Journal
ENERGY POLICY
Volume 33, Issue 16, Pages 2064-2074Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.enpol.2004.04.002
Keywords
climate change; carbon dioxide; marginal damage costs
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One hundred and three estimates of the marginal damage costs of carbon dioxide emissions were gathered from 28 published studies and combined to form a probability density function. The uncertainty is strongly right-skewed. If all studies are combined, the mode is $2/tC, the median $14/tC, the mean $93/tC, and the 95 percentile $350/tC. Studies with a lower discount rate have higher estimates and much greater uncertainties. Similarly, studies that use equity weighing, have higher estimates and larger uncertainties. Interestingly, studies that are peer-reviewed have lower estimates and smaller uncertainties. Using standard assumptions about discounting and aggregation, the marginal damage costs of carbon dioxide emissions are unlikely to exceed $50/tC, and probably much smaller. (c) 2004 Elsevier Ltd. All rights reserved.
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