Marginal Damage Cost Research Articles

The Polluter Pays Principle and Cost-Benefit Analysis of Climate Change: An Application of Fund

I compare and contrast five climate scenarios: (1) no climate policy; (2) non-cooperative cost-benefit analysis (NC CBA); (3) NC CBA with international permit trade; (4) NC CBA with joint and several liability for climate change damages; and (5) NC CBA with liability proportional to a country's share in cumulative emissions. As estimates of the marginal damage costs are low, standard NC CBA implies only limited emission abatement. With international permit trade, emission abatement is even less, as the carbon tax is reduced in countries with fast-growing emissions, and because a permit market ignores the positive, dynamic externalities of abatement. Proportional liability shifts abatement effort towards the richer countries, but away from the fast-growing economies; again, long-term, global emission abatement is reduced. Joint and several liability would lead to more stringent climate policy. These findings are qualitatively robust to the size and accounting of climate change impacts, to the definition of liability, and to the baseline scenario.

06/00991 The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties: Tol, R. S. J. Energy Policy, 2005, 33, (16), 2064–2074.

06/00991 The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties: Tol, R. S. J. Energy Policy, 2005, 33, (16), 2064–2074.

Why Worry About Climate Change? A Research Agenda

Estimates of the marginal damage costs of carbon dioxide emissions suggest that, although climate change is a problem and some emission reduction is justified, very stringent abatement does not pass the cost-benefit test. However, current estimates of the economic impact of climate change are incomplete. Some of the missing impacts are likely to be positive and others negative, but overall the uncertainty seems to concentrate on the downside risks and current estimates of the damage costs may have a negative bias. The research effort on the economic impacts of climate change is minute, and should be strengthened, with a particular focus on the quantification of uncertainties; estimating missing impacts, interactions between impacts and higher-order effects; the valuation of biodiversity loss; the implications of extreme climate scenarios and violent conflict; and climate change in the very long term.

The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties

One hundred and three estimates of the marginal damage costs of carbon dioxide emissions were gathered from 28 published studies and combined to form a probability density function. The uncertainty is strongly right-skewed. If all studies are combined, the mode is $2/tC, the median $14/tC, the mean $93/tC, and the 95 percentile $350/tC. Studies with a lower discount rate have higher estimates and much greater uncertainties. Similarly, studies that use equity weighing, have higher estimates and larger uncertainties. Interestingly, studies that are peer-reviewed have lower estimates and smaller uncertainties. Using standard assumptions about discounting and aggregation, the marginal damage costs of carbon dioxide emissions are unlikely to exceed $50/tC, and probably much smaller.

Measurement of the scarcity of soil in agriculture

The paper defines the concept of land degradation and costs and effects of soil erosion. Through the concept of optimal levels of soil erosion, a conceptual model of the social costs of soil degradation is elaborated. The discussion focuses on the measurement aspects of the economic scarcity of soil in the agriculture sector. Reliable estimates of the true impacts of soil degradation can only be made if data on marginal damage costs and marginal conservation costs are available. The different scarcity indicators are evaluated and competitive land rental prices are considered as appropriate in indicating soil scarcity in agriculture.

Aquaculture and the endogenous damage cost of water pollution: The case of Taiwan

The endogenous damage cost of water pollution to eel production is derived based on a certainty equivalent model that takes into account a farmer's avoidance behaviour against water pollution, and differentiates the productivity effect of pollution control inputs from conventional productive inputs. Whether the marginal damage cost increases with pollution concentration depends on the difference between the direct damaging effect and the induced damage‐reducing effect. A decreasing marginal damage cost curve of eel aquaculture in Taiwan is elicited, which explains partly the failure of a Coasian approach experimented in a recent conflict due to water pollution.

The Acid Rain Game as a Resource Allocation Process with an Application to the International Cooperation among Finland, Russia and Estonia

We consider optimal cooperation in transboundary air pollution abatement among several countries under incomplete information, i.e., local information only on marginal emission abatement costs and damage costs. Directions of emission abatement in each country are determined that generate a succession of emissions programs shown to converge to an economic optimum. A cost sharing scheme, that results from appropriately designed international transfers, guarantees that the individual costs of all parties are nonincreasing along the path towards the optimum. A version of Maler's (1989) ''acid rain game'' is used for a numerical application.

Pollution standards vs charges under uncertainty

Conventional analysis of pollution control policy under uncertainty does not properly account for the potential cost effectiveness difference between standards and charges, thus drawing misleading conclusions for the case of inefficient standards. Correcting for this anomaly, the following conclusions can be drawn. When uncertainty involves the position of the marginal damage cost schedule, rather than policy indifference, a charge is always superior to an inefficient standard. When uncertainty is about the position of the marginal control cost schedule, policy indifference may occur, but if it does it must be the case that the slope of marginal damage cost exceeds that of marginal control cost.

THE CONTROL OF EXTERNALITIES IN A GROWING URBAN ECONOMY

The received theory of externality control, which implicitly assumes that both the social marginal damage and marginal treatment cost schedules will remain fixed during the time any policy is operative, concludes that an effluent tax and an auction of rights to emit pollutants in the amount of a given emissions standard will be equally efficient in meeting that standard. We show that urban growth causes shifts in both schedules. These shifts in turn substantially increase the welfare loss from a fixed effluent tax relative to that from an auction market with a fixed number of licenses.

On the Use of Distributional Weights in Social Cost-Benefit Analysis

Previous articleNext article No AccessCommentsOn the Use of Distributional Weights in Social Cost-Benefit AnalysisLyn SquireLyn Squire Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 88, Number 5Oct., 1980 Article DOIhttps://doi.org/10.1086/260922 Views: 4Total views on this site Citations: 4Citations are reported from Crossref Copyright 1980 The University of ChicagoPDF download Crossref reports the following articles citing this article:David Anthoff, Cameron Hepburn, Richard S.J. Tol Equity weighting and the marginal damage costs of climate change, Ecological Economics 68, no.33 (Jan 2009): 836–849.https://doi.org/10.1016/j.ecolecon.2008.06.017David Anthoff, Cameron J. Hepburn, Richard S. J. Tol Equity Weighting and the Marginal Damage Costs of Climate Change, SSRN Electronic Journal (Jan 2007).https://doi.org/10.2139/ssrn.983032Shlomo Yitzhaki Cost-Benefit Analysis and The Distributional Consequences of Government Projects, National Tax Journal 56, no.22 (Mar 2021): 319–336.https://doi.org/10.17310/ntj.2003.2.02Robert J. Brent Use of Distributional Weights in Cost-Benefit Analysis: a Survey of Schools, Public Finance Quarterly 12, no.22 (Aug 2016): 213–230.https://doi.org/10.1177/109114218401200206