Inequality and the Social Cost of Carbon
12:00 - 13:30
Authors: Johannes Emmerling, FEEM, and David Anthoff, UC Berkeley
This paper analyzes the role of equity weighting and discounting providing a method to disentangle both concept in order to allow to separately studying their respective impact for computing the Social Cost of Carbon (SCC). We apply our method using the Integrated Assessment Model FUND to compute the SCC and reach three conclusions. First, the impact of equity weights is greatly reduced if we use weights that do not alter the rate of discount. Second, equity-weighted estimates are sensitive to the resolution of the impact estimates and can vary up to the factor two when using country-level instead of regional data. Thirdly, we discuss the specification of the damage function and its impact for equity weighted SSC estimates. Overall, our results suggest that equity weighting might have a lower effect than found in previous studies.