Does Unilateral Decarbonization Pay for Itself?

Adrien Bilal and Diego R. Känzig

AEA Papers and Proceedings, 2025, vol. 115, 369-73

Abstract: This paper shows that unilateral decarbonization pays for itself in large economies. We estimate economic damages based on 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 percent unilateral decarbonization for both economies, an order of magnitude more than under conventional damages estimated with local temperature shocks.

JEL-codes: L94 L98 Q41 Q48 Q54 Q58 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1257/pandp.20251035

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