The Cost Of Current Co2 Emissions

1092 WordsAug 14, 20165 Pages
Overall, Nordhaus and Boyer (1999), updated in Nordhaus (2006), put discounted cost of current co2 emissions, over expected 100-year atmospheric life, at about $20 per ton of carbon in 2005. However, there is build up effect in the long with increase in affected world output, improved mitigation technology and as additional damages from warming rise with temperature level; the projected cost per ton of carbon increases to $84 by 2050, and $270 by 2100. Most assessments are in the same line, example (David Pearce 2005, Robert Mendelsohn et al. 1998); a meta-analysis written by Richard Tol (2005) suggests a current upper bound cost of $50 per ton. A striking conclusion was arrived at in Stern’s recent Review (Nicholas Stern 2006), which keeps total damages of future warming at 5–20% of world GDP in reoccurrence and recommends a current social cost equivalent of $311 per ton of carbon. This larger estimate is explained by the assumptions of rapid warming, disruptions from extreme weather conditions, and a limited scope for adaptation to climate change. According to Nordhaus (2007), most differences is from the assumption that the social discount rate of consumption in future is about 1% not 3–5% assumed in previous studies; the low rate magnifies the present value of occurring damages one or two centuries ahead, when there is a rise beyond 5°C under business as usual assumptions. The appropriate discount rate for long ranging effects like this is contentious (Paul Portney
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