Journal Article

No. 2014-31 | October 01, 2014
The Marginal Damage Costs of Different Greenhouse Gases: An Application of FUND PDF Icon
(Published in Special Issue The Social Cost of Carbon)


The authors use FUND 3.9 to estimate the social cost of four greenhouse gases—carbon dioxide, methane, nitrous oxide, and sulphur hexafluoride—with sensitivity tests for carbon dioxide fertilization, terrestrial feedbacks, climate sensitivity, discounting, equity weighting, and socioeconomic and emissions assumptions. They also estimate the global damage potential for each gas—the ratio of the social cost of the non-carbon dioxide greenhouse gas to the social cost of carbon dioxide. For all gases, they find the social costs and damage potentials sensitive to alternative assumptions. The global damage potentials are compared to global warming potentials (GWPs), a key metric used to compare gases. The authors find that global damage potentials are higher than GWPs in nearly all sensitivities. This finding suggests that previous papers using GWPs may be underestimating the relative importance of reducing non-carbon dioxide greenhouse gas emissions from a climate damage perspective. Of particular interest is the sensitivity of results to carbon dioxide fertilization, which notably reduces the social cost of carbon dioxide, but only has a small effect on the other gases. As a result, the global damage potentials for methane and nitrous oxide are much higher with carbon dioxide fertilization included, and higher than many previous estimates.

JEL Classification



Stephanie Waldhoff, David Anthoff, Steven Rose, and Richard S. J. Tol (2014). The Marginal Damage Costs of Different Greenhouse Gases: An Application of FUND. Economics: The Open-Access, Open-Assessment E-Journal, 8 (2014-31): 1—33.


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Comments and Questions

Anonymous - Minor suggestions
October 10, 2014 - 19:01

This is a clean, well-written paper with useful information. The paper should provide a useful basis for understanding the absolute and relative costs of four greenhouse gases—carbon dioxide, methane, nitrous oxide, and sulphur hexafluoride.

I suggest these potential minor improvements:

The abstract should state that ocean acidification ...[more]

... effects of CO2 are not included. If true, state that a variety of other external costs of emissions are not included.

On page 9 to 11, an expanded discussion of the factors that affect the estimated SC-CO2 would be interesting and would help the article stand alone. What share of the cost is attributable to each impact category in the climate impact module?

Reduced burning of fossil fuels might be associated with a variety of other benefits such as preservation of non-renewable resources and other reduced costs; other emissions, future capital costs of transportation and energy, and crowding on highways, for example. That is, SC-CO2 might be only a fraction of the economic reason for social policies to discourage consumption of fossil fuels. This could be mentioned around page 28.

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