Supporting Information

William Nordhaus, Economic aspects of global warming in a post-Copenhagen

environment
Downloadable version. Note that the model is available in an Excel version at the authors
webpage at http://www.econ.yale.edu/~nordhaus/homepage/RICEmodels.htm.
Major Equations of the RICE 2010 Model. The following lists the major equations in the
RICE-2010 model. We omit unimportant equations such as initial conditions. Note that
subscript k represents regions.
(A.1) Welfare:
12 T max

W =

k =1 t =1

kt

U[c k (t ),Lk (t )]R(t ))

(A.2) Discount factor:

R(t) = (1+ )-t

(A.3) Utility function:

U [c k (t),Lk (t)] = Lk (t)[c k (t)1 - / (1 - )]

(A.4) Output before damages and abatement:
k 1
k
k
k

Y (t) = A (t) K (t) L (t)

(A.5) Abatement cost as fraction of output:

k (t) = Y k (t) 1 (t) k (t)

(A.6) Climate damages as fraction of output

k(t) = g k [T(t ),SLR(t ), M AT (t )] / ( 1 + g k [T(t ),SLR(t ), M AT (t )] )

(A.7) Output after damages and abatement

Q k (t) = k (t)[1 - k (t)]Y k (t)

(A.8) Composition of output

Q k(t) = C k(t) + I k(t)

(A.9) Per capita consumption

c k(t) = C k(t) / L k(t)

(A.10) Law of motion of capital stock

K k(t) = I k(t) K K k(t 1 )

(A.11) Industrial emissions

EInd k(t) = k(t)[1 - k(t)]Y k(t)

(A.12) Carbon fuel limitations

CCum

T max

t =1

12 k

E Ind(t)
k =1

(A.13) Total carbon emissions

E k(t) = E k Ind(t) + E k Land(t)

(A.14) Dynamics of atmospheric carbon concentrations

M AT (t ) = E(t ) + 11 M AT (t - 1 ) + 21 MUP (t - 1 )
(A.15) Dynamics of carbon concentrations in biosphere and upper oceans

MUP (t ) = 12 M AT (t - 1 ) + 22 MUP (t - 1 ) + 32 M LO (t - 1 )
(A.16) Dynamics of carbon concentrations lower oceans

M LO (t ) = 23 MUP (t - 1 ) + 33 M LO (t - 1 )
(A.17) Radiative forcings

F(t ) = { log 2 [ M AT (t ) / M AT (1750 )]} + FEX (t )

(A.18) Global mean surface temperature

TAT (t) = TAT (t 1 ) + 1 { F(t ) - 2TAT (t 1 ) - 3 [TAT (t 1 ) - TLO (t 1 )]}

(A.19) Temperature lower oceans

TLO (t ) = TLO (t 1 ) + 4 {TAT (t 1 ) - TLO (t 1 )]}

(A.20) Sea level rise (thermal expansion, glaciers, ice sheets)

j
SLR(t) = SLR(t - 1) + 1 , j + 2 , jTAT (t 1 ) + 2 , j [TAT (t 1 ) TAT
]
j =1

Variable definitions and units. Endogenous variables are marked with asterisks. These
omit the regional subscripts or superscripts for brevity.
A(t) = total factor productivity (productivity units)
* c(t) = per capita consumption of goods and services (2005 U.S. dollars per person)
* C(t) = consumption of goods and services (trillions of 2005 U.S. dollars)
* D(t) = damages from climate change (trillions of 2005 U.S. dollars)
ELand (t) = emissions of carbon from land use (billions of metric tons C per period)
* EInd (t) = industrial carbon emissions (billion metric tons C per period)
* E(t) = total carbon emissions (billion metric tons C per period)
* F( t ), FEX ( t ) = total and exogenous radiative forcing (watts per square meter from
1900)

*g k [T(t),SLR(t),MAT (t)] = damage function

* I(t) = investment (trillions of 2005 U.S. dollars)
* K(t) = capital stock (trillions of 2005 U.S. dollars)
L(t) = population and proportional to labor inputs (millions)
* (t) = abatement cost as fraction of output
* M AT (t ), MUP (t ), M LO (t ) = mass of carbon in reservoir for atmosphere, upper
oceans, and lower oceans (billions of metric tons C, beginning of period)
* (t ) = emissions-control rate (fraction of uncontrolled emissions)

