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Reply to comment on “climate sensitivity, agricultural productivity and the social cost of carbon in fund” by Philip Meyer

Author

Listed:
  • Kevin Dayaratna

    (Heritage Foundation)

  • Ross McKitrick

    (University of Guelph)

Abstract

Meyer (Environ Econ Policy Stud, 2022) questions a number of assumptions behind the social cost of carbon (SCC) calculations in Dayaratna et al. (Environ Econ Policy Stud 22:433–448, 2020), especially the CO2 fertilization benefit and the climate sensitivity estimate. He recommends against increasing the CO2 effect and suggests applying a recent climate sensitivity estimate in Lewis, Clim Dyn (2022), but did not calculate the resulting SCC distribution. Herein we critically assess his recommendations and compute the SCC distribution they imply. It has a median SCC value in 2050 of $3.39 and implies a 33.4 percent probability of the optimal carbon tax being negative. While a bit higher than the results in Dayaratna et al. (Environ Econ Policy Stud 22:433–448, 2020), they are not materially different for the purposes of setting optimal climate policy.

Suggested Citation

  • Kevin Dayaratna & Ross McKitrick, 2023. "Reply to comment on “climate sensitivity, agricultural productivity and the social cost of carbon in fund” by Philip Meyer," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 25(2), pages 291-298, April.
    • Handle: RePEc:spr:envpol:v:25:y:2023:i:2:d:10.1007_s10018-023-00364-2
    DOI: 10.1007/s10018-023-00364-2
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    References listed on IDEAS

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    1. Bev Dahlby & Ergete Ferede, 2018. "The Marginal Cost of Public Funds and the Laffer Curve: Evidence from the Canadian Provinces," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 74(2), pages 173-199, June.
    2. David Anthoff & Richard Tol, 2013. "The uncertainty about the social cost of carbon: A decomposition analysis using fund," Climatic Change, Springer, vol. 117(3), pages 515-530, April.
    3. Raphael Calel & David Stainforth & Simon Dietz, 2015. "Tall tales and fat tails: the science and economics of extreme warming," Climatic Change, Springer, vol. 132(1), pages 127-141, September.
    4. Kevin D. Dayaratna & Ross McKitrick & Patrick J. Michaels, 2020. "Climate sensitivity, agricultural productivity and the social cost of carbon in FUND," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 22(3), pages 433-448, July.
    5. David Anthoff & Richard Tol, 2013. "Erratum to: The uncertainty about the social cost of carbon: A decomposition analysis using fund," Climatic Change, Springer, vol. 121(2), pages 413-413, November.
    6. Ross McKitrick, 2013. "Encompassing tests of socioeconomic signals in surface climate data," Climatic Change, Springer, vol. 120(1), pages 95-107, September.
    7. Frances C. Moore & Uris Baldos & Thomas Hertel & Delavane Diaz, 2017. "New science of climate change impacts on agriculture implies higher social cost of carbon," Nature Communications, Nature, vol. 8(1), pages 1-9, December.
    8. Gerard Roe & Yoram Bauman, 2013. "Climate sensitivity: should the climate tail wag the policy dog?," Climatic Change, Springer, vol. 117(4), pages 647-662, April.
    9. A. J. Challinor & J. Watson & D. B. Lobell & S. M. Howden & D. R. Smith & N. Chhetri, 2014. "A meta-analysis of crop yield under climate change and adaptation," Nature Climate Change, Nature, vol. 4(4), pages 287-291, April.
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