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Title:What social cost of carbon? A mapping of the climate debate PDF Logo
Authors:Perrissin Fabert, Baptiste
Dumas, Patrice
Hourcade, Jean-Charles
Issue Date:2012
Series/Report no.:Nota di lavoro, Fondazione Eni Enrico Mattei: Climate Change and Sustainable Development 34.2012
Abstract:Given disparate beliefs about economic growth, technical change and damage caused by climate change, this paper starts with the seeming impossibility of determining a unique time profile of the social costs of carbon as a benchmark for climate negotiations and for infrastructure decisions that need to be made now in the absence of an inclusive international accord on climate policies. The paper demonstrates that determining a workable range of the social costs of carbon is however possible in a sequential decision-making framework that permits revising initial decisions in the light of new information. To do so, the paper exploits the results of a stochastic optimal control model run for more than 2000 scenarios that represent the set of beliefs presented about key uncertain parameters in the literature. The paper provides a heuristic mapping of the climate debate in the form of six clubs of opinions and shows the possibility of determining a range of social costs of carbon that might permit a compromise between the maximum range of clubs and those most likely to emerge in the future.
Subjects:Optimal control
Mitigation
Social Cost of Carbon
Uncertainty
JEL:Q54
Q21
O41
D81
Document Type:Working Paper
Appears in Collections:FEEM Working Papers, Fondazione Eni Enrico Mattei

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