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By its nature, the so-called social cost of carbon (SCC(t)) will likely not cover the cost induced by climate change (damage cost and abatement cost) if it is used as a CO$_2$-price. It is a marginal price only. We define an implied…
Climate mitigation decisions today affect future generations, raising questions of intergenerational equity. Integrated assessment models (IAMs) rely on discounting to evaluate long-term policy costs and benefits. Using the DICE model, we…
We investigate optimal carbon abatement in a dynamic general equilibrium climate-economy model with endogenous structural change. By differentiating the production of investment from consumption, we show that social cost of carbon can be…
Social cost of carbon (SCC) is estimated by integrated assessment models (IAM) and is widely used by government agencies to value climate policy impacts. While there is an ongoing debate about obtained numerical estimates and related…
Preference heterogeneity massively increases the social cost of carbon. We call this the Weitzman premium. Uncertainty about an exponential discount rate implies a hyperbolic discount rate, which in the near term is equal to the average…
Assessing the costs of climate change is essential to finding efficient pathways for the transition to a net-zero emissions economy, which is necessary to stabilise global temperatures at any level. In evaluating the benefits and costs of…
Emissions pathways used in climate policy analysis are often derived from integrated assessment models. However, such emissions pathways do not typically include climate feedbacks on socioeconomic systems and by extension do not consider…
We examine a green transition policy involving a tax on brown goods in an economy where preferences for green consumption consist of a constant intrinsic individual component and an evolving social component. We analyse equilibrium dynamics…
To analyze climate change mitigation strategies, economists rely on simplified climate models - climate emulators. We propose a generic and transparent calibration and evaluation strategy for these climate emulators that is based on Coupled…
In this paper, we compare different mitigation policies when housing investments are irreversible. We use a general equilibrium model with non-homothetic preferences and an elaborate setup of the residential housing and energy production…
An updated and extended meta-analysis confirms that the central estimate of the social cost of carbon is around $200/tC with a large, right-skewed uncertainty and trending up. The pure rate of time preference and the inverse of the…
An increasing share of consumers care about the carbon footprint of their electricity. This paper analyzes a method to integrate consumer carbon preferences in the electricity market-clearing by introducing consumer-based carbon costs and a…
There are clear benefits associated with a particular consumer choice for many current markets. For example, as we consider here, some products might carry environmental or `green' benefits. Some consumers might value these benefits while…
A meta-analysis of published estimates shows that the social cost of carbon has increased as knowledge about climate change accumulates. Correcting for inflation and emission year and controlling for the discount rate, kernel density…
We provide a theoretical framework to examine how carbon pricing policies influence inflation and to estimate the policy-driven impact on goods prices from achieving net-zero emissions. Firms control emissions by adjusting production,…
To enhance decarbonization efforts in electric power systems, we propose a novel electricity market clearing model that internalizes the allocation of emissions from generations to loads and allows for consideration of consumer-side carbon…
The socioeconomic impact of pollution naturally comes with uncertainty due to, e.g., current new technological developments in emissions' abatement or demographic changes. On top of that, the trend of the future costs of the environmental…
How should nations price carbon? This paper examines how the treatment of global inequality, captured by regional welfare weights, affects optimal carbon prices. I develop theory to identify the conditions under which accounting for…
A large database of published model results is used to estimate the distribution of the social cost of carbon as a function of the underlying assumptions. The literature on the social cost of carbon deviates in its assumptions from the…
The fossil-fuel induced contribution to further warming over the 21st century will be determined largely by integrated CO2 emissions over time rather than the precise timing of the emissions, with a relation of near-proportionality between…