribution parameters

maxh

float – time paramter from Pindyck which indicates the time it takes for temp to get half way to its max value for a given level of ghg

cons_growth

float – yearly growth in consumption

d

ndarray – simulated damages

simulate(draws, write_to_file=True)

Create damage function values in ‘p-period’ version of the Summers - Zeckhauser model.

Parameters:

• draws (int) – number of samples drawn in Monte Carlo simulation.
• write_to_file (bool, optional) – wheter to save simulated values

Returns:

3D-array of simulated damages

Return type:

ndarray

Raises:

ValueError – If temp_map is not in the interval 0-4.

Note

Uses the multiprocessing package.