(t ) = ratio of uncontrolled industrial emissions to output (metric tons C per output

in 2005 prices)
* (t ) = damage function (climate damages as fraction of regional output)

* ( t ) = abatement cost function (abatement costs as fraction of regional output)

* Q(t) = output of goods and services, net of abatement and damages (trillions of 2005
U.S. international dollars)
SLR(t) = sea level rise (relative to 1990), meters
t = time (decades from 2001-2010, 2011-2020, )
* TAT (t ),TLO (t ) = global mean surface temperature, temperature upper oceans,
temperature lower oceans (C from 1900)
* U [c(t), L(t)] = instantaneous utility function (utility per period)
* W = objective function in present value of utility (utility units)
* Y(t) = output of goods and services, gross of abatement and damages (trillions of
2005 U.S. dollars)
Parameters

= elasticity of marginal utility of consumption (pure number)

CCum = maximum consumption of fossil fuels (billions metric tons carbon)
= elasticity of output with respect to capita (pure number)
K = rate of depreciation of capital (per period)
= temperature-forcing parameter (C per watts per meter squared)
11 ,21 ,22 ,32 ,12 ,33 ,23 = parameters of the carbon cycle (flows per period)
1 , 2 , 3 , 4 = parameters of climate equations (flows per period)
1 , 2 = parameters of damage function
= pure rate of social time preference (per year)
R(t) = social time preference discount factor (per time period)
Tmax = length of estimate period for model (60 periods = 600 years for most
variables)
j
TAT
(t ) = threshold temperatures for ice sheets in SLR equation (C)

1 (t), 2 = parameters of the abatement cost function

kt = Negishi parameters of the social welfare function

Time steps. The current model runs on 10-year time-steps. Variables are generally defined
as flow per year, but some variables are in flow per decade. The transition parameters are
generally defined as per decade. Users should check the Excel program to determine the
exact definition of the time-steps. The basic model runs for 60 10-year periods. The SLR
module projects atmospheric concentrations, temperature, and SLR to 3000.

Further Tables on RICE-2010 model Results. The following tables provide more detailed
information on the results of the model runs.

2005-2055
Growth of net national income

2055-2105

2105-2205

[Percent per year, logarithmic]

US
EU
Japan
Russia
Eurasia
China
India
Middle East
Africa
Latin America
Other high income
Other developing Asia

2.04
1.84
1.02
1.73
2.65
3.90
4.29
3.59
4.99
3.16
1.99
4.10

1.08
0.88
0.71
0.85
1.44
1.25
1.87
1.69
2.33
1.47
0.79
2.10

0.29
0.28
0.30
0.36
0.40
0.30
0.37
0.27
0.30
0.33
0.27
0.37

World

2.79

1.45

0.32

Table ST1. Growth of Net National Income by region, baseline run

Net national income equals consumption plus the growth in the net capital stock.

Capping region:

US
EU
Japan
Russia
Eurasia
China
India
Middle East
Africa
Latin America
OHI
Other non-OECD Asia

Date of
participation

Base year

2015
2005
2005
2005
2020
2030
2040
2050
2070
2030
2015
2040

2005
1990
1990
1990
1990
2030
2040
2050
2070
2030
2015
2040

Fraction of
Commitment base year in
year
commitment
year

2015
1995
1995
2005
2020
2030
2040
2050
2070
2030
2015
2040

Table ST2. Participation rates in Copenhagen Accord

0.84
0.80
0.94
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00

Further
reductions
tied to

House bill
US
US
US
US
US
US
US
US
US
US
US

2000

2100

2200

2300

369.5
369.5
369.5
369.5
369.5
369.5

748.0
591.7
453.7
532.9
530.8
676.4

1,250.0
493.2
417.4
506.4
483.2
808.9

1,227.6
455.6
398.4
474.2
463.6
726.6

Radiative forcings (W/m2)

Base
Optimal
Limit T < 2 C
Copenhagen: Full Trade
Copenhagen: No trade
Copenhagen: Rich only

