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- Azar, Christian, 1969, et al.
(författare)
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The social cost of methane
- 2023
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Ingår i: Climatic Change. - 1573-1480 .- 0165-0009. ; 176:6
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Tidskriftsartikel (refereegranskat)abstract
- A rapid and sustained reduction of methane emissions has been proposed recently as a key strategy to meet the climate targets of the Paris Agreement. The social cost of methane (SCM), which expresses the climate damage cost associated with an additional metric ton of methane emitted, is a metric that can be used to design policies to reduce the emissions of this gas. Here, we extend the DICE-2016R2 model so that it includes an improved carbon cycle and energy balance model as well as methane emissions, methane abatement cost, and an atmospheric methane cycle explicitly to be able to provide consistent estimations of the SCM. We estimate the SCM to lie in the range 880–8100 USD/tCH4 in 2020, with a base case estimate of 4000 USD/tCH4. We find our base case estimate to be larger than the average SCM presented in other studies mainly due to the revised damage function we use. We also estimate the social cost of carbon (SCC) and find that SCM estimates are less sensitive to variations in the social discount rate than the SCC due to the relatively short lifetime of methane. Changes in the parameterization of the damage function have similar relative impacts on both SCM and SCC. Furthermore, we evaluate the ratio of SCM to SCC as an alternative metric to GWP-100 of CH4 to facilitate tradeoffs between these two gases. We find this ratio to lie in the range 7–33 in 2020, with a base case estimate of 21, based on an extensive sensitivity analysis with respect to the discount rate, damage cost, and underlying emission scenarios. We also show that the global warming potential (GWP) and the SCM to SCC ratio are almost the same if the inverse of the effective discounting (in the social cost calculations) is equal to the time horizon used to evaluate the GWP. For comparison, the most widely used GWP, i.e., with a time horizon of 100 years, equals 27, hence in the upper range of the ratio we find using the SCM to SCC ratio.
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- Hänsel, Martin C., et al.
(författare)
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Climate economics support for the UN climate targets
- 2020
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Ingår i: Nature Climate Change. - : Springer Science and Business Media LLC. - 1758-678X .- 1758-6798. ; 10:August 2020
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Tidskriftsartikel (refereegranskat)abstract
- Under the UN Paris Agreement, countries committed to limiting global warming to well below 2 °C and to actively pursue a 1.5 °C limit. Yet, according to the 2018 Economics Nobel laureate William Nordhaus, these targets are economically suboptimal or unattainable and the world community should aim for 3.5 °C in 2100 instead. Here, we show that the UN climate targets may be optimal even in the Dynamic Integrated Climate–Economy (DICE) integrated assessment model, when appropriately updated. Changes to DICE include more accurate calibration of the carbon cycle and energy balance model, and updated climate damage estimates. To determine economically ‘optimal’ climate policy paths, we use the range of expert views on the ethics of intergenerational welfare. When updates from climate science and economics are considered jointly, we find that around three-quarters (or one-third) of expert views on intergenerational welfare translate into economically optimal climate policy paths that are consistent with the 2 °C (or 1.5 °C) target.
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- Wei, Jiegen, 1979, et al.
(författare)
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The fossil endgame: strategic oil price discrimination and carbon taxation
- 2012
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Ingår i: Journal of Environmental Economics and Policy. - : Informa UK Limited. - 2160-6552 .- 2160-6544. ; 1:1, s. 48-69
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Tidskriftsartikel (refereegranskat)abstract
- This paper analyzes how fossil fuel-producing countries can counteract climate policy. We analyze the exhaustion of oil resources and the subsequent transition to a backstop technology as a strategic game between the consumers and producers of oil, which we refer to simply as ‘OECD’ and ‘OPEC’, respectively. The consumers, OECD, derive benefits from oil, but worry about climate effects from carbon dioxide emissions. OECD has two instruments to manage this: it can tax fuel consumption and decide when to switch to a carbon-neutral backstop technology. The tax reduces climate damage and also appropriates some of the resource rent. OPEC retaliates by choosing a strategy of price discrimination, subsidizing oil in its domestic markets. The results show that price discrimination enables OPEC to avoid some of the adverse consequences of OECD's fuel tax and its switch to the backstop technology by consuming a larger share of the oil in its own domestic markets. Our results suggest that persuading fossil exporters to stop subsidizing domestic consumption will be difficult.
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