The impact of climate change and the social cost of carbon

Authored by: Richard S. J. Tol

Routledge Handbook of Energy Economics

Print publication date:  September  2019
Online publication date:  September  2019

Print ISBN: 9781138208254
eBook ISBN: 9781315459653
Adobe ISBN:


 Download Chapter



The social cost of carbon is the marginal impact of climate change. Estimates of the total impact of climate change show that a century of climate change is about as bad as losing a decade of economic growth. Poorer countries are more vulnerable. The uncertainties are vast and skewed the wrong way. The many published estimates of the social cost of carbon span six orders of magnitude, and some studies find support for a carbon subsidy. There is mixed evidence for publication bias. MATLAB code is used to illustrate key sensitivities of the social cost of carbon; readers can readily run their own analyses. The bulk of the published estimates suggests that carbon dioxide should be taxed somewhere between $20/tC and $400/tC, depending on the preferred rates of discount and risk aversion. Revealed preferences on carbon pricing are at the lower end of this range. The social cost of carbon rises at around 2% per year. The central estimate of the social cost of carbon has not moved much over the last two decades, but the range of estimates is tightening slowly.

Search for more...
Back to top

Use of cookies on this website

We are using cookies to provide statistics that help us give you the best experience of our site. You can find out more in our Privacy Policy. By continuing to use the site you are agreeing to our use of cookies.