Damage Estimates and the Social Cost of Carbon: The Need for Change, 1–8. Ackerman, F. 2010. ![Damage Estimates and the Social Cost of Carbon: The Need for Change, 1–8 [pdf]](https://bibbase.org/img/filetypes/pdf.svg "pdf")
Paper abstract bibtex The social cost of carbon (SCC) is a measure of the damage caused by an incremental ton of CO2 emissions. It was estimated at $21 per ton of CO2 by an interagency working group in 2009. The working group relied on three models which assume quite low, or even negative, damages from the first several degrees of warming; this choice biases the SCC estimates downward. The problem is not limited to the modeling of catastrophic risks and impacts at relatively high temperatures; these important issues are addressed in the work of Martin Weitzman, among others. There also are serious problems with the treatment of the damages from the first few degrees of warming, which dominate the results of short-run and high-discount-rate analyses. FUND projects net global benefits from the first 3oC of warming. (Hence, at a 5% discount rate, FUND finds the SCC to be negative, implying that carbon emissions should be subsidized.) FUND‟s net benefits from warming emerge primarily from two areas. First, it relies on dated and overly optimistic research on agricultural impacts. Newer research implies much lower, if any, agricultural benefits from warming. Second, FUND projects a huge reduction in mortality from warming, mainly due to the arbitrary assumption that rural populations suffer from cold-related deaths, but not from heat-related deaths. FUND values avoided deaths at 200 times per capita incomes, so this assumed mortality reduction leads to a large monetized benefit. DICE projects very small net damages from the first few degrees of warming. DICE assumes, on slim evidence, that there is a large global willingness to pay for the enjoyment of warmer weather. This category, which is not included in most analyses, offsets much of the economic damages from warming, which are assumed to be small. Michael Hanemann (2008) reviews each component of the DICE damage function in detail, and produces a revised total which is four times as large as assumed in DICE. PAGE damage estimates are indirectly calibrated on the basis of past studies by Nordhaus and Tol; they do not represent independent research on climate damages. As PAGE developer Chris Hope and I, with other colleagues, have shown, the low damage estimates in PAGE2002 are due, in part, to the assumption of extensive, very low-cost adaptation; other reasonable hypotheses imply much greater damages (Ackerman et al. 2009). In short, the pictures of climate damages relied on in the interagency working group‟s SCC estimate are fundamentally at odds with the mainstream of recent climate science and policy discussion, including the widely accepted importance of staying below 2oC of warming. Different damage functions – likely implying a much higher SCC – would be needed to incorporate the latest findings of climate science.
@misc{ackerman_damage_2010,
title = {Damage {Estimates} and the {Social} {Cost} of {Carbon}: {The} {Need} for {Change}, 1–8},
url = {http://sei-us.org/Publications_PDF/SEI-Ackerman-Critique-of-Damage-Estimates-2010.pdf},
abstract = {The social cost of carbon (SCC) is a measure of the damage caused by an incremental ton of CO2 emissions. It was estimated at \$21 per ton of CO2 by an interagency working group in 2009. The working group relied on three models which assume quite low, or even negative, damages from the first several degrees of warming; this choice biases the SCC estimates downward.
The problem is not limited to the modeling of catastrophic risks and impacts at relatively high temperatures; these important issues are addressed in the work of Martin Weitzman, among others. There also are serious problems with the treatment of the damages from the first few degrees of warming, which dominate the results of short-run and high-discount-rate analyses.
FUND projects net global benefits from the first 3oC of warming. (Hence, at a 5\% discount rate, FUND finds the SCC to be negative, implying that carbon emissions should be subsidized.) FUND‟s net benefits from warming emerge primarily from two areas. First, it relies on dated and overly optimistic research on agricultural impacts. Newer research implies much lower, if any, agricultural benefits from warming. Second, FUND projects a huge reduction in mortality from warming, mainly due to the arbitrary assumption that rural populations suffer from cold-related deaths, but not from heat-related deaths. FUND values avoided deaths at 200 times per capita incomes, so this assumed mortality reduction leads to a large monetized benefit.
DICE projects very small net damages from the first few degrees of warming. DICE assumes, on slim evidence, that there is a large global willingness to pay for the enjoyment of warmer weather. This category, which is not included in most analyses, offsets much of the economic damages from warming, which are assumed to be small. Michael Hanemann (2008) reviews each component of the DICE damage function in detail, and produces a revised total which is four times as large as assumed in DICE.
PAGE damage estimates are indirectly calibrated on the basis of past studies by Nordhaus and Tol; they do not represent independent research on climate damages. As PAGE developer Chris Hope and I, with other colleagues, have shown, the low damage estimates in PAGE2002 are due, in part, to the assumption of extensive, very low-cost adaptation; other reasonable hypotheses imply much greater damages (Ackerman et al. 2009).
