IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Targets for Global Climate Policy: An Overview

  • Richard S.J. Tol

    ()

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

A survey of the economic impact of climate change and the marginal damage costs shows that carbon dioxide emissions are a negative externality. The estimated Pigou tax and its growth rate are too low to justify the climate policy targets set by political leaders. A lower discount rate or greater concern for the global distribution of income would justify more stringent climate policy, but would imply an overhaul of other public policy. Catastrophic risk justifies more stringent climate policy, but only to a limited extent.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sussex.ac.uk/economics/documents/wps37-2012-tol.pdf
Download Restriction: no

Paper provided by Department of Economics, University of Sussex in its series Working Paper Series with number 3712.

as
in new window

Length:
Date of creation: Aug 2012
Date of revision:
Handle: RePEc:sus:susewp:3712
Contact details of provider: Postal: Jubilee Building G08, Falmer, Brighton, BN1 9SL
Phone: +44 (0) 1273 678889
Fax: +44 (0)1273 873715
Web page: http://www.sussex.ac.uk/economics
Email:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. John Reilly, Marcus Sarofim, Sergey Paltsev and Ronald Prinn, 2006. "The Role of Non-CO2 GHGs in Climate Policy: Analysis Using the MIT IGSM," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 503-520.
  2. Richard Tol, 2002. "Estimates of the Damage Costs of Climate Change. Part 1: Benchmark Estimates," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 21(1), pages 47-73, January.
  3. Frederick van der Ploeg & Cees Withagen, 2011. "Too Much Coal, Too Little Oil," OxCarre Working Papers 056, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  4. Valentina Bosetti & Carlo Carraro & Marzio Galeotti & Emanuele Massetti & Massimo Tavoni, 2006. "WITCH. A World Induced Technical Change Hybrid Model," Working Papers 2006_46, Department of Economics, University of Venice "Ca' Foscari".
  5. Babiker, Mustafa H. & Metcalf, Gilbert E. & Reilly, John, 2003. "Tax distortions and global climate policy," Journal of Environmental Economics and Management, Elsevier, vol. 46(2), pages 269-287, September.
  6. Hope, Chris W., 2011. "The social cost of CO2 from the PAGE09 model," Economics Discussion Papers 2011-39, Kiel Institute for the World Economy.
  7. Robert S. Pindyck, 2010. "Fat Tails, Thin Tails, and Climate Change Policy," Working Papers 1012, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
  8. Robert Ayres & Jörg Walter, 1991. "The greenhouse effect: Damages, costs and abatement," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 1(3), pages 237-270, September.
  9. repec:cup:cbooks:9780521823869 is not listed on IDEAS
  10. Anthoff, David & Rose, Steven K. & Tol, Richard S. J. & Waldhoff, Stephanie, 2011. "The Time Evolution of the Social Cost of Carbon: An Application of FUND," Papers WP405, Economic and Social Research Institute (ESRI).
  11. Fischer, Carolyn & Morgenstern, Richard, 2003. "Carbon Abatement Costs: Why the Wide Range of Estimates?," Discussion Papers dp-03-42-rev, Resources For the Future.
  12. Maddison, David, 1995. "A cost-benefit analysis of slowing climate change," Energy Policy, Elsevier, vol. 23(4-5), pages 337-346.
  13. Simon Dietz & Geir B. Asheim, 2011. "Climate Policy under Sustainable Discounted Utilitarianism," CESifo Working Paper Series 3563, CESifo Group Munich.
  14. Klaus Keller & Kelvin Tan & Francois M.M. Morel & David F. Bradford, 2000. "Preserving the Ocean Circulation: Implications for Climate Policy," NBER Working Papers 7476, National Bureau of Economic Research, Inc.
  15. Malte Schwoon & Richard S.J. Tol, 2004. "Optimal CO2-abatement with socio-economic inertia and induced technological change," Working Papers FNU-37, Research unit Sustainability and Global Change, Hamburg University, revised Jan 2004.
