Recalculating the Social Cost of Carbon

Soheil Shayegh, Valentina Bosetti, Simon Dietz, Johannes Emmerling, Christoph Hambel, Svenn Jensen, Holger Kraft, Massimo Tavoni (), Christian Traeger and Frederick (Rick) van der Ploeg
Additional contact information
Simon Dietz: London School of Economics
Christoph Hambel: Goethe University Frankfurt
Holger Kraft: Goethe University Frankfurt
Christian Traeger: University of Oslo and University of California Berkeley

No 2018.19, Working Papers from Fondazione Eni Enrico Mattei

Abstract: Over the last few decades, integrated assessment models (IAM) have provided insight into the relationship between climate change, economy, and climate policies. The limitations of these models in capturing uncertainty in climate parameters, heterogeneity in damages and policies, have given rise to skepticism about the relevance of these models for policy making. IAM community needs to respond to these critics and to the new challenges posed by developments in the policy arena. New climate targets emerging from the Paris Agreement and the uncertainty about the signatories’ commitment to Nationally Determined Contributions (NDCs) are prime examples of challenges that need to be addressed in the next generation of IAMs. Given these challenges, calculating the social cost of carbon requires a new framework. This can be done by computing marginal abatement cost in cost-effective settings which provides different results than those calculated using constrained cost-benefit analysis. Here we focus on the areas where IAMs can be deployed to asses uncertainty and risk management, learning, and regional heterogeneity in climate change impacts.

Keywords: Integrated Assessment Models; Climate Policy; Carbon; Uncertainty (search for similar items in EconPapers)
JEL-codes: Q54 (search for similar items in EconPapers)
Date: 2018-05
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env and nep-res
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Citations: View citations in EconPapers (2)

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Working Paper: Recalculating the Social Cost of Carbon (2018)
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