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The damage costs of climate change - a note on tangibles and intangibles, applied to DICE

journal contribution
posted on 2023-06-08, 08:08 authored by Richard TolRichard Tol
Economic cost-benefit analysis of the costs of greenhouse gas emission abatement and climate change often points towards limited abatement. This note elucidates one reason why this result is obtained: the way in which the intangible damages are treated and the utility function is specified. On the basis of the DICE model, it is shown that by putting the intangible damages directly into the utility function, and by assuming them to grow with per capita income, the optimal reduction increases, and in the second case more than triples, compared to Nordhaus's original results.

History

Publication status

  • Published

Journal

Energy Policy

ISSN

0301-4215

Publisher

Elsevier

Issue

5

Volume

22

Page range

436-438

Department affiliated with

  • Economics Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-02-06

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