Stabilizing the global climate: A simple and robust benefit cost analysis

Most models of optimal climate change policy are complex and opaque. In this paper, it is argued that the convexity of climate damage and mitigation cost function provides a basis for the derivation of simple and robust estimates of optimal stabilization targets and carbon prices. For all but a few extreme assumptions, the optimal carbon price is between $40 and $75. Similarly, for a wide range of parameter values the optimal target is between 425 ppm and 475 ppm. In all simulations, the total cost of mitigation is below 5 per cent of income, and in most cases substantially below.


Issue Date:
2011
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/152097
Total Pages:
27
JEL Codes:
Q58; Q52
Series Statement:
Climate Change
C11_1




 Record created 2017-04-01, last modified 2017-04-26

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