1.60
1.60
1.60
1.60
1.60
1.60

5.99
4.42
2.83
3.77
3.74
5.38

8.50
3.41
2.49
3.55
3.29
6.12

8.41
2.97
2.23
3.19
3.06
5.48

Temperature (C from 1900)

Base
Optimal
Limit T < 2 C
Copenhagen: Full Trade
Copenhagen: No trade
Copenhagen: Rich only

0.83
0.83
0.83
0.83
0.83
0.83

3.51
2.77
2.00
2.49
2.48
3.20

5.72
2.71
1.92
2.64
2.51
4.52

6.56
2.41
1.82
2.58
2.43
4.37

CO2 concentrations (ppm)

Base
Optimal
Limit T < 2 C
Copenhagen: Full Trade
Copenhagen: No trade
Copenhagen: Rich only

Table ST3. Results for climate variables for different runs

Carbon prices

2015

2025

2035

2045

2055

2105

Optimal
Limit T < 2 C
Copen: Full trade
Copen: Rich only

37.96
79.04
0.39
0.39

65.50
142.25
5.79
12.40

(2005 prices per ton C)

89.50
117.76
155.55
226.00
348.97
521.78
64.12
201.26
358.37
41.76
64.14
64.11

Optimal
Limit T < 2 C
Copen: Full trade
Copen: Rich only

42.68
88.87
0.44
0.44

73.65
159.95
6.51
13.94

(2010 prices per ton C)

100.64
132.42
174.91
254.12
392.40
586.70
72.10
226.31
402.96
46.96
72.12
72.09

459.30
1,016.13
666.90
31.13

17.87
38.80
1.58
3.38

(2005 prices per ton CO2)

24.41
32.12
42.43
61.65
95.19
142.33
17.49
54.90
97.76
11.39
17.50
17.49

111.42
246.50
161.78
7.55

20.09
43.63
1.78
3.80

(2010 prices per ton CO2)

27.45
36.12
47.71
69.32
107.04
160.04
19.67
61.73
109.92
12.81
19.67
19.66

125.29
277.18
181.91
8.49

Optimal
Limit T < 2 C
Copen: Full trade
Copen: Rich only
Optimal
Limit T < 2 C
Copen: Full trade
Copen: Rich only

10.35
21.56
0.11
0.11
11.64
24.24
0.12
0.12

Table ST4. Globally averaged carbon prices, alternative policy scenarios

[Prices are weighted by industrial CO2 emissions.]

408.48
903.69
593.10
27.68

Carbon price (2005 $ per ton

carbon)
US
EU
Japan
Russia
Eurasia
China
India
Middle East
Africa
Latin America
OHI
Other
Global average

2015

2025

2035

2045

2055

2105

34.55
0.00
184.87
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

82.64
74.04
198.12
0.00
0.00
0.00
0.00
0.00
0.00
0.00
20.82
0.00

229.22
196.79
352.71
0.00
0.00
69.54
0.00
0.00
0.00
210.00
160.61
0.00

397.39
476.89
532.04
39.13
11.79
201.85
213.96
0.00
0.00
528.51
361.20
269.48

523.12
706.78
708.96
141.26
114.17
317.52
467.48
168.95
0.00
757.51
527.40
566.65

592.74
878.72
836.46
289.42
297.16
417.29
711.35
553.48
417.91
897.81
648.55
821.90

10.13

22.28

80.29

209.41

354.51

570.71

Table ST5. Carbon price for Copenhagen Accord with no trading

Emissions control
rates (% of baseline)
2005
US
0.0
EU
0.0
Japan
0.0
Russia
0.1
Eurasia
0.1
China
0.0
India
0.0
Middle East
0.0
Africa
0.0
Latin America
0.0
OHI
0.0
Other developing Asia 0.0
Global
0.0

