The damage costs of climate change: a note on tangibles and intangibles, applied to DICE

Tol, Richard S J (1994) The damage costs of climate change: a note on tangibles and intangibles, applied to DICE. Energy Policy, 22 (5). pp. 436-438. ISSN 0301-4215

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Abstract

Economic cost-benefit analysis of the costs of greenhouse gas emission abatement and climate change often points towards limited abatement. This note elucidates one reason why this result is obtained: the way in which the intangible damages are treated and the utility function is specified. On the basis of the DICE model, it is shown that by putting the intangible damages directly into the utility function, and by assuming them to grow with per capita income, the optimal reduction increases, and in the second case more than triples, compared to Nordhaus's original results.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: G Geography. Anthropology. Recreation > GE Environmental Sciences
H Social Sciences > HB Economic theory. Demography
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Depositing User: Richard Tol
Date Deposited: 23 Apr 2012 12:39
Last Modified: 30 Nov 2012 17:12
URI: http://sro.sussex.ac.uk/id/eprint/38416
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