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A social cost of carbon for (almost) every country

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  • Richard S.J. Tol

    () (Department of Economics, University of Sussex, Brighton, UK
    Institute for Environmental Studies, Vrije Universiteit, Amsterdam
    Department of Spatial Economics, Vrije Universiteit, Amsterdam
    Tinbergen Institute, Amsterdam)

Abstract

This paper uses imputed national climate change impact functions to estimate national social costs of carbon, which are largest in poor countries with large populations. The national social costs of carbon of faster growing economies are less sensitive to the pure rate of time preference and more sensitive to the rate of risk aversion. The pattern of national social costs of carbon is not sensitive to the assumed impact function, climate sensitivity, and scenario, although the global social cost of carbon is. Income convergence raises the national social costs of carbon of poorer countries, and lowers them for richer countries. Both global and national social costs of carbon are most sensitive to the income elasticity of climate change impacts.

Suggested Citation

  • Richard S.J. Tol, 2019. "A social cost of carbon for (almost) every country," Working Paper Series 0219, Department of Economics, University of Sussex Business School.
  • Handle: RePEc:sus:susewp:0219
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    8. Lomborg, Bjorn, 2020. "Welfare in the 21st century: Increasing development, reducing inequality, the impact of climate change, and the cost of climate policies," Technological Forecasting and Social Change, Elsevier, vol. 156(C).
    9. Rickels, Wilfried & Quaas, Martin F. & Ricke, Katharine & Quaas, Johannes & Moreno-Cruz, Juan & Smulders, Sjak, 2020. "Who turns the global thermostat and by how much?," Energy Economics, Elsevier, vol. 91(C).
    10. Thirupathi Rao & Siti Indati Mustapa, 2020. "A Review of Climate Economic Models in Malaysia," Sustainability, MDPI, Open Access Journal, vol. 13(1), pages 1-20, December.
    11. Signe Krogstrup & William Oman, 2019. "Macroeconomic and Financial Policies for Climate Change Mitigation: A Review of the Literature," IMF Working Papers 2019/185, International Monetary Fund.
    12. Mardones, Cristian & Mena, Camilo, 2020. "Effects of the internalization of the social cost of global and local air pollutants in Chile," Energy Policy, Elsevier, vol. 147(C).
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    Keywords

    climate change; Pigou tax; climate policy; non-cooperation;
    All these keywords.

    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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