2015
15.5
12.2
12.2
19.5
19.5
17.9
13.9
14.7
13.9
12.7
13.9
13.2
15.4

2025
21.6
16.9
16.9
27.0
27.0
24.8
19.3
20.4
19.3
17.6
19.3
18.4
21.3

2035
26.3
20.6
20.6
33.0
33.0
30.3
23.6
24.8
23.6
21.5
23.6
22.4
25.9

2045
31.5
24.6
24.6
39.4
39.4
36.2
28.1
29.7
28.1
25.6
28.1
26.8
30.7

Table ST6. Emissions control rate, optimal case

2055
37.6
29.4
29.4
47.1
47.1
43.3
33.7
35.5
33.7
30.7
33.7
32.1
36.6

2065
44.3
34.7
34.7
55.6
55.6
51.0
39.7
41.8
39.7
36.2
39.7
37.8
42.9

2075
50.9
39.9
39.9
63.8
63.8
58.6
45.6
48.0
45.6
41.5
45.6
43.4
49.1

2085
57.1
44.7
44.7
71.5
71.5
65.6
51.1
53.8
51.1
46.5
51.1
48.6
54.8

2095
69.0
53.9
53.9
86.4
86.4
79.3
61.7
65.0
61.7
56.2
61.7
58.8
65.9

2105
72.7
56.9
56.9
91.1
91.1
83.6
65.1
68.6
65.1
59.3
65.1
62.0
69.3

Emissions control rates

(% of baseline)
US
EU
Japan
Russia
Eurasia
China
India
Middle East
Africa
Latin America
OHI
Other developing Asia
Global

2005
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0

2015
2.1
1.6
1.6
2.6
0.0
0.0
0.0
0.0
0.0
0.0
1.8
0.0
0.8

2025
9.7
7.6
7.6
12.2
12.2
0.0
0.0
0.0
0.0
0.0
8.7
0.0
3.4

2035
28.7
22.5
22.5
36.0
36.0
33.0
0.0
0.0
0.0
23.4
25.7
0.0
17.7

2045
49.8
38.9
38.9
62.3
62.3
57.2
44.5
0.0
0.0
40.6
44.5
42.4
35.7

2055
64.3
50.3
50.3
80.5
80.5
73.9
57.5
60.6
0.0
52.4
57.5
54.8
53.0

2065
73.3
57.3
57.3
91.8
91.8
84.2
65.5
69.1
0.0
59.7
65.5
62.4
56.2

2075
77.1
60.3
60.3
96.5
96.5
88.6
68.9
72.7
68.9
62.8
68.9
65.7
69.8

2085
82.5
64.6
64.6
103.4
103.4
94.9
73.8
77.8
73.8
67.3
73.8
70.3
73.4

Table ST7. Emissions control rate, Copenhagen Accord with full trading

Carbon price ($ per t C)

2005

2015

2025

2035

US
EU
Japan
Russia
Eurasia
China
India
Middle East
Africa
Latin America
OHI
Other

0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

4.28
5.55
1.69
0.10
0.53
6.81
5.05
2.94
4.17
2.85
2.71
2.44

6.07
7.75
2.26
0.10
0.75
9.87
7.42
4.21
7.00
4.28
3.63
4.22

8.17
10.40
2.81
0.10
0.98
13.77
10.55
5.77
10.90
6.00
4.72
6.88

Global (emissions weighted)

0.00

4.17

6.02

8.31

Table ST8. Calculated carbon prices in Nash equilibrium

[Prices are US 2005 $ per ton carbon]

2095
86.6
67.7
67.7
108.5
108.5
99.6
77.5
81.7
77.5
70.6
77.5
73.8
75.7

2105
89.5
70.0
70.0
112.1
112.1
102.9
80.0
84.4
80.0
72.9
80.0
76.3
77.9

Growth CO2 intensity of global output (% per year)

2%
Emissions weighted growth

Composition

Total

1%

0%
1980

1985

1990

1995

2000

2005

2010

-1%

-2%

-3%

-4%

Figure SF1. Global rates of decarbonization

Emissions weighted growth is regional growth of emissions per unit output weighted by
regions share of emissions. Composition is effect of changes in regional shares.

1,400

Optimal

Carbon price (2005 $ per ton C)

1,200

Lim T<2
Copen Trade

1,000

Copen rich
800

600

400

200

0
2005

2025

2045

2065

2085

Figure SF2. Globally averaged carbon prices in different policy runs

10

2105

Comparison with Earlier RICE/DICE model results. The following graphs provide
comparisons with earlier versions of the RICE/DICE models. The first comprehensive
model was published in 1994. Intermediate versions were in most case published, but in
some cases were circulated or used for other published studies. All economic figures have
been translated into 2005 U.S. dollars using the U.S. GDP price index.

