The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties

✍ Scribed by Richard S.J. Tol

• Publisher: Elsevier Science
• Year: 2005
• Tongue: English
• Weight: 377 KB
• Volume: 33
• Category: Article
• ISSN: 0301-4215
• DOI: 10.1016/j.enpol.2004.04.002

✦ Synopsis

One hundred and three estimates of the marginal damage costs of carbon dioxide emissions were gathered from 28 published studies and combined to form a probability density function. The uncertainty is strongly right-skewed. If all studies are combined, the mode is $2/tC, the median $14/tC, the mean $93/tC, and the 95 percentile $350/tC. Studies with a lower discount rate have higher estimates and much greater uncertainties. Similarly, studies that use equity weighing, have higher estimates and larger uncertainties. Interestingly, studies that are peer-reviewed have lower estimates and smaller uncertainties. Using standard assumptions about discounting and aggregation, the marginal damage costs of carbon dioxide emissions are unlikely to exceed $50/tC, and probably much smaller.