Climate Impacts on Natural Capital: Consequences for the Social Cost of Carbon

Annual Review of Resource Economics, Forthcoming

25 Pages Posted: 25 Oct 2021

See all articles by Bernardo A. Bastien-Olvera

Bernardo A. Bastien-Olvera

University of California, Davis

Frances C. Moore

University of California, Davis

Multiple version iconThere are 2 versions of this paper

Date Written: October 15, 2021

Abstract

The effects of climate change on natural systems will be substantial, wide-spread, and likely irreversible. Warmer temperatures and changing precipitation patterns have already contributed to forest dieback and pushed some species towards extinction. Natural systems contribute to human welfare both as an input to the production of consumption goods and through the provision of non-use values (i.e. existence and bequest values). But because they are often unpriced, it can be difficult to constrain these benefits. Understanding how climate change effects on the natural capital stock affect human well-being, and therefore the social cost of carbon (SCC), requires understanding not just the biophysical effects of climate change, but also the particular role they play in supporting human welfare. This article reviews a range of topics from natural capital accounting through climate change economics important for quantifying the ecological costs of climate change, and the integration of these costs into SCC calculations.

Keywords: climate change, natural capital, ecosystem services, social cost of carbon, climate damages

JEL Classification: Q5, Q51, Q54, Q57

Suggested Citation

Bastien-Olvera, Bernardo A. and Moore, Frances C., Climate Impacts on Natural Capital: Consequences for the Social Cost of Carbon (October 15, 2021). Annual Review of Resource Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3945184 or http://dx.doi.org/10.2139/ssrn.3945184

Bernardo A. Bastien-Olvera

University of California, Davis ( email )

One Shields Avenue
Davis, CA 95616
United States

Frances C. Moore (Contact Author)

University of California, Davis ( email )

One Shields Avenue
Wickson 2140
Davis, CA 95616
United States

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