The Social Cost of Carbon

Posted: 16 Sep 2011

See all articles by Richard S. J. Tol

Richard S. J. Tol

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

Date Written: October 2011

Abstract

This article surveys the literature on the economic impact of climate change. Different methods have been used to estimate the impact of climate change on human welfare. Studies agree that there are positive and negative impacts. In the short term, positive impacts may dominate, but these are sunk benefits that will obtain regardless of abatement policy. In the longer term, there are net negative impacts. Poorer people tend to be more vulnerable to climate change. Estimated aggregate impacts are not very large, but they are uncertain and incomplete. Estimates of the marginal impacts suggest that greenhouse gas emissions should be taxed and that the emission reduction targets announced by politicians are probably too ambitious. Estimates of the willingness to pay for climate policy suggest that lay people are probably more concerned than experts about the total impact of climate change, whereas lay people and experts agree on estimates of the incremental impact of carbon dioxide emissions.

Suggested Citation

Tol, Richard S. J., The Social Cost of Carbon (October 2011). Annual Review of Resource Economics, Vol. 3, Issue 1, pp. 419-443, 2011. Available at SSRN: https://ssrn.com/abstract=1928377 or http://dx.doi.org/10.1146/annurev-resource-083110-120028

Richard S. J. Tol (Contact Author)

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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