Risk aversion, time preference, and the social cost of carbon
Bibliographic Data
| ID | 15547740 |
|---|---|
| Authors | David Anthoff (0000-0001-9319-2109, Economic and Social Research Institute, corresponding author), Richard S J Tol, Richard Sj Tol (0000-0002-8012-3988, Economic and Social Research Institute), Gary Yohe (0000-0001-5081-756X, Wesleyan University), Gary W Yohe |
| Year | 2009 |
| Volume | 4 |
| Issue | 2 |
| Pages | 024002-024002 |
| Publication date | 2009-04-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Environmental Research Letters (JOURNAL) |
| Journal identifiers | ISSN: 1748-9326 • E-ISSN: 1748-9326 |
| Publisher | IOP Publishing (PUBLISHER • GB) |
| DOI | 10.1088/1748-9326/4/2/024002 |
| OpenAlex | W2051409901 |
| Language | EN |
| Citations received | 22 |
| References cited | 25 |
The Stern Review reported a social cost of carbon of over $300/tC, calling for ambitious climate policy. We here conduct a systematic sensitivity analysis of this result on two crucial parameters: the rate of pure time preference, and the rate of risk aversion. We show that the social cost of carbon lies anywhere in between 0 and $120 000/tC. However, if we restrict these two parameters to matching observed behaviour, an expected social cost of carbon of $60/tC results. If we correct this estimate for income differences across the world, the social cost of carbon rises to over $200/tC. © 2009 IOP Publishing Ltd
Biology · Carbon fibers · Climate change · Climate policy · Cost–benefit analysis · Econometrics · Economics · Expected utility hypothesis · Financial economics · Matching (statistics · Microeconomics · Preference · Risk aversion (psychology · Social cost · Social discount rate · Social preferences · Statistics · Time preference · Climate Change Policy and Economics · Computer Science · Economic and Environmental Valuation · Energy, Environment, and Transportation Policies · Mathematics · Ecology
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| Unique citing works | 22 |
|---|---|
| Citations per year | 1,16 |
| Citation span | 2007 - 2025 (19) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 22 |