Sensitivity of mitigation to the optimal global temperature: An experiment with dice

It is commonly assumed that the temperature which optimizes global production and welfare is the global temperature in 1900. There is an empirical evidence, however, that suggests a slightly warmer, wetter, and CO₂ enriched planet which is more productive. This paper explores the sensitivity of mitigation and the Social Cost of Carbon (SCC) to different assumptions about the optimal global temperature using DICE 2016R. Each 1°C increase in optimal global temperature lowers the SCC in 2020 by about half and delays the mitigation path by about a decade, but increases the long run temperature only slightly.