Relative Prices and Climate Policy: How the Scarcity of Nonmarket Goods Drives Policy Evaluation

• 成果类型: Article
• 署名作者: Drupp, Moritz A.; Haensel, Martin C.
• 署名单位: University of Hamburg; Potsdam Institut fur Klimafolgenforschung
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20180760
• 发表日期: 2021
• 页码: 168-201
• 关键词: willingness-to-pay; integrated assessment; ECONOMICS; sustainability; valuation; substitutability; uncertainty; mitigation; impacts; MODEL

摘要

Climate change not only impacts production and market consumption but also the relative scarcity of nonmarket goods, such as environmental amenities. We study fundamental drivers of the resulting relative price changes, their potential magnitude, and their implications for climate policy in Nordhaus's Dynamic Integrated Climate-Economy (DICE) model, thereby addressing one of its key criticisms. We propose plausible ranges for these relative prices changes based on best available evidence. Our central calibration reveals that accounting for relative prices is equivalent to decreasing pure time preference by 0.6 percentage points and leads to a more than 50 percent higher social cost of carbon.