Climate Risks and Carbon Prices: Revising the Social Cost of Carbon

Ackerman, Frank; Stanton, Elizabeth A.

doi:10.2139/ssrn.1973864

Cited by 62 publications

(61 citation statements)

References 16 publications

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“…For instance, we estimate that California would need to value carbon at $160/ton CO 2 to make the current PV incentive for educational institutions pay off (compared to the roughly $40/ton CO 2 that we used in the rest of this paper). It is worth noting that it is not difficult to find literature arguing that CO 2 emissions should be valued at more than $160/ton [58][59][60]. Alternatively, California would need to provide incentives of $350 kW −1 to meet carbon offsets currently valued at $40/ton CO 2 (compared to the current average incentive value of $1400 kW −1 in the LBNL TTS10 dataset [15]).…”

Section: Social Net-benefits Of Us School Pv To the Publicmentioning

confidence: 99%

Solar PV as a mitigation strategy for the US education sector

Hanus

Wong‐Parodi

Vaishnav

et al. 2019

Environ. Res. Lett.

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Solar photovoltaic (PV) is an important strategy to de-carbonize the energy sector in the United States and to reduce the health, environmental, and climate change damages associated with the production of electricity from fossil fuel sources. While the potential for solar PV in the residential and commercial sectors has been widely studied, the potential in educational buildings is largely unknown. Educational institutions account for 11% of total US building electricity consumption and 14% of building floorspace. These buildings also contribute to approximately 4% of total US CO 2 emissions, thus playing a potentially important role in climate mitigation strategies. We estimate the electricity use for 132k educational institutions across the US and estimate electricity generation, greenhouse gas and health damaging air emissions reductions, and private and social costs and benefits that would result from adopting rooftop solar PV. We find that solar PV in US educational institutions could provide 100 TWh of electricity services annually, meeting 75% of these buildings' current electricity consumption. We estimate the highest generation potential in Texas, California, and Florida with K-12 public educational institutions comprising the bulk of that generation. The provision of electricity services from rooftop solar PV on educational institutions could reduce health, environmental, and climate change damages by roughly $4 billion per year (assuming a social cost of carbon of $40/ton and value of statistical life of $10M in 2018 USD). Two key findings from this study are that: (i) the private costs of solar for educational institutions still exceed the private benefits from reduced electricity consumption across the entire country (unless a third party operation model is used, in which case some locations can have net-benefits), and (ii) with the exceptions of California and New York, the social health, environmental and climate change benefits exceed the levels of current incentives provided by the state and retail subsidies.

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Section: Social Net-benefits Of Us School Pv To the Publicmentioning

confidence: 99%

Solar PV as a mitigation strategy for the US education sector

Hanus

Wong‐Parodi

Vaishnav

et al. 2019

Environ. Res. Lett.

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“…The standard economic formula for this is as a percentage loss of global GDP caused by the contemporaneous level of mean global warming (though whether to use market or purchasing power exchange rates in aggregating global GDP is itself an ethical choice). Disputes solely about such damage functions can readily result in a three‐ to fourfold range of SCCs (e.g., see Figures 4–5 of Ackerman & Stanton, ); though it is also highly questionable whether the standard formula includes all the main causes or effects of warming damage, as noted later. I now discuss three main problems with any damage function: the implicit implausibility to climate scientists of many IAMs' damage functions (illustrated next for DICE, a leading IAM); wide‐ranging criticisms by many economists of the arbitrary guesses found in all damage functions; and the untestability, I will argue, of any “improvements” in damage functions made by future research.…”

