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The Social Cost of Carbon

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  • Tol, Richard S. J.

Abstract

This paper surveys the literature on the economic impact of climate change. Different methods have been used to estimate the impact of climate change on human welfare. Studies agree that there are positive and negative impacts. In the short term, positive impacts may dominate, but these are largely sunk. In the longer term, there are net negative impacts. Poorer people tend to be more vulnerable to climate change. There is a trade-off between development policy and climate policy. Estimated aggregate impacts are not very large, but they are uncertain and incomplete. Estimates of the marginal impacts suggest that greenhouse gas emissions should be taxed, and that the emission reduction targets announced by politicians are probably too ambitious.

Suggested Citation

  • Tol, Richard S. J., 2011. "The Social Cost of Carbon," Papers WP377, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp377
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    References listed on IDEAS

    as
    1. van den Bergh, Jeroen C. J. M., 2004. "Optimal climate policy is a utopia: from quantitative to qualitative cost-benefit analysis," Ecological Economics, Elsevier, vol. 48(4), pages 385-393, April.
    2. G. C. van Kooten, 2004. "Climate Change Economics," Books, Edward Elgar Publishing, number 3424.
    3. Minh Ha-Duong & Nicolas Treich, 2004. "Risk Aversion, Intergenerational Equity and Climate Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 28(2), pages 195-207, June.
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    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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