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Further Comment On "A Rapid Assessment Model For Understanding The Social Cost Of Carbon"

Author

Listed:
  • STEPHEN C. NEWBOLD

    (US EPA, National Center for Environmental Economics, EPA West Building, 1301 Constitution Avenue NW, Washington, DC 20460, USA)

  • CHARLES GRIFFITHS

    (US EPA, National Center for Environmental Economics, EPA West Building, 1301 Constitution Avenue NW, Washington, DC 20460, USA)

  • CHRIS MOORE

    (US EPA, National Center for Environmental Economics, EPA West Building, 1301 Constitution Avenue NW, Washington, DC 20460, USA)

  • ANN WOLVERTON

    (US EPA, National Center for Environmental Economics, EPA West Building, 1301 Constitution Avenue NW, Washington, DC 20460, USA)

  • ELIZABETH KOPITS

    (US EPA, National Center for Environmental Economics, EPA West Building, 1301 Constitution Avenue NW, Washington, DC 20460, USA)

Abstract

In this reply to the comment by Gerlagh, we confirm an error in our estimate of the certainty-equivalent social cost of carbon (SCC) reported in Newboldet al.(2013), and we discuss the underlying conceptual difficulties that arise in conducting a social welfare analysis when preferences are heterogeneous or uncertain. The certainty-equivalent SCC depends crucially on the reference level of per capita consumption used to normalize marginal utility across possible preference parameters, and our estimate of the certainty-equivalent SCC was driven largely by an arbitrary choice of measurement units. All other results from our rapid assessment model are based on the deterministic SCC or its simulated probability distribution, which does not depend on the reference level of per capita consumption.

Suggested Citation

  • Stephen C. Newbold & Charles Griffiths & Chris Moore & Ann Wolverton & Elizabeth Kopits, 2014. "Further Comment On "A Rapid Assessment Model For Understanding The Social Cost Of Carbon"," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 5(02), pages 1-6.
    • Handle: RePEc:wsi:ccexxx:v:05:y:2014:i:02:n:s2010007814500055
    DOI: 10.1142/S2010007814500055
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