The DICER Model: Methodological Issues and Initial Results

The document presents the DICER (DICE-Regional) model, which improves upon the DICE2007 model by introducing regional specifications for damage and abatement cost functions and a modified climate module. Initial deterministic results indicate lower peak temperatures (2.6°C) and more rapid emission reductions compared to DICE2007. The authors also propose a risk-adjusted cost-benefit analysis using option pricing to account for uncertainty, finding that incorporating volatility in damages and costs lowers maximum mean temperatures by approximately 0.5°C.

• The DICER model differs from DICE2007 by incorporating a regional specification, a modified climate model, updated damage and abatement cost functions, and a user-friendly interface.
• In its deterministic version under an optimal policy scenario, DICER predicts that atmospheric CO2 concentrations will peak at approximately 500ppm around the year 2068, with atmospheric temperatures peaking at 2.6°C around 2078.
• DICER results show a more rapid reduction in emissions than DICE2007, with all regions expected to reach a 100% emission control rate by the beginning of the 21st century, compared to 44.3% in DICE2007.
• The model's estimates for the social cost of carbon in an optimal policy scenario are higher than those presented in the DICE2007 optimal policy scenario.
• Monte Carlo simulations indicate that optimal policy is more significantly impacted by climate sensitivity than by economic exogenous variables or the discount rate; peak temperatures under optimal policy vary between 1.8°C and 4.3°C based on climate sensitivity.
• Applying a risk-adjusted cost-benefit analysis via option pricing to account for volatility in damages and abatement costs reduces maximum mean temperatures by about 0.5°C.

APA

Ortiz, R. A., Golub, A., Lugovoy, O., Markandya, A., & Wang, J. (2010). The DICER Model: Methodological Issues and Initial Results. Basque Centre for Climate Change. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/20100914091104771918075.pdf

Chicago

Ortiz, Ramon Arigoni, Alexander Golub, Oleg Lugovoy, Anil Markandya, and James Wang. The DICER Model: Methodological Issues and Initial Results. Basque Centre for Climate Change, 2010. https://www.bc3research.org/h6T8Uy8Nm4gFs0O/20100914091104771918075.pdf.

Wikipedia

{{cite report |last1=Ortiz |first1=Ramon Arigoni |last2=Golub |first2=Alexander |last3=Lugovoy |first3=Oleg |last4=Markandya |first4=Anil |last5=Wang |first5=James |title=The DICER Model: Methodological Issues and Initial Results |publisher=Basque Centre for Climate Change |date=July 2010 |url=https://www.bc3research.org/h6T8Uy8Nm4gFs0O/20100914091104771918075.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ortiz2010dicer, author = {Ortiz, Ramon Arigoni and Golub, Alexander and Lugovoy, Oleg and Markandya, Anil and Wang, James}, title = {{The DICER Model: Methodological Issues and Initial Results}}, institution = {Basque Centre for Climate Change}, year = {2010}, month = jul, url = {https://www.bc3research.org/h6T8Uy8Nm4gFs0O/20100914091104771918075.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }