IDEAS home Printed from https://ideas.repec.org/p/sus/susewp/0219.html
   My bibliography  Save this paper

A social cost of carbon for (almost) every country

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: https://www.sussex.ac.uk/webteam/gateway/file.php?name=wps-02-2019.pdf&site=24
    Download Restriction: no

    References listed on IDEAS

    as
    1. Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-937, July.
    2. Maddison, David & Rehdanz, Katrin, 2011. "The impact of climate on life satisfaction," Ecological Economics, Elsevier, vol. 70(12), pages 2437-2445.
    3. Maddison, David, 2003. "The amenity value of the climate: the household production function approach," Resource and Energy Economics, Elsevier, vol. 25(2), pages 155-175, May.
    4. Bosello, Francesco & Eboli, Fabio & Pierfederici, Roberta, 2012. "Assessing the Economic Impacts of Climate Change. An Updated CGE Point of View," Climate Change and Sustainable Development 121700, Fondazione Eni Enrico Mattei (FEEM).
    5. Anthony Heyes & Dylan Morgan & Nicholas Rivers, 2013. "The Use of a Social Cost of Carbon in Canadian Cost-Benefit Analysis," Canadian Public Policy, University of Toronto Press, vol. 39(s2), pages 67-80, August.
    6. repec:kap:enreec:v:73:y:2019:i:1:d:10.1007_s10640-018-0262-8 is not listed on IDEAS
    7. Rehdanz, Katrin & Maddison, David, 2005. "Climate and happiness," Ecological Economics, Elsevier, vol. 52(1), pages 111-125, January.
      • Katrin Rehdanz & David J. Maddison, 2003. "Climate and Happiness," Working Papers FNU-20, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2003.
    8. Simon Dietz & Nicholas Stern, 2015. "Endogenous Growth, Convexity of Damage and Climate Risk: How Nordhaus' Framework Supports Deep Cuts in Carbon Emissions," Economic Journal, Royal Economic Society, vol. 0(583), pages 574-620, March.
    9. Roberto Roson & Dominique Van der Mensbrugghe, 2012. "Climate change and economic growth: impacts and interactions," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 4(3), pages 270-285.
    10. Havranek, Tomas & Irsova, Zuzana & Janda, Karel & Zilberman, David, 2015. "Selective reporting and the social cost of carbon," Energy Economics, Elsevier, vol. 51(C), pages 394-406.
    11. Marco Letta & Richard S. J. Tol, 2019. "Weather, Climate and Total Factor Productivity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(1), pages 283-305, May.
    12. Tol, Richard S.J., 2013. "Targets for global climate policy: An overview," Journal of Economic Dynamics and Control, Elsevier, vol. 37(5), pages 911-928.
    13. Kenneth J. Arrow & Maureen L. Cropper & Christian Gollier & Ben Groom & Geoffrey M. Heal & Richard G. Newell & William D. Nordhaus & Robert S. Pindyck & William A. Pizer & Paul R. Portney & Thomas Ste, 2014. "Editor's Choice Should Governments Use a Declining Discount Rate in Project Analysis?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(2), pages 145-163.
    14. 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.
    15. Nordhaus, William, 1982. "How Fast Should We Graze the Global Commons?," American Economic Review, American Economic Association, vol. 72(2), pages 242-246, May.
    16. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2014. "What Do We Learn from the Weather? The New Climate-Economy Literature," Journal of Economic Literature, American Economic Association, vol. 52(3), pages 740-798, September.
    17. Céline Guivarch & A. Méjean, & Antonin Pottier & Marc Fleurbaey, 2016. "Social cost of carbon: Global duty," Post-Print hal-01448544, HAL.
    18. Dietz, Simon & Stern, Nicholas, 2015. "Endogenous growth, convexity of damage and climate risk: how Nordhaus’ framework supports deep cuts in carbon emissions," LSE Research Online Documents on Economics 58406, London School of Economics and Political Science, LSE Library.
    19. repec:hrv:faseco:33373349 is not listed on IDEAS
    20. Arrow, K. & Cropper, M. & Gollier, C. & Groom, B. & Heal, G. & Newell, R. & Nordhaus, W. & Pindyck, R. & Pizer, W. & Portney, P. & Sterner, T. & Tol, R. S. J. & Weitzman, Martin L., 2013. "Determining Benefits and Costs for Future Generations," Scholarly Articles 12841963, Harvard University Department of Economics.
    21. Cass R. Sunstein, 2014. "On Not Revisiting Official Discount Rates: Institutional Inertia and the Social Cost of Carbon," American Economic Review, American Economic Association, vol. 104(5), pages 547-551, May.
    22. repec:oup:renvpo:v:11:y:2017:i:1:p:80-99. is not listed on IDEAS
    23. Richard Tol, 2002. "Estimates of the Damage Costs of Climate Change. Part 1: Benchmark Estimates," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(1), pages 47-73, January.
    24. Richard S. J. Tol, 2009. "The Economic Effects of Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 29-51, Spring.
    25. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2012. "Temperature Shocks and Economic Growth: Evidence from the Last Half Century," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 66-95, July.
    26. repec:kap:enreec:v:68:y:2017:i:1:d:10.1007_s10640-017-0166-z is not listed on IDEAS
    27. Francesco Bosello & Fabio Eboli & Roberta Pierfederici, 2012. "Assessing the Economic Impacts of Climate Change," Review of Environment, Energy and Economics - Re3, Fondazione Eni Enrico Mattei, February.
    28. repec:bla:econom:v:84:y:2017:i:335:p:345-364 is not listed on IDEAS
    29. Robert W. Hahn & Robert A. Ritz, 2015. "Does the Social Cost of Carbon Matter? Evidence from US Policy," The Journal of Legal Studies, University of Chicago Press, vol. 44(1), pages 229-248.
    30. repec:oup:renvpo:v:11:y:2017:i:1:p:100-114. is not listed on IDEAS
    31. Robert S. Pindyck, 2017. "The Use and Misuse of Models for Climate Policy," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 11(1), pages 100-114.
    32. Elisabeth J. Moyer & Mark D. Woolley & Nathan J. Matteson & Michael J. Glotter & David A. Weisbach, 2014. "Climate Impacts on Economic Growth as Drivers of Uncertainty in the Social Cost of Carbon," The Journal of Legal Studies, University of Chicago Press, vol. 43(2), pages 401-425.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    climate change; Pigou tax; climate policy; non-cooperation;

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sus:susewp:0219. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (University of Sussex Business School Communications Team). General contact details of provider: http://edirc.repec.org/data/ecsusuk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.