The Weitzman Premium on the Social Cost of Carbon
Preference heterogeneity massively increases the social cost of carbon. We call this the Weitzman premium. Uncertainty about an exponential discount rate implies a hyperbolic discount rate, which in the near term is equal to the average discount rate but in the long term falls to the minimum discount rate. We calibrate the pure rate of time preference and the inverse of the elasticity of intertemporal substitution of 79,273 individuals from 76 countries and compute the corresponding social cost of carbon. Compared to the social cost of carbon for average time preferences, the average social cost of carbon is 6 times as large in the base calibration, and up to 200 times as large in sensitivity analyses.
Code (1)
Methods 이 논문이 사용한 방법론
Similar Papers 제목 키워드 기반
The Carbon Premium: Correlation or Causation? Evidence from S&P 500 Companies
In the context of whether investors are aware of carbon-related risks, it is often hypothesized that there may be a carbon premium in the value of stocks of firms, conferring an abnormal excess value to firms' shares as …
Selection biasMeta-emulation: An application to the social cost of carbon
A large database of published model results is used to estimate the distribution of the social cost of carbon as a function of the underlying assumptions. The literature on the social cost of carbon deviates in its assum…
Electric Vehicle Sales Forecasting Model Considering Green Premium: A Chinese Market-based Perspective
"Green Premiums" which means the difference in cost between emissions-emitting technology and zero-emissions or emissions-reducing technology is significant for those renewable energy technology to address the climate ch…
The Social Cost of Carbon
The social cost of carbon is the damage avoided by slightly reducing carbon dioxide emissions. It is a measure of the desired intensity of climate policy. The social cost of carbon is highly uncertain because of the long…
Trends and biases in the social cost of carbon
An updated and extended meta-analysis confirms that the central estimate of the social cost of carbon is around $200/tC with a large, right-skewed uncertainty and trending up. The pure rate of time preference and the inv…