4.0

Global mean temperature increase from 1900 (deg C)

3.5

DICE 1994
RICE 1999
DICE 1999
DICE 2007

3.0

DICE2009
RICE2009

2.5

RICE2010

2.0
1.5
1.0
0.5
0.0
2005 2015 2025 2035 2045 2055 2065 2075 2085 2095 2105

Figure SF3. Comparison of temperature projections, baseline runs, alternative vintages of

RICE/DICE models
This shows the temperature projections from the first DICE model in 1994 through RICE2010.

11

4.0
rice09_0725
Global mean temperature increase from 1900 (deg
C)

3.5

Dicerice_0729
RICE_0729

3.0

RICE_0818
rice0926

2.5

RICE120709
2.0

RICE042610

1.5
1.0
0.5
0.0
2005 2015 2025 2035 2045 2055 2065 2075 2085 2095 2105

Figure SF4. Damages as percent of output, baseline, different vintages DICE/RICE models

500.0

DICE 1994
RICE 1999

450.0

DICE 2007
DICE2009

400.0
Carbon tax (2005 US$ per ton C)

RICE2009
RICE 2010

350.0
300.0
250.0
200.0
150.0
100.0
50.0
0.0
2005

2015

2025

2035

2045

2055

2065

2075

2085

2095

2105

Figure SF5. Estimates of optimal carbon price, different vintages of DICE/RICE models,
1994-2010

12

Comparisons with EMF-22. Energy Modeling Forum 22 provided a model comparison of

several integrated assessment models. The RICE 2010 model was not completed at that
time and did not participate. The most useful comparison is the EMF Reference scenario,
which is the modelers projection with no climate change policies. A discussion of the EMF
results is contained in reference (14) of the main article. Results for EMF-22 were made
available by the organizers as an Excel file.
The results were available for 10 models: ETSAP-TIAM, FUND, GTEM, MERGE
Optimistic, MERGE Pessimistic, MESSAGE, MiniCAM BASE, POLES, SGM, and WITCH.
Figure SF6 shows the RICE-2010 base projection along with the 10th, 50th, and 90th percentile
of the EMF-22 runs.

1000

Atmosphericconcentrations(ppm)

900

EMF:10
EMF:50

800
700

EMF:90
RICE

600
500
400
300
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Fig SF6. Comparison between RICE-2010 and EMF-22 CO2 concentrations

13

Nash Equilibrium Calculations. The Nash equilibrium is calculated iteratively. The

procedure starts with the base run. It then performs a full dynamic optimization of the carbon
price region-by-region taking other regions carbon prices as given. This technique is standard
(17, 31 of the main article.) Estimates from earlier modeling results generally used the
emissions-control rate rather than the carbon tax as the control variable, but this raises no
issues of principle except convergence.
The step-by-step algorithm cycles through the regions until convergence is attained.
Stability (change < 0.5%) was attained in the third iteration. The carbon prices for Russia were
constrained to be positive. Note that this procedure will overestimate the Nash equilibrium
prices for multi-country regions (e.g., Africa) because it assumes they act as a coalition. On the
other hand, if several regions act together (say, the high-income countries) as a coalition, the
equilibrium prices would be higher.
Table ST8 shows the equilibrium prices for the first four periods with the first period
constrained to be 0.

Carbon price ($ per t C)

2005

2015

2025

2035

US
EU
Japan
Russia
Eurasia
China
India
Middle East
Africa
Latin America
OHI
Other

0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00

4.28
5.55
1.69
0.10
0.53
6.81
5.05
2.94
4.17
2.85
2.71
2.44

6.07
7.75
2.26
0.10
0.75
9.87
7.42
4.21
7.00
4.28
3.63
4.22

8.17
10.40
2.81
0.10
0.98
13.77
10.55
5.77
10.90
6.00
4.72
6.88

Global (emissions weighted)

0.00

4.17

6.02

8.31

Table ST8. Calculated carbon prices in Nash equilibrium

[Prices are US 2005 $ per ton carbon]

14