The Risk-Adjusted Carbon Price

• 成果类型: Article
• 署名作者: Van den Bremer, Ton S.; Van der Ploeg, Frederick
• 署名单位: Delft University of Technology; University of Oxford; University of Oxford; University of Amsterdam
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20180517
• 发表日期: 2021
• 页码: 2782-2810
• 关键词: stochastic integrated assessment; CLIMATE-CHANGE; long-run; tipping points; uncertainty; POLICY; GROWTH; dioxide; consumption; mitigation

摘要

The social cost of carbon is the expected present value of damages from emitting one ton of carbon today. We use perturbation theory to derive an approximate tractable expression for this cost adjusted for climatic and economic risk. We allow for different aversion to risk and intertemporal fluctuations, skewness and dynamics in the risk distributions of climate sensitivity and the damage ratio, and correlated shocks. We identify prudence, insurance, and exposure effects, reproduce earlier analytical results, and offer analytical insights into numerical results on the effects of economic and damage ratio uncertainty and convex damages on the optimal carbon price.