Priority for the worse-off and the social cost of carbon

Adler, Matthew, Anthoff, David, Bosetti, Valentina, Garner, Greg, Keller, Klaus and Treich, Nicolas (2017) Priority for the worse-off and the social cost of carbon. Nature Climate Change, 7. pp. 443-449.

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Official URL: http://tse-fr.eu/pub/31774

Abstract

The social cost of carbon (SCC) is a key tool in climate policy. The SCC expresses in monetary terms the social impact of the emission of a ton of CO2 in a given year. The SCC is calculated using a ‘social welfare function’ (SWF): a method for assessing social welfare. The dominant SWF in climate policy is the discounted-utilitarian SWF. Individuals’ well-being numbers (utilities) are summed, and the values for later generations are reduced (‘discounted’). This SWF has been criticized for ignoring the distribution of well-being and including an arbitrary time preference. Here, we use a ‘prioritarian’ SWF, with no time discount, to calculate the SCC. This SWF gives extra weight (‘priority’) to worse-off individuals. Prioritarianism is a well-developed concept in ethics and welfare economics, but has been rarely used in climate scholarship. We find substantial differences between the discounted-utilitarian and non-discounted prioritarian SCCs.

Item Type: Article
Language: English
Date: 22 May 2017
Refereed: Yes
Place of Publication: Londres
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 13 Jun 2017 10:24
Last Modified: 28 May 2018 09:24
OAI ID: oai:tse-fr.eu:31774
URI: http://publications.ut-capitole.fr/id/eprint/24148

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