Building Interpretable Climate Emulators for Economics
2025-12-05
We introduce a framework for developing efficient and interpretable climate emulators for economic models of climate change. The paper makes two main contributions. First, we propose a general framework for constructing carbon cycle emulators for macroeconomic models. The framework is implemented as a generalised linear multi-reservoir (box) model that conserves key physical quantities and can be customised for specific applications. We consider three versions of the carbon cycle emulator, which we evaluate within a simple representative agent economic model: (i) a three-box setting comparable to DICE-2016; (ii) a four-box extension; and (iii) a four-box version that explicitly captures land use change. While the three-box model reproduces benchmark results well, and the fourth reservoir adds little, incorporating the impact of land use change on the carbon storage capacity of the terrestrial biosphere substantially alters atmospheric carbon stocks, temperature trajectories and the optimal mitigation path. Second, we investigate pattern-scaling techniques that transform global mean temperature projections from climate emulators into spatially heterogeneous warming fields. We show how regional baseline climates, non-uniform warming and the associated uncertainties propagate into economic damages.