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The Uncertainty about the Total Economic Impact of Climate Change

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  • Tol, Richard S. J.

Abstract

This paper uses a vote-counting procedure to estimate the probability density function of the total economic impact as a parabolic function of global warming. There is a wide range of uncertainty about the impact of climate change up to 3ºC, and the information becomes progressively more diffuse beyond that. Warming greater than 3ºC most likely has net negative impacts, and warming greater than 7ºC may lead to a total welfare loss. The expected value of the social cost of carbon is about $29/tC in 2015 and rises at roughly 2% per year.

Suggested Citation

  • Tol, Richard S. J., 2011. "The Uncertainty about the Total Economic Impact of Climate Change," Papers WP382, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp382
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    References listed on IDEAS

    as
    1. Tol, Richard S. J., 2005. "The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties," Energy Policy, Elsevier, vol. 33(16), pages 2064-2074, November.
    2. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801.
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      • Katrin Rehdanz & David J. Maddison, 2003. "Climate and Happiness," Working Papers FNU-20, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2003.
    6. Richard S J Tol, 2018. "The Economic Impacts of Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 12(1), pages 4-25.
    7. Plambeck, Erica L & Hope, Chris, 1996. "PAGE95 : An updated valuation of the impacts of global warming," Energy Policy, Elsevier, vol. 24(9), pages 783-793, September.
    8. Martin L. Weitzman, 2009. "On Modeling and Interpreting the Economics of Catastrophic Climate Change," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 1-19, February.
    9. Roy Brouwer & Frank Spaninks, 1999. "The Validity of Environmental Benefits Transfer: Further Empirical Testing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(1), pages 95-117, July.
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    More about this item

    Keywords

    Climate change/uncertainty/impacts/Social cost of carbon/cost;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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