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The Marginal Costs Of Carbon Dioxide Emissions: An Assessment Of The Uncertainties

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  • Richard S.J. Tol

    () (Economic and Social Research Institute, Dublin)

Abstract

88 estimates of the marginal costs of carbon dioxide emissions were gathered from 22 published studies and combined to form a probability density function. The uncertainty is strongly rightskewed. If all studies are combined, the mode is $5/tC, the mean $104/tC, and the 95 percentile $446/tC. Studies with a lower discount rate have higher estimates and a much greater uncertainties. Similarly, studies, which use equity weighing, have higher estimates and larger uncertainties. Interestingly, studies that are peer-reviewed have lower estimates and smaller uncertainties. Using standard assumptions about discounting and aggregation, the marginal costs of carbon dioxide emissions unlikely to exceed $50/tC, and probably much smaller.

Suggested Citation

  • 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.
  • Handle: RePEc:sgc:wpaper:19
    as

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    File URL: http://www.fnu.zmaw.de/fileadmin/fnu-files/publication/working-papers/margcostunc.pdf
    File Function: First version, 2003
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    References listed on IDEAS

    as
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    3. Azar, Christian & Sterner, Thomas, 1996. "Discounting and distributional considerations in the context of global warming," Ecological Economics, Elsevier, vol. 19(2), pages 169-184, November.
    4. Richard Tol, 2002. "Estimates of the Damage Costs of Climate Change, Part II. Dynamic Estimates," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(2), pages 135-160, February.
    5. Samuel Fankhauser & Richard Tol & DAVID Pearce, 1997. "The Aggregation of Climate Change Damages: a Welfare Theoretic Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 10(3), pages 249-266, October.
    6. Plambeck, Erica L & Hope, Chris, 1996. "PAGE95 : An updated valuation of the impacts of global warming," Energy Policy, Elsevier, vol. 24(9), pages 783-793, September.
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    8. Hope, Chris & Maul, Philip, 1996. "Valuing the impact of CO2 emissions," Energy Policy, Elsevier, vol. 24(3), pages 211-219, March.
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    12. Nordhaus, William D., 1993. "Rolling the 'DICE': an optimal transition path for controlling greenhouse gases," Resource and Energy Economics, Elsevier, vol. 15(1), pages 27-50, March.
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    Cited by:

    1. Saleemul Huq & Michael Grubb, 2007. "Preface," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 12(5), pages 645-649, June.
      • Michael Grubb, 2003. "Preface," Climate Policy, Taylor & Francis Journals, vol. 3(sup1), pages 1-1, November.
      • Michael Grubb, 2006. "Preface," Climate Policy, Taylor & Francis Journals, vol. 6(4), pages 349-350, July.
    2. Anthony Owen, 2006. "Nuclear Power for Australia?," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 13(3), pages 195-210.

    More about this item

    Keywords

    Emission Leakage; Agricultural Sector Model; Greenhouse Gas Policy; Mitigation; Carbon Sequestration;

    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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