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| Title: | | Risk Aversion, time preference, and the social cost of carbon  |
| Authors: | | Anthoff, David Tol, Richard S. J. Yohe, Gary W. |
| Issue Date: | | 2008 |
| Series/Report no.: | | ESRI working paper 252 |
| Abstract: | | The Stern Review reported a social cost of carbon of over $300/tC, calling for ambitious climate policy. We here conduct a systematic sensitivity analysis of this result on two crucial parameters: the rate of pure time preference, and the rate of risk aversion. We show that the social cost of carbon lies anywhere in between 0 and $120,000/tC. However, if we restrict these two parameters to match observed behavior, an expected social cost of carbon of $60/tC results. If we correct this estimate for income differences across the world, the social cost of carbon rises to over $200/tC. |
| Document Type: | | Working Paper |
| Appears in Collections: | | ESRI Working Papers, The Economic and Social Research Institute (ESRI)
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