Cited By (@RePEc)
 

Discussion Paper

No. 2011-22 | July 11, 2011
The Influence of the Specification of Climate Change Damages on the Social Cost of Carbon
(Published in Special Issue The Social Cost of Carbon)

Abstract

Drawing upon climate change damage functions previously proposed in the literature that we have calibrated to a common level of damages at 2.5 C, we examine the effect upon the social cost of carbon (SCC) of varying the specification of damages in a DICE-like integrated assessment model. In the absence of risk aversion, all of the SCC estimates but one agree within a factor of two. The effect of varying calibration damages is mildly sublinear. With a moderate level of risk aversion included, however, the differences among estimates grow greatly. By combining elements of different damage specifications and roughly taking into account uncertainty in calibration, we have constructed a composite damage function that attempts to approximate the range of uncertainty in climate change damages. In the absence of risk aversion, SCC values calculated with this function are in agreement with the standard quadratic DICE damage function; with a coefficient of relative risk aversion of 1.4, this damage function yields SCC values more than triple those of the standard function.

Paper submitted to the special issue
The Social Cost of Carbon 
 

JEL Classification

Q54 Q58

Cite As

Robert E. Kopp, Alexander Golub, Nathaniel O. Keohane, and Chikara Onda (2011). The Influence of the Specification of Climate Change Damages on the Social Cost of Carbon. Economics Discussion Papers, No 2011-22, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2011-22

Assessment



Comments and Questions


Anonymous - Referee Report 1
September 05, 2011 - 14:49

See attached file


Anonymous - Invited Reader Comment
September 06, 2011 - 10:55

See attached file


Robert E. Kopp - Reply to Reader Comment
October 04, 2011 - 09:59

See attached file


Robert E. Kopp - Reply to Referee Report 1
October 04, 2011 - 10:01

See attached file


Anonymous - Referee Report 2
December 08, 2011 - 10:59

See attached file


Robert Kopp - Reply to Referee Report 2
December 16, 2011 - 11:13

See attached file


Anonymous - Referee Report 3
January 04, 2012 - 10:21

see attached file