Updating Climate Beliefs Based on Latest IPCC Report Points to Increased Willingness to Invest in the Clean Energy Transition
by Mark Freeman, Ben Groom, Frikk Nesje, and Gernot Wagner
Abstract:
We assess how changes in the scientific consensus around equilibrium climate sensitivity (ECS), as captured by the IPCC’s Fifth (AR5) and Sixth (AR6) Assessment Reports, impact policymakers’ willingness to take climate action, including through increasing subsidies to investments that will help to deliver the clean energy transition. Taking the IPCC’s reports at face value, the ECS estimates in AR6 would have lowered a policymaker’s willingness to act on climate relative to AR5 due to a narrower “likely” range. However, Bayesian updating may reverse this conclusion. An accuracy-motivated policymaker who was not convinced to take greater climate action by the evidence in AR5 may be more likely to increase their investment in clean energy by the evidence in AR6.
Keywords: Energy Policy, Equilibrium climate sensitivity, Bayesian updating
Full paper: "Updating Climate Beliefs Based on Latest IPCC Report Points to Increased Willingness to Invest in the Clean Energy Transition" (4 June 2025); CESifo Working Paper No. 11668.
Presented at: EARE Conference 16-19 June 2025, Bergen, Norway, by co-author Frikk Nesje: "Behavioral economics" egg timer session, 18 June 2025, 2:00pm-3:45pm; Auditorium J: Aina Uhde.
