Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/233103 
Year of Publication: 
2018
Citation: 
[Journal:] Ecological Economics [ISSN:] 0921-8009 [Volume:] 146 [Publisher:] Elsevier [Place:] Amsterdam [Year:] 2018 [Pages:] 520-535
Publisher: 
Elsevier, Amsterdam
Abstract: 
We explore how the intertemporal distribution of well-being affects the social cost of carbon. In contrast to the literature that studies parameters of a particular social welfare function, such as the discount rate, we shift the focus and directly assume a parametric form for the intertemporal distribution of well-being. This has the advantage of avoiding explicit discounting choices, which has initiated much debate. Specifically, we consider a set of intertemporal distributions that reach a pre-specified steady-state level of "sufficient" well-being, or equivalently, after a pre-specified "end-of-growth horizon". We numerically illustrate our results in DICE and find that the social cost of carbon increases over-proportionally with the sufficiency level of well-being. While the social cost of carbon in 2015 is US$ 7 if the sufficiency level is four-fold the present level, it is US$ 30 if the sufficiency level is 15-fold and US$ 100 if the sufficiency level is 26-fold the present level. This shows in a transparent way how conceptions of intergenerational distributive justice drive the social cost of carbon.
Subjects: 
climate change
social cost of carbon
optimal tax
DICE
optimal growth
sustainability
social welfare function
discounting
JEL: 
Q01
Q54
H21
C61
D31
D91
Published Version’s DOI: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)

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