Integrated Assessment Models represent stylised mechanisms and processes underlying world economic activity and the environment, and provide information on policy choices through appropriate data from simulations. This Background Note highlights an example of the benefits of IAMs for climate change policy analyses and examines the environmental and welfare effects of different mitigation policies. Scenarios are organised to reflect different hypotheses around the participation of developing countries in international agreements to stabilise emissions.
The paper provides a definition of IAMs, describes the different categories of IAMs and the policy questions they can address. It also explains the advantages and disadvantages of these tools for research analysis. Finally, we provide an example of the type of policies that can be investigated using IAMs.