  16. Martin L. Weitzman, 1998. "Gamma Discounting," Harvard Institute of Economic Research Working Papers 1843, Harvard - Institute of Economic Research.
  17. Marten, Alex L., 2011. "Transient temperature response modeling in IAMs: the effects of over simplification on the SCC," Economics Discussion Papers 2011-11, Kiel Institute for the World Economy.
  18. ALVAREZ-CUADRADO, Francisco & LONG, Ngo Van, 2007. "A Mixed Bentham-Rawls Criterion for Intergenerational Equity : Theory and Implications," Cahiers de recherche 06-2007, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  19. Weitzman, Martin L., 2012. "GHG Targets as Insurance Against Catastrophic Climate Damages," Scholarly Articles 11315435, Harvard University Department of Economics.
  20. 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.
  21. Pizer, William & Newell, Richard, 2000. "Discounting the Distant Future: How Much Do Uncertain Rates Increase Valuations?," Discussion Papers dp-00-45, Resources For the Future.
  22. John P. Weyant, 1993. "Costs of Reducing Global Carbon Emissions," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 27-46, Fall.
  23. Zuber, Stéphane & Asheim, Geir B., 2012. "Justifying social discounting: The rank-discounted utilitarian approach," Journal of Economic Theory, Elsevier, vol. 147(4), pages 1572-1601.
  24. Bohringer, Christoph & Hoffmann, Tim & Manrique-de-Lara-Penate, Casiano, 2006. "The efficiency costs of separating carbon markets under the EU emissions trading scheme: A quantitative assessment for Germany," Energy Economics, Elsevier, vol. 28(1), pages 44-61, January.
  25. de Zeeuw, Aart & Zemel, Amos, 2012. "Regime shifts and uncertainty in pollution control," Journal of Economic Dynamics and Control, Elsevier, vol. 36(7), pages 939-950.
  26. Fischer, Carolyn, 2004. "Emissions Pricing, Spillovers, and Public Investment in Environmentally Friendly Technologies," Discussion Papers dp-04-02, Resources For the Future.
  27. 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.
  28. Parry, Ian W. H., 1993. "Some estimates of the insurance value against climate change from reducing greenhouse gas emissions," Resource and Energy Economics, Elsevier, vol. 15(1), pages 99-115, March.
  29. Graciela Chichilnisky, 1996. "An axiomatic approach to sustainable development," Social Choice and Welfare, Springer, vol. 13(2), pages 231-257, April.
  30. Kelly, David L. & Kolstad, Charles D., 1999. "Malthus and Climate Change: Betting on a Stable Population," University of California at Santa Barbara, Economics Working Paper Series qt9ks625sk, Department of Economics, UC Santa Barbara.
  31. Carraro, Carlo & Siniscalco, Domenico, 1998. "International Institutions and Environmental Policy: International environmental agreements: Incentives and political economy1," European Economic Review, Elsevier, vol. 42(3-5), pages 561-572, May.
  32. 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.
  33. Gollier, Christian & Weitzman, Martin L., 2010. "How should the distant future be discounted when discount rates are uncertain?," Economics Letters, Elsevier, vol. 107(3), pages 350-353, June.
  34. Anthoff, David & Hepburn, Cameron & Tol, Richard S.J., 2009. "Equity weighting and the marginal damage costs of climate change," Ecological Economics, Elsevier, vol. 68(3), pages 836-849, January.
  35. Manne, Alan & Mendelsohn, Robert & Richels, Richard, 1995. "MERGE : A model for evaluating regional and global effects of GHG reduction policies," Energy Policy, Elsevier, vol. 23(1), pages 17-34, January.
  36. 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 920-37, July.
  37. Parry, Ian W. H. & Williams III, Roberton C., 1999. "A second-best evaluation of eight policy instruments to reduce carbon emissions," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 347-373, August.
