The Weitzman Model

The Weitzman Model is an economic framework used to evaluate the uncertainty and timing of future costs, particularly for climate change. It compares investing now versus delaying action, considering that the costs of fixing climate issues might rise over time, and the probability of catastrophic outcomes increases. The model emphasizes the importance of taking early action to avoid the exponential rise in damages and costs associated with delay, highlighting that waiting could be more expensive in the long run. Essentially, it helps policymakers decide when and how much to invest in mitigation to minimize total expected costs under uncertainty.