Regional and Sectoral Estimates of the Social Cost of Carbon: An Application of Fund

Anthoff, David; Rose, Steven; Tol, Richard S. J.; Waldhoff, Stephanie T.

doi:10.2139/ssrn.1972778

Regional and Sectoral Estimates of the Social Cost of Carbon: An Application of Fund

Economics Discussion Paper No. 2011-18

31 Pages Posted: 15 Dec 2011

See all articles by David Anthoff

David Anthoff

University of California, Berkeley - Energy and Resources Group

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

Date Written: 2011

Abstract

The social cost of carbon is an estimate of the benefit of reducing CO2 emissions by one ton today. As such it is a key input into cost-benefit analysis of climate policy and regulation. We provide a set of new estimates of the social cost of carbon from the integrated assessment model FUND 3.5 and present a regional and sectoral decomposition of our new estimate. China, Western Europe and the United States have the highest share of harmful impacts, with the precise order depending on the discount rate. The most important sectors in terms of impacts are agriculture and increased energy use for cooling. We present an extensive sensitivity analysis with respect to the discount rate, equity weights, different socio economic scenarios and values for the climate sensitivity parameter.

Keywords: Climate change, social cost of carbon

JEL Classification: Q54

Suggested Citation: Suggested Citation

Anthoff, David and Rose, Steven and Tol, Richard S. J. and Waldhoff, Stephanie T., Regional and Sectoral Estimates of the Social Cost of Carbon: An Application of Fund (2011). Economics Discussion Paper No. 2011-18, Available at SSRN: https://ssrn.com/abstract=1972778 or http://dx.doi.org/10.2139/ssrn.1972778