1. A model which combines scientific and socio-economic aspects of climate change primarily for the purpose of assessing policy options for climate change control Simulates macroeconomic impacts of climate policies designed to achieve particular emissions trajectories

3. Issue 2: Predicting the unpredictable and pricing the priceless 1.Uncertainty in climate change 2.Benefit assessment: i.Income bias ii.Incomplete picture associated with benefit from global warming iii.Subjectivity in damage assessment- Stern using monte carlo draws

4. Limitations of IAMS Assuming predictable technology improvements Assuming on the production possibility frontier

5. Recommendation Use insurance concept to treat climate change issue – Unknown probability distribution – Potentially disastrous outcomes Economists should focus on the cost-effective global strategy for achieving those targets