Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/145067
Authors: 
Adler, Matthew
Anthoff, David
Bosetti, Valentina
Garner, Greg
Keller, Klaus
Treich, Nicolas
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper 6032
Abstract: 
The social cost of carbon (SCC) is a monetary measure of the harms from carbon emission. Specifically, it is the reduction in current consumption that produces a loss in social welfare equivalent to that caused by the emission of a ton of CO2. The standard approach is to calculate the SCC using a discounted-utilitarian social welfare function (SWF)—one that simply adds up the well-being numbers (utilities) of individuals, as discounted by a weighting factor that decreases with time. The discounted-utilitarian SWF has been criticized both for ignoring the distribution of well-being, and for including an arbitrary preference for earlier generations. Here, we use a prioritarian SWF, with no time-discount factor, to calculate the SCC in the integrated assessment model RICE. Prioritarianism is a well-developed concept in ethics and theoretical welfare economics, but has been, thus far, little used in climate scholarship. The core idea is to give greater weight to well-being changes affecting worse off individuals. We find substantial differences between the discounted-utilitarian and non-discounted prioritarian SCC.
Subjects: 
social cost of carbon
climate change
prioritarianism
integrated assessment model
welfare economics
JEL: 
Q54
Document Type: 
Working Paper

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