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Progress In Estimating The Marginal Costs Of Greenhouse Gas Emissions

Author

Listed:
  • Richard S.J. Tol

    (Economic and Social Research Institute, Dublin)

  • Thomas E. Downing
  • Samuel Fankhauser
  • Richard G. Richels
  • Joel B. Smith

Abstract

The unjust distributional consequences of climate change, and its potentially negative aggregate effect on economic growth and welfare are two reasons to be concerned about climate change. Our knowledge of the impact of climate change is incomplete. Monetary valuation is difficult and controversial. The effect of other developments on the impacts of climate change is largely speculative. Nonetheless, it can be shown that poorer countries and people are more vulnerable than are richer countries and people. A modest global warming is likely to have a net negative effect on poor economics in hot climates, but may have a positive effect on rich economies in temperate climates. If one counts dollars, the world aggregate impact may be positive. If one counts people, the world aggregate effect is probably negative. For more substantial warming, negative effects become more negative, and positive effects turn negative. The marginal costs of carbon dioxide emissions are uncertain and sensitive to assumptions that partially reflect ethical and methodological positions, but are unlikely to exceed $50 per tonne of carbon. The marginal costs of methane emission are likely to be less than $250/tCH4; the marginal costs of nitrous oxide emissions are probably lower than $7000/tN2O. Global warming potentials, the official manner to trade-off the various greenhouse gases, do not reflect, conceptually or numerically, the real tradeoffs in either a cost-benefit or a cost-effectiveness framework.

Suggested Citation

  • Richard S.J. Tol & Thomas E. Downing & Samuel Fankhauser & Richard G. Richels & Joel B. Smith, 2001. "Progress In Estimating The Marginal Costs Of Greenhouse Gas Emissions," Working Papers FNU-4, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2001.
  • Handle: RePEc:sgc:wpaper:4
    as

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    References listed on IDEAS

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    12. Richard Tol, 1999. "Spatial and Temporal Efficiency in Climate Policy: Applications of FUND," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(1), pages 33-49, July.
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    Cited by:

    1. Wahba, Mohammed & Hope, Chris, 2006. "The marginal impact of carbon dioxide under two scenarios of future emissions," Energy Policy, Elsevier, vol. 34(17), pages 3305-3316, November.
    2. Sanz, M. Teresa & Cansino, José M. & González-Limón, José M. & Santamaría, Marta & Yñiguez, Rocío, 2014. "Economic assessment of CO2 emissions savings in Spain associated with the use of biofuels for the transport sector in 2010," Utilities Policy, Elsevier, vol. 29(C), pages 25-32.
    3. Vaal, Albert de & Yetkiner, I. Hakan & Zon, Adriaan van, 2002. "The cyclical advancement of drastic technologies," CCSO Working Papers 200217, University of Groningen, CCSO Centre for Economic Research.
    4. Stagnaro, Carlo, 2008. "Europe 2020: an Alternative Proposal," MPRA Paper 48743, University Library of Munich, Germany.
    5. Richard S.J. Tol, 2003. "The Marginal Costs Of Carbon Dioxide Emissions: An Assessment Of The Uncertainties," Working Papers FNU-19, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2003.
    6. Linda Sygna & Jan Fuglestvedt & H. Aaheim, 2002. "The adequacy of GWPs as indicators of damage costsincurred by global warming," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 7(1), pages 45-62, March.
    7. P. Michael Link, 2003. "Auswirkungen populationsdynamischer Veränderungen in Fischbeständen auf die Fischereiwirtschaft in der Barentssee," Working Papers FNU-29, Research unit Sustainability and Global Change, Hamburg University, revised May 2003.
    8. 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.
    9. Giles Atkinson & Haripriya Gundimeda, 2006. "Accounting for India’s Forest Wealth," Development Economics Working Papers 22494, East Asian Bureau of Economic Research.
    10. I. Hakan Yetkiner, 2003. "Is There An Indispensable Role For Government During Recovery From An Earthquake? A Theoretical Elaboration," Working Papers FNU-25, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2003.
    11. Atkinson, Giles & Gundimeda, Haripriya, 2006. "Accounting for India's forest wealth," Ecological Economics, Elsevier, vol. 59(4), pages 462-476, October.
    12. Roberto Roson & Richard s.J. Tol, 2003. "An Integrated Assessment Model Of Economy-Energy-Climate – The Model Wiagem: A Comment," Working Papers FNU-26, Research unit Sustainability and Global Change, Hamburg University, revised May 2003.

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    More about this item

    Keywords

    Impacts of climate change; economic valuation; equity; marginal costs;
    All these keywords.

    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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