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Climate change damage and the trace gas index issue

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  • John Reilly
  • Kenneth Richards

Abstract

Efficient policies to control trace gas emissions require estimation of an appropriate “exchange rate” among these gases; i.e. the relative value of reducing emissions of each gas. A dynamic stock pollutant model is developed that considers damages associated with both non-climatic and climatic effects of the gases, differing atmospheric lifetimes of the gases, the discount rate, and non-linear damages. The index value and shadow value of control are estimated for carbon dioxide, carbon monoxide, methane, nitrous oxide and the 4 major chlorofluorocarbons (CFCs). The value of control for short-lived relative to long-lives gases is lower for low discount rates and quadratic compared with linear damages. The relative value of control for all gases falls relative to carbon dioxide if one considers the direct beneficial effects of carbon dioxide on agriculture. The general approach developed in the paper may have application for other environmental problems where multiple substances pose individual risks but also jointly contribute to a single risk. Copyright Kluwer Academic Publishers 1993

Suggested Citation

  • John Reilly & Kenneth Richards, 1993. "Climate change damage and the trace gas index issue," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 3(1), pages 41-61, February.
  • Handle: RePEc:kap:enreec:v:3:y:1993:i:1:p:41-61
    DOI: 10.1007/BF00338319
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. Tol, Richard S. J., 2008. "The Social Cost of Carbon: Trends, Outliers and Catastrophes," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 2, pages 1-22.
    3. Barbara Annicchiarico & Francesca Diluiso, 2017. "International Transmission of the Business Cycle and Environmental Policy," CEIS Research Paper 423, Tor Vergata University, CEIS, revised 19 Dec 2017.
    4. Katsumasa Tanaka & Richard S.J. Tol & Dmitry Rokityanskiy & Brian C. O'Neill & Michael Obersteiner, 2006. "Evaluating Global Warming Potentials as Historical Temperature Proxies: an application of ACC2 Inverse Calculation," Working Papers FNU-118, Research unit Sustainability and Global Change, Hamburg University, revised Sep 2006.
    5. Michael Toman, 1998. "Research Frontiers in the Economics of Climate Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 603-621, April.
    6. Marian Leimbach, 1996. "Development of a Fuzzy optimization model, supporting global warming decision-making," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 7(2), pages 163-192, March.
    7. Tol, Richard S. J. & Berntsen, Terje K. & O'Neill, Brian C. & Fuglestvedt, Jan S. & Shine, Keith P. & Balkanski, Yves & Makra, Laszlo, 2008. "Metrics for Aggregating the Climate Effect of Different Emissions: A Unifying Framework," Papers WP257, Economic and Social Research Institute (ESRI).

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