Priority for the Worse Off and the Social Cost of Carbon

Matthew Adler, David Anthoff (), Valentina Bosetti, Greg Garner, Klaus Keller and Nicolas Treich

No 244334, MITP: Mitigation, Innovation and Transformation Pathways from Fondazione Eni Enrico Mattei (FEEM)

Abstract: The social cost of carbon (SCC) is a monetary measure of the harms from carbon emission. Specifically, it is the reduction in current consumption that produces a loss in social welfare equivalent to that caused by the emission of a ton of CO2. The standard approach is to calculate the SCC using a discounted-utilitarian social welfare function (SWF)—one that simply adds up the well-being numbers (utilities) of individuals, as discounted by a weighting factor that decreases with time. The discounted-utilitarian SWF has been criticized both for ignoring the distribution of well-being, and for including an arbitrary preference for earlier generations. Here, we use a prioritarian SWF, with no time-discount factor, to calculate the SCC in the integrated assessment model RICE. Prioritarianism is a well-developed concept in ethics and theoretical welfare economics, but has been, thus far, little used in climate scholarship. The core idea is to give greater weight to well-being changes affecting worse off individuals. We find substantial differences between the discounted-utilitarian and non-discounted prioritarian SCC.

Keywords: Resource/Energy; Economics; and; Policy (search for similar items in EconPapers)
Pages: 32
Date: 2016-08-30
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-sog
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Priority for the worse-off and the social cost of carbon (2017)
Working Paper: Priority for the Worse Off and the Social Cost of Carbon (2016)
Working Paper: Priority for the Worse Off and the Social Cost of Carbon (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemmi:244334

DOI: 10.22004/ag.econ.244334

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