Wednesday, April 02, 2008

What's the social cost of carbon?

Marty Weitzman thinks it should be $50/ton.

Daniel Hall provides some additional thoughts:

1. Muse about uncertainty all you want, but ultimately you have to name your price.

2. This is higher than a lot of mainstream economists who work on this issue. Bill Nordhaus thinks the right value today is around $10 per ton of CO2 (see Table 5-4 of this publication); Billy Pizer at RFF thinks it is close to double this (ungated version here, see Table 5 (3 in gated version) suggesting the correct valuation is 82% higher). On the other hand Nic Stern estimates it should be $80 per ton of CO2.

3. Carbon prices in Europe are currently about 70% of this level (thanks partially to the weak dollar).

4. Carbon prices in the U.S. are short of this mark by about… oh, that’s right, $50.

It a little tricky to place a number on the social cost of carbon emissions when none of us really know how much we are responsible for producing. When flying i am not responsible for all the carbon, a couple of hundred of us are. How much carbon does heating a house emit? Buying local vs. imported food? All these grey areas make it tricky for any one person to understand how much they impact the's a website to help clarify the situation, i'm sure many of you have already heard of it.
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