Climate change: discount or not? future generations don't care that much
AbstractThis paper proposes a new way to model the cost of climate change, based on a vintage capital modeling. Climate change destroys capital, according to the difference between the current climate and the climate that prevailed when a given durable was built. This assumption is meant to account for the adaptation of economic agents to the changing climate. The main result is that the carbon tax is much less sensitive to the rate of time preference than in the Stern-Nordhaus controversy. Moreover, despite an estimate of the cost in line with Nordhaus' estimate for the 21st century, we find an optimal carbon tax much lower than his one.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 27358.
Date of creation: 09 Dec 2010
Date of revision:
global warming; stock pollution; carbon tax; discount rate;
Find related papers by JEL classification:
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-18 (All new papers)
- NEP-ENE-2010-12-18 (Energy Economics)
- NEP-ENV-2010-12-18 (Environmental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2009.
"Temperature and Income: Reconciling New Cross-Sectional and Panel Estimates,"
NBER Working Papers
14680, National Bureau of Economic Research, Inc.
- Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2009. "Temperature and Income: Reconciling New Cross-Sectional and Panel Estimates," American Economic Review, American Economic Association, vol. 99(2), pages 198-204, May.
- Frederick Ploeg & Cees Withagen, 1991.
"Pollution control and the Ramsey problem,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 1(2), pages 215-236, June.
- C. G. Plourde, 1972. "A Model of Waste Accumulation and Disposal," Canadian Journal of Economics, Canadian Economics Association, vol. 5(1), pages 119-25, February.
- Grimaud, André & Rougé, Luc, 2003.
"Polluting Non-Renewable Resources, Innovation and Growth : Welfare and Environmental Policy,"
IDEI Working Papers
206, Institut d'Économie Industrielle (IDEI), Toulouse.
- Grimaud, Andre & Rouge, Luc, 2005. "Polluting non-renewable resources, innovation and growth: welfare and environmental policy," Resource and Energy Economics, Elsevier, vol. 27(2), pages 109-129, June.
- Geoffrey Heal, 2009. "Climate Economics: A Meta-Review and Some Suggestions for Future Research," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 3(1), pages 4-21, Winter.
- Gollier, Christian, 2006. "An Evaluation of Stern's Report on the Economics of Climate Change," IDEI Working Papers 464, Institut d'Économie Industrielle (IDEI), Toulouse.
- Forster, B A, 1973. "Optimal Consumption Planning in a Polluted Environment," The Economic Record, The Economic Society of Australia, vol. 49(128), pages 534-45, December.
- Martin L. Weitzman, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 703-724, September.
- Mendelsohn, Robert & Nordhaus, William D & Shaw, Daigee, 1994. "The Impact of Global Warming on Agriculture: A Ricardian Analysis," American Economic Review, American Economic Association, vol. 84(4), pages 753-71, September.
- Kenneth Stollery, 1998. "Constant Utility Paths and Irreversible Global Warming," Canadian Journal of Economics, Canadian Economics Association, vol. 31(3), pages 730-742, August.
- William D. Nordhaus, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 686-702, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.