  38. Carraro, Carlo & Siniscalco, Domenico, 1991. "Strategies for the International Protection of the Environment," CEPR Discussion Papers 568, C.E.P.R. Discussion Papers.
  39. Popp, David & Newell, Richard, 2012. "Where does energy R&D come from? Examining crowding out from energy R&D," Energy Economics, Elsevier, vol. 34(4), pages 980-991.
  40. 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.
  41. Asheim, Geir B. & Mitra, Tapan, 2010. "Sustainability and discounted utilitarianism in models of economic growth," Mathematical Social Sciences, Elsevier, vol. 59(2), pages 148-169, March.
  42. Christoph Böhringer & Henrike Koschel & Ulf Moslener, 2008. "Efficiency losses from overlapping regulation of EU carbon emissions," Journal of Regulatory Economics, Springer, vol. 33(3), pages 299-317, June.
  43. Michael Schauer, 1995. "Estimation of the greenhouse gas externality with uncertainty," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 5(1), pages 71-82, January.
  44. Martin L. Weitzman, 2009. "On Modeling and Interpreting the Economics of Catastrophic Climate Change," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 1-19, February.
  45. Kelly, David L. & Kolstad, Charles D., 1999. "Bayesian learning, growth, and pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 23(4), pages 491-518, February.
  46. Maddison, David & Rehdanz, Katrin, 2011. "The impact of climate on life satisfaction," Ecological Economics, Elsevier, vol. 70(12), pages 2437-2445.
  47. 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.
  48. Samuel Fankhauser & Richard Tol & DAVID Pearce, 1997. "The Aggregation of Climate Change Damages: a Welfare Theoretic Approach," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 10(3), pages 249-266, October.
  49. Haraden, John, 1992. "An improved shadow price for CO2," Energy, Elsevier, vol. 17(5), pages 419-426.
  50. Keller, Klaus & Bolker, Benjamin M. & Bradford, D.F.David F., 2004. "Uncertain climate thresholds and optimal economic growth," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 723-741, July.
  51. Gollier, Christian, 2002. "Discounting an uncertain future," Journal of Public Economics, Elsevier, vol. 85(2), pages 149-166, August.
  52. Tsur, Yacov & Zemel, Amos, 1996. "Accounting for global warming risks: Resource management under event uncertainty," Journal of Economic Dynamics and Control, Elsevier, vol. 20(6-7), pages 1289-1305.
  53. Waldhoff, Stephanie & Anthoff, David & Rose, Steven K. & Tol, Richard S. J., 2014. "The marginal damage costs of different greenhouse gases: An application of FUND," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 8, pages 1-33.
  54. Martin L. Weitzman, 2011. "Additive Damages, Fat-Tailed Climate Dynamics, and Uncertain Discounting," NBER Chapters, in: The Economics of Climate Change: Adaptations Past and Present, pages 23-46 National Bureau of Economic Research, Inc.
  55. Leahy, Eimear & Tol, Richard S. J., 2011. "Greener Homes: An Ex-Post Estimate of the Cost of Carbon Dioxide Emission Reduction using Administrative Micro-Data from the Republic of Ireland," Papers WP388, Economic and Social Research Institute (ESRI).
  56. Anthoff, David & Tol, Richard S. J. & Yohe, Gary W., 2009. "Discounting for Climate Change," Economics Discussion Papers 2009-15, Kiel Institute for the World Economy.
  57. Gerlagh, Reyer & van der Zwaan, Bob, 2003. "Gross world product and consumption in a global warming model with endogenous technological change," Resource and Energy Economics, Elsevier, vol. 25(1), pages 35-57, February.
  58. David Anthoff & Richard Tol, 2013. "The uncertainty about the social cost of carbon: A decomposition analysis using fund," Climatic Change, Springer, vol. 117(3), pages 515-530, April.
  59. Richard Tol, 2012. "On the Uncertainty About the Total Economic Impact of Climate Change," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 53(1), pages 97-116, September.
