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Checking the Price Tag on Catastrophe: The Social Cost of Carbon Under Non-linear Climate Response

Megan Ceronsky, David Anthoff (), Cameron Hepburn () and Richard Tol ()

No WP392, Papers from Economic and Social Research Institute (ESRI)

Abstract: Research into the social cost of carbon emissions — the marginal social damage from a tonne of emitted carbon ? has tended to focus on "best guess" scenarios. Such scenarios generally ignore the potential for low-probability, high-damage events, which are critically important to determining optimal climate policy. This paper uses the FUND integrated assessment model to investigate the influence of three types of low-probability, high-impact climate responses on the social cost of carbon: the collapse of the Atlantic Ocean Meridional Overturning Circulation; large scale dissociation of oceanic methane hydrates; and climate sensitivities above "best guess" levels. We find that incorporating these events can increase the social cost of carbon by a factor of over 3.

Keywords: Social; cost; of; carbon/cost/scenarios/Climate; policy/Policy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-env
Date: 2011-06
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Working Paper: CHECKING THE PRICE TAG ON CATASTROPHE: THE SOCIAL COST OF CARBON UNDER NON-LINEAR CLIMATE RESPONSE (2005) Downloads
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