Short answers, pulled from the story.
Integrated assessment modelling is used to support informed policy-making, primarily in the context of climate change. It links features of society and economy with the biosphere and atmosphere to estimate what possible future scenarios look like. The models have also been applied to the Sustainable Development Goals, food security, conflict patterns, and development trends in Africa.
There are two primary distinctions. The first separates process-based models, which quantify future developmental pathways and provide detailed sectoral information, from cost-benefit models, which aggregate the total costs of climate change and mitigation. The second separates models that extrapolate verified patterns using econometric equations from those that seek globally optimal economic solutions assuming market equilibrium.
The DICE, PAGE, and FUND models have been used by the US Interagency Working Group to calculate the social cost of carbon. Their results have been used for regulatory impact analysis. The social cost of carbon represents the marginal social cost of emitting one additional tonne of carbon dioxide into the atmosphere at any point in time.
In an October 2021 working paper, Nicholas Stern argued that existing integrated assessment models are inherently unable to capture the economic realities of the climate crisis under its current state of rapid progress. His critique suggested the models could not keep pace with the speed and scale of change actually occurring.
Critics argue that IAM-based analyses create a perception of knowledge and precision that is illusory and can mislead policy-makers about the scientific legitimacy of model forecasts. Models using optimisation methods have been criticised for failing to account for "radical" or "fundamental" uncertainty about future system states. IAMs have also been criticised for undervaluing renewable electricity from wind and solar while overvaluing bioenergy and carbon capture and storage.
Notable process-based integrated assessment modelling frameworks include IMAGE, MESSAGEix, AIM/GCE, GCAM, REMIND-MAgPIE, and WITCH-GLOBIOM. These frameworks have been used by the Intergovernmental Panel on Climate Change to quantify mitigation scenarios and to explore pathways for staying within the 1.5 degree Celsius target agreed upon in the Paris Agreement.