Priority for the Worse Off and the Social Cost of Carbon

Matthew Adler, David Anthoff (), Valentina Bosetti, Greg Garner, Klaus Keller and Nicolas Treich

No 6032, CESifo Working Paper Series from CESifo

Abstract: The social cost of carbon (SCC) is a monetary measure of the harms from carbon emission. Specifically, it is the reduction in current consumption that produces a loss in social welfare equivalent to that caused by the emission of a ton of CO2. The standard approach is to calculate the SCC using a discounted-utilitarian social welfare function (SWF)—one that simply adds up the well-being numbers (utilities) of individuals, as discounted by a weighting factor that decreases with time. The discounted-utilitarian SWF has been criticized both for ignoring the distribution of well-being, and for including an arbitrary preference for earlier generations. Here, we use a prioritarian SWF, with no time-discount factor, to calculate the SCC in the integrated assessment model RICE. Prioritarianism is a well-developed concept in ethics and theoretical welfare economics, but has been, thus far, little used in climate scholarship. The core idea is to give greater weight to well-being changes affecting worse off individuals. We find substantial differences between the discounted-utilitarian and non-discounted prioritarian SCC.

Keywords: social cost of carbon; climate change; prioritarianism; integrated assessment model; welfare economics (search for similar items in EconPapers)
JEL-codes: Q54 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Priority for the worse-off and the social cost of carbon (2017)
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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