THE MARGINAL COSTS OF CARBON DIOXIDE EMISSIONS: AN ASSESSMENT OF THE UNCERTAINTIES

Richard S.J. Tol ()

No FNU-19, Working Papers from Research unit Sustainability and Global Change, Hamburg University

Abstract: 88 estimates of the marginal costs of carbon dioxide emissions were gathered from 22 published studies and combined to form a probability density function. The uncertainty is strongly rightskewed. If all studies are combined, the mode is $5/tC, the mean $104/tC, and the 95 percentile $446/tC. Studies with a lower discount rate have higher estimates and a much greater uncertainties. Similarly, studies, which 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 costs of carbon dioxide emissions unlikely to exceed $50/tC, and probably much smaller.

Keywords: Emission Leakage; Agricultural Sector Model; Greenhouse Gas Policy; Mitigation; Carbon Sequestration (search for similar items in EconPapers)
JEL-codes: Q54 (search for similar items in EconPapers)
Date: 2003-04, Revised 2003-04
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Published, Energy Policy, 33 (16), 2064-2074

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Persistent link: http://EconPapers.repec.org/RePEc:sgc:wpaper:19

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