On International Equity Weights and National Decision Making on Climate Change

30 Pages Posted: 27 Aug 2008

See all articles by David Anthoff

David Anthoff

University of California, Berkeley - Energy and Resources Group

Richard S. J. Tol

The Economic and Social Research Institute, Dublin; Institute for Environmental Studies, Free University Amsterdam

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Date Written: August 2008

Abstract

Estimates of the marginal damage costs of carbon dioxide emissions require the aggregation of monetised impacts of climate change over people with different incomes and in different jurisdictions. Implicitly or explicitly, such estimates assume a social welfare function and hence a particular attitude towards equity and justice. We show that previous approaches to equity weighing are inappropriate from a national decision maker's point of view, because domestic impacts are not valued at domestic values. We propose four alternatives (sovereignty, altruism, good neighbour, and compensation) with different views on concern for and liability towards foreigners. The four alternatives imply radically estimates of the social cost of carbon and hence the optimal intensity of climate policy.

Keywords: domestic climate policy, social cost of carbon, equity weights

JEL Classification: Q54

Suggested Citation

Anthoff, David and Tol, Richard S. J., On International Equity Weights and National Decision Making on Climate Change (August 2008). CESifo Working Paper Series No. 2373. Available at SSRN: https://ssrn.com/abstract=1259644

David Anthoff (Contact Author)

University of California, Berkeley - Energy and Resources Group ( email )

United States

Richard S. J. Tol

The Economic and Social Research Institute, Dublin ( email )

Whitaker Square
Sir John Rogerson's Quay
Dublin 2
United States

HOME PAGE: http://www.esri.ie

Institute for Environmental Studies, Free University Amsterdam ( email )

De Boelelaan 1115
Amsterdam, 1081 HV
Netherlands

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