Risk aversion, time preference, and the social cost of carbon. Anthoff, D., Tol, R. S J, & Yohe, G. W Environmental Research Letters, 4(2):024002, April, 2009. ![Risk aversion, time preference, and the social cost of carbon [link]](https://bibbase.org/img/filetypes/link.svg "link")
Paper doi abstract bibtex 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.
@article{anthoff_risk_2009,
title = {Risk aversion, time preference, and the social cost of carbon},
volume = {4},
issn = {1748-9326},
url = {http://stacks.iop.org/1748-9326/4/i=2/a=024002?key=crossref.131261fbb77bd1050e655571d27b95f7},
doi = {10.1088/1748-9326/4/2/024002},
abstract = {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.},
number = {2},
urldate = {2017-06-28},
journal = {Environmental Research Letters},
author = {Anthoff, David and Tol, Richard S J and Yohe, Gary W},
month = apr,
year = {2009},
keywords = {KR, Untagged},
pages = {024002},
}
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