Priority for the worse-off and the social cost of carbon

Matthew Adler (), David Anthoff, Valentina Bosetti, Greg Garner, Klaus Keller and Nicolas Treich
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Matthew Adler: Duke University School of Law
David Anthoff: Energy and Resources Group, University of California
Greg Garner: Earth and Environmental Systems Institute, The Pennsylvania State University, University Park
Klaus Keller: Earth and Environmental Systems Institute, The Pennsylvania State University, University Park

Nature Climate Change, 2017, vol. 7, issue 6, 443-449

Abstract: Abstract The social cost of carbon (SCC) is a key tool in climate policy. The SCC expresses in monetary terms the social impact of the emission of a ton of CO2 in a given year. The SCC is calculated using a ‘social welfare function’ (SWF): a method for assessing social welfare. The dominant SWF in climate policy is the discounted-utilitarian SWF. Individuals’ well-being numbers (utilities) are summed, and the values for later generations are reduced (‘discounted’). This SWF has been criticized for ignoring the distribution of well-being and including an arbitrary time preference. Here, we use a ‘prioritarian’ SWF, with no time discount, to calculate the SCC. This SWF gives extra weight (‘priority’) to worse-off individuals. Prioritarianism is a well-developed concept in ethics and welfare economics, but has been rarely used in climate scholarship. We find substantial differences between the discounted-utilitarian and non-discounted prioritarian SCCs.

Date: 2017
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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)
Working Paper: Priority for the Worse Off and the Social Cost of Carbon (2016)
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DOI: 10.1038/nclimate3298

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