Section: The Scc: Unresolvable or Improvable?mentioning

confidence: 99%

Why the social cost of carbon will always be disputed

Pezzey

2018

WIREs Climate Change

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Any social cost of carbon (SCC) calculated from an integrated assessment model of global climate‐economy interactions will always be disputed. This is because a key model input–namely the valuation of centennial climate damage–is highly unknowable for fundamental reasons discussed here. Problems with damage valuation are highlighted by the implicit implausibility to climate scientists of a leading model's (centennial) damage function, and by strong criticisms of damage functions by many climate economists. The claim that statistical analyses of past weather impacts on local economies, combined with structural modeling of sectoral impacts, can significantly improve centennial damage valuation rests on untestable, far‐out‐of‐sample extrapolation. Testing centennial climate (natural) science projections is generally harder than testing predictions in astronomy, geology and other earth sciences, because of Earth's uniqueness, and the unprecedented degree of likely climate change; but stable underlying laws make climate modeling based on past observations meaningful. By contrast, the added complexity of human behavior means there are no quantitatively stable laws for modeling the value of centennial climate damage. I suggest that any carbon prices used to inform climate policies, be they carbon prices used as policy instruments, or complementary, non‐carbon‐price policies, should instead be based on marginal abatement costs, found by modeling low‐cost pathways to socially agreed, physical climate targets. A pathway approach to estimating carbon prices poses challenges to many economists, and is no panacea, but it avoids any illusion of optimality, and facilitates detailed analysis of sectoral policies. This article is categorized under: Climate Economics > Aggregation Techniques for Impacts and Mitigation Costs Assessing Impacts of Climate Change > Evaluating Future Impacts of Climate Change

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“…Carbon that is sequestered (added to soil and vegetation, typically measured on an annual basis as tons of carbon per acre per year) or stored (in vegetation and soils in tons of carbon per acre) can be valued by using carbon markets or estimates of the social cost of carbon (Tol, 2008;Ackerman and Stanton, 2012). Given the immature state of carbon markets and the fact that market caps are not tied to ecological thresholds for climate change, market prices are less appropriate than the social cost of carbon in estimating the value of carbon sequestration and storage.…”

Section: Carbonmentioning

confidence: 99%

“…To value carbon storage, we used a set of conservative valuation assumptions ($22/ton social cost of carbon (2011 United States dollars), 7 percent discount rate, 0 percent rate of annual change in the value of carbon, median values from Tol's (2005Tol's ( , 2008) meta-analyses) and a set of nonconservative valuation assumptions ($89/ton social cost of carbon, 1 percent discount rate, 6 percent annual change in the value of carbon, for the most part based on Stern, 2007). The value of carbon and the assumptions that go into these estimates are debated in the literature, and even high values may underestimate the social cost of carbon (Ackerman and Stanton, 2012). However, these estimates do provide defensible high and low values.…”

Section: Follow-up Studiesmentioning

confidence: 99%

Ecosystem services valuation to support decisionmaking on public lands—A case study of the San Pedro River watershed, Arizona

Bagstad¹,

Semmens²,

Winthrop³

et al. 2012

Scientific Investigations Report

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Willingness to Pay Scenario Carbon sequestration and storage Water supply Biodiversity (habitat quality) Aesthetic viewsheds Proximity to open space Recreation Urban growth Loss Loss Loss Gain Gain Loss. Mesquite management Loss Gain Gain Water augmentation Gain. service valuation is useful only if it improves the ability to identify the tradeoffs between alternative management actions facing decisionmakers. From the outset of the project, Gila District and San Pedro Riparian National Conservation Area managers and staff were involved with defining the direction of the analysis. Ecosystem Services Analyzed On the basis of stakeholder discussions at the project kickoff meeting held in Tucson, Ariz., in January 2010, broad categories of ecosystem services of interest were identified for the San Pedro River watershed. Participants sought to specify concrete economic benefits and beneficiaries relevant to these broad classes of ecosystem services, as described below for each broad group of services. Ecological "endpoints"-the Management issues Broad Specific Water Water quality. Water quantity. Surface and groundwater flows from Mexico: quality and quantity. Biodiversity Nonnative species. Threatened and endangered species recovery. Preserving biodiversity. Cultural Cultural site protection (for example, Murray Springs Clovis site). Rural character and lifestyle. American Indian treaty and trust responsibilities. International border Undocumented immigrants. Border safety. Recreation Managing recreational demand. Hunting and game management. Multiple-use demand. Ecological process management Soil conservation. Grassland preservation and erosion control. Forage and range provision. Wildfire management. Habitat connectivity and corridors. Growth and change Climate change. Urban growth.

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Climate Risks and Carbon Prices: Revising the Social Cost of Carbon

Cited by 62 publications

References 16 publications

Solar PV as a mitigation strategy for the US education sector

Solar PV as a mitigation strategy for the US education sector

Why the social cost of carbon will always be disputed

Ecosystem services valuation to support decisionmaking on public lands—A case study of the San Pedro River watershed, Arizona

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