Does Unilateral Decarbonization Pay For Itself?

Adrien Bilal and Diego Känzig

No 33364, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper shows that unilateral decarbonization pays for itself in large economies. We estimate economic damages from global temperature shocks and combine them with a climate-economy model to construct Domestic Costs of Carbon: $226 per ton for the United States and $216 per ton for the European Union. When compared to marginal abatement costs, these values imply over 80% unilateral decarbonization for both economies, an order of magnitude larger than under conventional damages estimated based on local temperature.

JEL-codes: E01 E23 F18 O44 Q54 Q56 (search for similar items in EconPapers)
Date: 2025-01
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