  60. Robert S. Pindyck, 2009. "Uncertain Outcomes and Climate Change Policy," NBER Working Papers 15259, National Bureau of Economic Research, Inc.
  61. John P. Weyant, Francisco C. de la Chesnaye, and Geoff J. Blanford, 2006. "Overview of EMF-21: Multigas Mitigation and Climate Policy," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 1-32.
  62. Anthoff, David & Tol, Richard S. J., 2011. "On International Equity Weights and National Decision Making on Climate Change," Papers RB2010/4/2, Economic and Social Research Institute (ESRI).
  63. Burtraw, Dallas & Krupnick, Alan & Palmer, Karen & Paul, Anthony & Toman, Michael & Bloyd, Cary, 2003. "Ancillary benefits of reduced air pollution in the US from moderate greenhouse gas mitigation policies in the electricity sector," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 650-673, May.
  64. Baranzini, Andrea & Chesney, Marc & Morisset, Jacques, 2003. "The impact of possible climate catastrophes on global warming policy," Energy Policy, Elsevier, vol. 31(8), pages 691-701, June.
  65. Valentina Bosetti & Carlo Carraro & Romain Duval & Massimo Tavoni, 2010. "What Should We Expect from Innovation? A Model-Based Assessment of the Environmental and Mitigation Cost Implications of Climate-Related R&D," Working Papers 2010.42, Fondazione Eni Enrico Mattei.
  66. Fischer, Carolyn & Newell, Richard, 2004. "Environmental and Technology Policies for Climate Mitigation," Discussion Papers dp-04-05, Resources For the Future.
  67. Haraden, John, 1993. "An updated shadow price for CO2," Energy, Elsevier, vol. 18(3), pages 303-307.
  68. 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.
  69. William D. Nordhaus, 1982. "How Fast Should We Graze the Global Commons?," Cowles Foundation Discussion Papers 615, Cowles Foundation for Research in Economics, Yale University.
  70. Hennlock, Magnus, 2009. "Robust Control in Global Warming Management: An Analytical Dynamic Integrated Assessment," Discussion Papers dp-09-19, Resources For the Future.
  71. Hope, Chris, 2008. "Discount rates, equity weights and the social cost of carbon," Energy Economics, Elsevier, vol. 30(3), pages 1011-1019, May.
  72. Goulder, Lawrence H. & Mathai, Koshy, 2000. "Optimal CO2 Abatement in the Presence of Induced Technological Change," Journal of Environmental Economics and Management, Elsevier, vol. 39(1), pages 1-38, January.
  73. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
  74. Kuik, Onno & Brander, Luke & Tol, Richard S.J., 2009. "Marginal abatement costs of greenhouse gas emissions: A meta-analysis," Energy Policy, Elsevier, vol. 37(4), pages 1395-1403, April.
  75. 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.
  76. Cropper, Maureen L & Aydede, Sema K & Portney, Paul R, 1992. "Rates of Time Preference for Saving Lives," American Economic Review, American Economic Association, vol. 82(2), pages 469-72, May.
  77. Kolstad, Charles D., 1996. "Learning and Stock Effects in Environmental Regulation: The Case of Greenhouse Gas Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 31(1), pages 1-18, July.
  78. Anthoff, David & Rose, Steven K. & Tol, Richard S. J. & Waldhoff, Stephanie, 2011. "Regional and Sectoral Estimates of the Social Cost of Carbon: An Application of FUND," Papers WP375, Economic and Social Research Institute (ESRI).
  79. Sandmo, Agnar, 2011. "Atmospheric externalities and environmental taxation," Energy Economics, Elsevier, vol. 33(S1), pages S4-S12.
  80. Yang, Zili, 2003. "Reevaluation and renegotiation of climate change coalitions--a sequential closed-loop game approach," Journal of Economic Dynamics and Control, Elsevier, vol. 27(9), pages 1563-1594, July.