In short, the pictures of climate damages relied on in the interagency working group‟s SCC estimate are fundamentally at odds with the mainstream of recent climate science and policy discussion, including the widely accepted importance of staying below 2oC of warming. Different damage functions – likely implying a much higher SCC – would be needed to incorporate the latest findings of climate science.},
urldate = {2017-06-28},
author = {Ackerman, Frank},
year = {2010},
keywords = {KR, Untagged},
}
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There also are serious problems with the treatment of the damages from the first few degrees of warming, which dominate the results of short-run and high-discount-rate analyses. FUND projects net global benefits from the first 3oC of warming. (Hence, at a 5% discount rate, FUND finds the SCC to be negative, implying that carbon emissions should be subsidized.) FUND‟s net benefits from warming emerge primarily from two areas. First, it relies on dated and overly optimistic research on agricultural impacts. Newer research implies much lower, if any, agricultural benefits from warming. Second, FUND projects a huge reduction in mortality from warming, mainly due to the arbitrary assumption that rural populations suffer from cold-related deaths, but not from heat-related deaths. FUND values avoided deaths at 200 times per capita incomes, so this assumed mortality reduction leads to a large monetized benefit. DICE projects very small net damages from the first few degrees of warming. DICE assumes, on slim evidence, that there is a large global willingness to pay for the enjoyment of warmer weather. This category, which is not included in most analyses, offsets much of the economic damages from warming, which are assumed to be small. Michael Hanemann (2008) reviews each component of the DICE damage function in detail, and produces a revised total which is four times as large as assumed in DICE. PAGE damage estimates are indirectly calibrated on the basis of past studies by Nordhaus and Tol; they do not represent independent research on climate damages. As PAGE developer Chris Hope and I, with other colleagues, have shown, the low damage estimates in PAGE2002 are due, in part, to the assumption of extensive, very low-cost adaptation; other reasonable hypotheses imply much greater damages (Ackerman et al. 2009). In short, the pictures of climate damages relied on in the interagency working group‟s SCC estimate are fundamentally at odds with the mainstream of recent climate science and policy discussion, including the widely accepted importance of staying below 2oC of warming. Different damage functions – likely implying a much higher SCC – would be needed to incorporate the latest findings of climate science.","urldate":"2017-06-28","author":[{"propositions":[],"lastnames":["Ackerman"],"firstnames":["Frank"],"suffixes":[]}],"year":"2010","keywords":"KR, Untagged","bibtex":"@misc{ackerman_damage_2010,\n\ttitle = {Damage {Estimates} and the {Social} {Cost} of {Carbon}: {The} {Need} for {Change}, 1–8},\n\turl = {http://sei-us.org/Publications_PDF/SEI-Ackerman-Critique-of-Damage-Estimates-2010.pdf},\n\tabstract = {The social cost of carbon (SCC) is a measure of the damage caused by an incremental ton of CO2 emissions. It was estimated at \\$21 per ton of CO2 by an interagency working group in 2009. The working group relied on three models which assume quite low, or even negative, damages from the first several degrees of warming; this choice biases the SCC estimates downward. \n\nThe problem is not limited to the modeling of catastrophic risks and impacts at relatively high temperatures; these important issues are addressed in the work of Martin Weitzman, among others. There also are serious problems with the treatment of the damages from the first few degrees of warming, which dominate the results of short-run and high-discount-rate analyses.\n\nFUND projects net global benefits from the first 3oC of warming. (Hence, at a 5\\% discount rate, FUND finds the SCC to be negative, implying that carbon emissions should be subsidized.) FUND‟s net benefits from warming emerge primarily from two areas. First, it relies on dated and overly optimistic research on agricultural impacts. Newer research implies much lower, if any, agricultural benefits from warming. Second, FUND projects a huge reduction in mortality from warming, mainly due to the arbitrary assumption that rural populations suffer from cold-related deaths, but not from heat-related deaths. FUND values avoided deaths at 200 times per capita incomes, so this assumed mortality reduction leads to a large monetized benefit.\n\nDICE projects very small net damages from the first few degrees of warming. DICE assumes, on slim evidence, that there is a large global willingness to pay for the enjoyment of warmer weather. This category, which is not included in most analyses, offsets much of the economic damages from warming, which are assumed to be small. Michael Hanemann (2008) reviews each component of the DICE damage function in detail, and produces a revised total which is four times as large as assumed in DICE.\n\nPAGE damage estimates are indirectly calibrated on the basis of past studies by Nordhaus and Tol; they do not represent independent research on climate damages. As PAGE developer Chris Hope and I, with other colleagues, have shown, the low damage estimates in PAGE2002 are due, in part, to the assumption of extensive, very low-cost adaptation; other reasonable hypotheses imply much greater damages (Ackerman et al. 2009).\n\nIn short, the pictures of climate damages relied on in the interagency working group‟s SCC estimate are fundamentally at odds with the mainstream of recent climate science and policy discussion, including the widely accepted importance of staying below 2oC of warming. 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