Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26418 
Year of Publication: 
2008
Series/Report no.: 
CESifo Working Paper No. 2373
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Estimates of the marginal damage costs of carbon dioxide emissions require the aggregation of monetised impacts of climate change over people with different incomes and in different jurisdictions. Implicitly or explicitly, such estimates assume a social welfare function and hence a particular attitude towards equity and justice. We show that previous approaches to equity weighing are inappropriate from a national decision maker's point of view, because domestic impacts are not valued at domestic values. We propose four alternatives (sovereignty, altruism, good neighbour, and compensation) with different views on concern for and liability towards foreigners. The four alternatives imply radically estimates of the social cost of carbon and hence the optimal intensity of climate policy.
Subjects: 
Domestic climate policy
social cost of carbon
equity weights
JEL: 
Q54
Document Type: 
Working Paper
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