@article{Bazzana:334607,
      recid = {334607},
      author = {Bazzana, Davide and Rizzati, Massimiliano and Ciola,  Emanuele and Turco, Enrico and Vergalli, Sergio},
      title = {Warming the MATRIX: a Climate Assessment under Uncertainty  and Heterogeneity},
      address = {2023-05-11},
      number = {2395-2023-644},
      series = {09.2023},
      pages = {50},
      month = {May},
      year = {2023},
      abstract = {This paper explores the potential impacts of climate  change and mitigation policies on the Euro Area,  considering the uncertainty and heterogeneity in both  climate and economic systems. Using the MATRIX model, a  multi-sector and multi-agent macroeconomic model, we  simulate various climate scenarios by employing different  carbon cycle models, damage functions, and marginal  abatement curves found in the literature. We find that  heterogeneous climate damages amplify both the magnitude  and the volatility of GDP losses associated with global  warming. By the end of the century, we estimate that  assuming homogeneous shocks may underestimate the effects  of climate change on aggregate output by up to one-third.  Moreover, we find that the speed and feasibility of a  low-carbon transition crucially depend on (i) the  stringency of emission reduction targets, which determine  the level of a carbon tax, and (ii) the rate of  technological progress, which influences the shape of the  abatement cost curve.},
      url = {http://ageconsearch.umn.edu/record/334607},
      doi = {https://doi.org/10.22004/ag.econ.334607},
}