  81. Hennlock, Magnus, 2009. "Robust Control in Global Warming Management: An Analytical Dynamic Integrated Assessment," Working Papers in Economics 354, University of Gothenburg, Department of Economics.
  82. Carraro, Carlo & Siniscalco, Domenico, 1992. "The international dimension of environmental policy," European Economic Review, Elsevier, vol. 36(2-3), pages 379-387, April.
  83. Jon Gjerde & Sverre Grepperud & Snorre Kverndokk, 1998. "Optimal Climate Policy under the Possibility of a Catastrophe," Discussion Papers 209, Research Department of Statistics Norway.
  84. Martin L. Weitzman, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 703-724, September.
  85. 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.
  86. Ceronsky, Megan & Anthoff, David & Hepburn, Cameron & Tol, Richard S. J., 2011. "Checking the Price Tag on Catastrophe: The Social Cost of Carbon Under Non-linear Climate Response," Papers WP392, Economic and Social Research Institute (ESRI).
  87. Babiker, Mustafa H., 2001. "The CO2 abatement game: Costs, incentives, and the enforceability of a sub-global coalition," Journal of Economic Dynamics and Control, Elsevier, vol. 25(1-2), pages 1-34, January.
  88. J. E. Stiglitz, 1999. "Introduction," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 28(3), pages 249-254, November.
  89. Gollier, Christian, 2002. "Time Horizon and the Discount Rate," Journal of Economic Theory, Elsevier, vol. 107(2), pages 463-473, December.
  90. Böhringer, Christoph & Löschel, Andreas & Rutherford, Thomas F., 2004. "Efficiency Gains from "What"-Flexibility in Climate Policy: An Integrated CGE Assessment," ZEW Discussion Papers 04-48, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  91. William D. Nordhaus, 2011. "The Economics of Tail Events with an Application to Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 5(2), pages 240-257, Summer.
  92. Richard S.J. Tol, 2002. "Emission Abatement Versus Development As Strategies To Reduce Vulnerability To Climate Change: An Application Of Fund," Working Papers FNU-12, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2002.
  93. Weyant, John P., 2004. "Introduction and overview," Energy Economics, Elsevier, vol. 26(4), pages 501-515, July.
  94. Steve Newbold & Charles Griffiths & Christopher C. Moore & Ann Wolverton & Elizabeth Kopits, 2010. "The "Social Cost of Carbon" Made Simple," NCEE Working Paper Series 201007, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2010.
  95. Richard S. J. Tol, 1999. "The Marginal Costs of Greenhouse Gas Emissions," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 61-81.
  96. Manne, Alan & Richels, Richard, 2004. "US rejection of the Kyoto Protocol: the impact on compliance costs and CO2 emissions," Energy Policy, Elsevier, vol. 32(4), pages 447-454, March.
  97. Fankhauser, Samuel & Tol, Richard S.J. & Pearce, David W., 1998. "Extensions and alternatives to climate change impact valuation: on the critique of IPCC Working Group III's impact estimates," Environment and Development Economics, Cambridge University Press, vol. 3(01), pages 59-81, February.
  98. P. Michael Link & Richard S.J. Tol, 2004. "Possible Economic Impacts of a Shutdown of the Thermohaline Circulation: an Application of FUND," Working Papers FNU-42, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2004.
  99. Van Liedekerke, Luc & Lauwers, Luc, 1997. "Sacrificing the Patrol: Utilitarianism, Future Generations and Infinity," Economics and Philosophy, Cambridge University Press, vol. 13(02), pages 159-174, October.
  100. Richard Tol, 2002. "Estimates of the Damage Costs of Climate Change, Part II. Dynamic Estimates," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 21(2), pages 135-160, February.
  101. Norman Henderson & Ian Bateman, 1995. "Empirical and public choice evidence for hyperbolic social discount rates and the implications for intergenerational discounting," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 5(4), pages 413-423, June.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:sus:susewp:3712. 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: (Russell Eke)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.