The Time Evolution of the Social Cost of Carbon: An Application of Fund
University of California, Berkeley - Department of Agricultural & Resource Economics
Electric Power Research Institute
Richard S. J. Tol
VU University Amsterdam - Institute for Environmental Studies (IVM); Carnegie Mellon University - Center for Integrated Study of the Human Dimensions of Global Change; University of Hamburg - Centre for Marine and Climate Research (ZMK); Princeton University
Stephanie T. Waldhoff
affiliation not provided to SSRN
Economics Discussion Paper No. 2011-44
The authors estimate the growth rate of the social cost of carbon. This is an indication of the optimal rate of acceleration of greenhouse gas emission reduction policy over time. The authors find that the social cost of carbon increases by 1.3% to 3.9% per year, with a central estimate of 2.2%. Previous studies found an average rate of 2.3% and a range of 0.9 to 4.1%. The rate of increase of the social carbon depends on a range of factors, including the pure rate of time preference, the rate of risk aversion, equity weighting, the socioeconomic and emission scenarios, the climate sensitivity, dynamic vulnerability, and the curvature of the impact functions.
Number of Pages in PDF File: 22
Keywords: social cost of carbon
JEL Classification: Q54
Date posted: December 18, 2011
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