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The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties

2004; Elsevier BV; Volume: 33; Issue: 16 Linguagem: Inglês

10.1016/j.enpol.2004.04.002

1873-6777

Richard S.J. Tol,

Energy, Environment, and Transportation Policies

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.