The marginal damage costs of carbon dioxide emissions: An assessment of the uncertainties

Tol, Richard S J (2005) The marginal damage costs of carbon dioxide emissions: An assessment of the uncertainties. Energy Policy, 33 (16). pp. 2064-2074. ISSN 0301-4215

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Abstract

One hundred and three estimates of the marginal damage costs of carbon dioxide emissions were gathered from 28 published studies and combined to form a probability density function. The uncertainty is strongly right-skewed. If all studies are combined, the mode is $2/tC, the median $14/tC, the mean $93/tC, and the 95 percentile $350/tC. Studies with a lower discount rate have higher estimates and much greater uncertainties. Similarly, studies that 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 damage costs of carbon dioxide emissions are unlikely to exceed $50/tC, and probably much smaller.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences > GE170 Environmental policy
H Social Sciences > HB Economic theory. Demography
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Depositing User: Richard Tol
Date Deposited: 18 Apr 2012 08:18
Last Modified: 18 Apr 2012 08:18
URI: http://sro.sussex.ac.uk/id/eprint/38344
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