Determining the Social Cost of Carbon: Under Damage and Climate Sensitivity Uncertainty

被引:3
作者
Okullo, Samuel Jovan [1 ,2 ]
机构
[1] Zhongnan Univ Econ & Law, Sch Business Adm, 182 Nanhu Ave, Wuhan 430073, Hubei, Peoples R China
[2] Potsdam Inst Climate Impact Res PIK, Leibniz Assoc, POB 601203, D-14412 Potsdam, Germany
关键词
Social cost of carbon (SCC); Epstein-Zin-Weil preferences; DICE; Climate change; Risk aversion; RISK-AVERSION; INTEGRATED ASSESSMENT; TEMPORAL BEHAVIOR; ASSET RETURNS; ECONOMICS; GROWTH; TEMPERATURE; POLICY; SUBSTITUTION; CONSUMPTION;
D O I
10.1007/s10640-019-00389-w
中图分类号
F [经济];
学科分类号
02 ;
摘要
This article quantifies the impact on optimal climate policy, of both damage elasticity and equilibrium climate sensitivity uncertainty, under separable preferences for risk and intergenerational inequality. The primary findings are as follows. (1) Such preferences can depress the social cost of carbon (SCC) when calibration aims at matching actual economic outcomes, countering the prevailing view that the SCC is greater with separable than with conventional entangled preferences. (2) Damage elasticity uncertainty has larger effects on climate policy than equilibrium climate sensitivity uncertainty, even under high impact tail risk of the latter. (3) Risk aversion decisively strengthens optimal climate policy under joint damage and climate sensitivity uncertainty, than with a single source of uncertainty alone. Indeed, failing to account for the interaction between damage and climate sensitivity uncertainty underestimates the cost of climate change by more than US dollars 1 trillion.
引用
收藏
页码:79 / 103
页数:25
相关论文
共 56 条
  • [1] Epstein-Zin Utility in DICE: Is Risk Aversion Irrelevant to Climate Policy?
    Ackerman, Frank
    Stanton, Elizabeth A.
    Bueno, Ramon
    [J]. ENVIRONMENTAL & RESOURCE ECONOMICS, 2013, 56 (01) : 73 - 84
  • [2] Fat tails, exponents, extreme uncertainty: Simulating catastrophe in DICE
    Ackerman, Frank
    Stanton, Elizabeth A.
    Bueno, Ramon
    [J]. ECOLOGICAL ECONOMICS, 2010, 69 (08) : 1657 - 1665
  • [3] On the generation and interpretation of probabilistic estimates of climate sensitivity
    Annan, J. D.
    Hargreaves, J. C.
    [J]. CLIMATIC CHANGE, 2011, 104 (3-4) : 423 - 436
  • [4] [Anonymous], 2013, DICE 2013R INTRO USE
  • [5] Determining Benefits and Costs for Future Generations
    Arrow, K.
    Cropper, M.
    Gollier, C.
    Groom, B.
    Heal, G.
    Newell, R.
    Nordhaus, W.
    Pindyck, R.
    Pizer, W.
    Portney, P.
    Sterner, T.
    Tol, R. S. J.
    Weitzman, M.
    [J]. SCIENCE, 2013, 341 (6144) : 349 - 350
  • [6] Arrow K., 1999, DISCOUNTING INTERGEN, P13
  • [7] Mesoscale flow and heat transfer modelling and its application to liquid and gas flows
    Asproulis, Nikolaos
    Kalweit, Marco
    Shapiro, Evgeniy
    Drikakis, Dimitris
    [J]. JOURNAL OF NANOPHOTONICS, 2009, 3
  • [8] Global Warming and a Potential Tipping Point in the Atlantic Thermohaline Circulation: The Role of Risk Aversion
    Belaia, Mariia
    Funke, Michael
    Glanemann, Nicole
    [J]. ENVIRONMENTAL & RESOURCE ECONOMICS, 2017, 67 (01) : 93 - 125
  • [9] Bretschger L, 2019, ENVIRON RESOUR ECON, V72, P5, DOI 10.1007/s10640-018-0219-y
  • [10] CLIMATE ECONOMICS Opportunities for advances in climate change economics
    Burke, M.
    Craxton, M.
    Kolstad, C. D.
    Onda, C.
    Allcott, H.
    Baker, E.
    Barrage, L.
    Carson, R.
    Gillingham, K.
    Graf-Zivin, J.
    Greenstone, M.
    Hallegatte, S.
    Hanemann, W. M.
    Heal, G.
    Hsiang, S.
    Jones, B.
    Kelly, D. L.
    Kopp, R.
    Kotchen, M.
    Mendelsohn, R.
    Meng, K.
    Metcalf, G.
    Moreno-Cruz, J.
    Pindyck, R.
    Rose, S.
    Rudik, I.
    Stock, J.
    Tol, R. S. J.
    [J]. SCIENCE, 2016, 352 (6283) : 292 - 293