Wikipedia

User:Imanrahul/sandbox

< User:Imanrahul

[1]

Planned edits for CBE195

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My group, consisting of Jeremy, Janine, and, Meredith plan to edit the following Wikipedia pages/sections:

https://en.wikipedia.org/wiki/Carbon_tax#Social_cost_of_carbon
https://en.wikipedia.org/wiki/Carbon_tax#United_States
https://en.wikipedia.org/wiki/Economics_of_climate_change_mitigation#Discount_rates

The following is a brief description of the edits we plan to make:

In carbon tax page under United States tab

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  • Internal Price on Carbon: We will talk about the internal price of carbon used by companies in the United States. Companies in the United States use their own cost of carbon to anticipate future government regulations which may levy an internal price of carbon on their business while planning their operations
  • Timeline of how social cost of carbon is being implemented in the United States.

In carbon tax page under social cost of carbon tab

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  • Dynamic Integrated Climate Economy Model (DICE)

https://en.wikipedia.org/wiki/DICE_model We hope to connect the DICE model and its implications to how countries set the social cost of carbon

In economics of climate change mitigation page under discount rates tab

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  • Elaborate more on what a high and low discount rate entails. Effect on current and future generations, and assumptions made to support a high or low discount rate.


Social cost of carbon

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See also: Economic impacts of climate change § Marginal impacts

The social cost of carbon (SCC) is the marginal cost of the impacts caused by emitting one extra tonne of carbon (as carbon dioxide) at any point in time, inclusive of ‘non-market’ impacts on the environment and human health.[2] The concept of a social cost of carbon was first mooted by the Reagan administration in 1981. The initial purpose of putting a price on a ton of emitted CO2 was to aid policymakers in evaluating whether a policy designed to curb climate change is justified. An intuitive way of looking at this is as follows: if the price of carbon is $50 per tonne in 2030, and we currently have a technology that can reduce emissions by 1 million metric tonnes in 2030, then any investment amount below $50 million would make economic sense, while any amount over that would lead us to consider investing the money somewhere else, and paying to reduce emissions in 2030.[3]

Calculating the SCC requires estimating the residence time of carbon dioxide in the atmosphere, along with estimating the impacts of climate change. The impact of the extra tonne of carbon dioxide in the atmosphere must then be converted to equivalent impacts on climate and and human health, as measured by the of amount of damage done and the cost to fix it.. In economics, comparing impacts over time requires a discount rate. This rate determines the weight placed on impacts occurring at different times.

Best estimates of the SCC come from Integrated Assessment Models (IAM) which predict the effects of climate change under various scenarios and allow for calculation of monetized damages. One of the most widely used IAMs is the Dynamic Integrated model of Climate and the Economy (DICE).

The DICE model, developed by William Nordhaus, makes provisions for the calculation of a social cost of carbon. The DICE model defines the SCC to be “equal to the economic impact of a unit of emissions in terms of t-period consumption as a numéraire.” [4]

The SCC figure computed in 2015 is $31.2 per ton of CO2 for emissions, this amount will rise 3% in real terms, to account for inflation till 2050.[4] Estimates of the dollar cost of carbon dioxide pollution is given per tonne, either carbon, $X/tC, or carbon dioxide, $X/tCO2. One tC is roughly equivalent to 3.7 tCO2.[5]

According to economic theory, if SCC estimates were complete and markets perfect, a carbon tax should be set equal to the SCC. Emission permits would also have a value equal to the SCC. In reality, however, markets are not perfect, SCC estimates are not complete, and externalities in the market are difficult to calculate accurately, resulting in an incorrect amount priced for the carbon tax (Yohe et al.., 2007:823).[6]

