Reply to comment on “climate sensitivity, agricultural productivity and the social cost of carbon in fund” by Philip Meyer

Kevin Dayaratna and Ross McKitrick
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Kevin Dayaratna: Heritage Foundation

Environmental Economics and Policy Studies, 2023, vol. 25, issue 2, No 7, 298 pages

Abstract: Abstract Meyer (Environ Econ Policy Stud, 2022) questions a number of assumptions behind the social cost of carbon (SCC) calculations in Dayaratna et al. (Environ Econ Policy Stud 22:433–448, 2020), especially the CO2 fertilization benefit and the climate sensitivity estimate. He recommends against increasing the CO2 effect and suggests applying a recent climate sensitivity estimate in Lewis, Clim Dyn (2022), but did not calculate the resulting SCC distribution. Herein we critically assess his recommendations and compute the SCC distribution they imply. It has a median SCC value in 2050 of $3.39 and implies a 33.4 percent probability of the optimal carbon tax being negative. While a bit higher than the results in Dayaratna et al. (Environ Econ Policy Stud 22:433–448, 2020), they are not materially different for the purposes of setting optimal climate policy.

Keywords: Agriculture; Climate sensitivity; CO2 fertilization; Integrated Assessment Modeling; Social cost of carbon (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s10018-023-00364-2

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