Convexity Analysis of the Dynamic Integrated Model of Climate and the Economy (DICE)

摘要

We study the convexity properties of Dynamic Integrated Model of Climate and the Economy (DICE), which is a nonlinear optimization problem. Through some optima-preserving transformations and convex function analysis, we conclude that the DICE model is a hidden convex optimization problem when using the standard parameter values. This result implies that the solutions obtained from the model under these settings are globally optimal and are accurately reflective of the complex economic relationships modeled. We also provide sufficient conditions on the parameter space that assure this property.