Estimates of the SCC are highly uncertain.[7] Yohe et al. (2007:813) summarized the literature on SCC estimates: peer-reviewed estimates of the SCC for 2005 had an average value of $43/tC ($12/tCO2) with a standard deviation of $83/tC.[8] The wide range of estimates is explained mostly by underlying uncertainties in the science of climate change (e.g., the climate sensitivity, which is a measure of the amount of global warming expected for a doubling in the atmospheric concentration of CO
2), different choices of discount rate, different valuations of economic and non-economic impacts, treatment of equity, and how potential catastrophic impacts are estimated.[8] One specific issue arises over coming to a consensus on what discount rate to use. Some, like Nordhaus, advocate for a discount rate that is pegged to current market interest rates, as we should treat efforts to reduce carbon dioxide emissions just like we treat any other economic activity. Others, like Stern, propose a much smaller discount rate because "normal" discount rates are skewed when applied over the time scales over which climate change acts.[9] As a result, other estimates of the SCC spanned at least three orders of magnitude, from less than $1/tC to over $1,500/tC.[8] The true SCC is expected to increase over time.[8] The rate of increase will very likely be 2 to 4% per year.[8] A recent meta-analysis of the literature on the estimates of the social costs of carbon, however, finds evidence of publication bias in favor of larger estimates.[10]

  1. ^ "China fears North Korea-US conflict 'at any moment'". BBC News. 2017-04-14. Retrieved 2017-04-14.
  2. ^ Yohe, G.W.; et al. (2007). "20.6 Global and aggregate impacts; 20.6.1 History and present state of aggregate impact estimates". In M.L. Parry,; et al. (eds.). Perspectives on climate change and sustainability. Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press. Retrieved 2011-10-12.{{cite book}}: CS1 maint: extra punctuation (link)
  3. ^ Carbon, Committee on Assessing Approaches to Updating the Social Cost of; Society, Board on Environmental Change and; Education, Division of Behavioral and Social Sciences and; Sciences, National Academies of; Engineering; Medicine, and (2017-01-11). Valuing Climate Damages: Updating Estimation of the Social Cost of Carbon Dioxide. doi:10.17226/24651. ISBN 9780309454209.
  4. ^ a b Nordhaus, William D. (2017-02-14). "Revisiting the social cost of carbon". Proceedings of the National Academy of Sciences. 114 (7): 1518–1523. doi:10.1073/pnas.1609244114. ISSN 0027-8424. PMC 5321009. PMID 28143934.{{cite journal}}: CS1 maint: PMC format (link)
  5. ^ The correct conversion factor is the molar mass of carbon dioxide divided by the molar mass of carbon (approx. 44 g per mol divided by 12 g per mol)
  6. ^ Yohe, G.W.; et al. (2007). "20.6.1 History and present state of aggregate impact estimates". In M.L. Parry,; et al. (eds.). Perspectives on climate change and sustainability. Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press. Retrieved 2011-10-12.{{cite book}}: CS1 maint: extra punctuation (link)
  7. ^ Klein, R.J.T.; et al. (2007). "18.4.2 Consideration of costs and damages avoided and/or benefits gained". In M.L. Parry; et al. (eds.). Inter-relationships between adaptation and mitigation. Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press. pp. 756–757. Retrieved 2011-10-12. Quote: "Note that the estimates of avoided damages are highly uncertain. A survey of fourteen experts in estimating the social cost of carbon rated their estimates as low confidence, due to the many gaps in the coverage of impacts and valuation studies, uncertainties in projected climate change, choices in the decision framework and the applied discount rate (...) Many published studies of damages in sectors that are quantified in economic models (but mostly market-based costs and related to incremental projections of temperature) and with discount rates commonly used in economic decision-making (e.g., 3% or higher) lead to low estimates of the social cost of carbon. In general, confidence in these estimates is low."
  8. ^ a b c d e Yohe, G.W.; et al. (2007). "Executive summary". In M.L. Parry,; et al. (eds.). Perspectives on climate change and sustainability. Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press. Retrieved 2011-10-12.{{cite book}}: CS1 maint: extra punctuation (link)
  9. ^ "Discount rates: A boring thing you should know about (with otters!)". Grist. 2012-09-24. Retrieved 2017-04-28.
  10. ^ Havranek, T., Irsova, Z., Janda, K, and D. Zilberman (2014). Selective Reporting and the Social Cost of Carbon. UC Berkeley CUDARE working paper 1139. Retrieved 2014-12-08.{{cite book}}: CS1 maint: multiple names: authors list (link)
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