Estimating the Social Cost of Carbon for Use in U.S. Federal Rulemakings: A Summary and Interpretation

Greenstone, Michael; Kopits, Elizabeth; Wolverton, Ann

doi:10.3386/w16913

Cited by 49 publications

(53 citation statements)

References 36 publications

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“…For sensitivity analysis, we will use the range from the EU carbon price, which we extend two-fold on the upper end (reflecting expectation of an increase in the price of carbon in the future), i.e., US$ 3.5-84. Note that our range includes the suggested SCC sensitivity range from [20]. With these estimates, the externality benefit from using a Volt is on average US$ 24.4 × 34.34 = 838, with a range of US$ 123-2900.…”

Section: A Parameter Estimationmentioning

confidence: 98%

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Coordinating Pricing and Supply of Public Interest Goods Using Government Rebates and Subsidies

Raz

Овчінніков

2015

IEEE Trans. Eng. Manage.

155

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This paper presents a stylized framework for analyzing the design of government incentives for public interest goods (goods with externalities, such as electric vehicles.) We extend the newsvendor model with pricing to account for the consumption externality inherent in public interest goods and analyze the governments ability to coordinate their pricing and supply through the use of rebates and subsidies. Our model allows for goods with both positive and negative externalities, and considers three government intervention mechanisms: the joint mechanism that uses both subsidies and rebates, and two simplified mechanisms that use only rebates or only subsidies. The goal of the intervention is to coordinate the system in order to achieve the maximal welfare, which in our model consists of the firms profit, consumer surplus, and externality benefit net the government cost. We find that the joint mechanism coordinates the system, but results in a negative subsidy (i.e., a tax) unless the externality is very small. The simplified mechanisms mostly result in positive rebates and subsidies, but generally do not coordinate the system. We apply our model to the case of Chevy Volt, a leading electric vehicle in North America manufactured by General Motors. We estimate all model parameters from industry data and present a comprehensive numerical study that compares the current government incentives with those suggested by our model. We find that while the current incentives are structurally suboptimal, the resultant welfare loss under the rebate-only mechanism is very small, while under the subsidy-only mechanism it is quite large.

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Section: A Parameter Estimationmentioning

confidence: 98%

“…One is to consider the social cost of carbon (SCC). Greenstone et al [20] estimated SCC to be US$ 21 per ton (in 2010 dollars) with the suggested range for sensitivity analysis of US$ 5-65. Nordhaus [31] estimated SCC to be US$ 12 (in 2005 dollars).…”

Section: A Parameter Estimationmentioning

confidence: 98%

Coordinating Pricing and Supply of Public Interest Goods Using Government Rebates and Subsidies

Raz

Овчінніков

2015

IEEE Trans. Eng. Manage.

155

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“…Carbon from cleared trees is not emitted instantaneously; we assume the average time from tree-clearing until CO 2 emissions is 10 years. The SCC is projected to rise over time at 1.9% per year (Greenstone, Kopits, and Wolverton, 2011;Interagency Working Group on Social Cost of Carbon, 2013). It rises because of growth in income per capita and population, and because the marginal damage from a ton of emissions is higher when climate change has progressed further, e.g., when global temperatures are higher (Nordhaus, 2014).…”

Section: Introductionmentioning

confidence: 99%

Cash for Carbon: A Randomized Controlled Trial of Payments for Ecosystem Services to Reduce Deforestation

Jayachandran¹,

Laat²,

Lambin³

et al. 2016

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This paper evaluates a Payments for Ecosystem Services (PES) program in western Uganda that offered forest-owning households cash payments if they conserved their forest. The program was implemented as a randomized trial in 121 villages, 60 of which received the program for two years. The PES program reduced deforestation and forest degradation: Tree cover, measured using high-resolution satellite imagery, declined by 2% to 5% in treatment villages compared to 7% to 10% in control villages during the study period. We find no evidence of shifting of treecutting to nearby land. We then use the estimated effect size and the "social cost of carbon" to value the delayed carbon dioxide emissions, and compare this benefit to the program's cost.1 behaviors (Ferraro and Kiss, 2002;Wunder, 2007;Engel, Pagiola, and Wunder, 2008). PES is the environmental version of a well-known policy instrument in developing countries, conditional cash transfers (CCTs), which are more commonly used to promote child health and education.Despite the widespread use and growing popularity of PES, its effectiveness and costeffectiveness are open questions. Individuals might be unresponsive to the incentives, leading to small impacts. In addition, even if some people respond to the incentives, cost-effectiveness could be low if, absent the payments, many participants would have engaged in the incentivized behavior anyway. In the case of PES, this problem of inframarginality is often called "additionality": How much additional forest cover does a PES program actually cause? Another concern is that individuals will simply shift their tree-cutting from land covered by the PES contract to other nearby land.This paper is a randomized evaluation of a PES intervention that was piloted precisely to measure the causal impacts on forest cover. The PES program offered private owners of forestland in western Uganda payments if they refrained from clearing trees. The program was designed and implemented by a local non-governmental organization (NGO). The study was carried out in 121 villages with private forest owners (PFOs); 60 of the villages were randomly selected to be in the treatment group. In treatment villages, the PES program was marketed to PFOs and they were eligible to enroll. Over the two-year pilot program from 2011 to 2013, for each hectare of forest they owned, enrollees received 70,000 Ugandan shillings (UGX), or $28 in 2012 US dollars, per year if they complied with the contract. 3 The implementing NGO employed forest monitors who conducted spot checks of enrollees' land to check for recent tree-clearing. The program also offered additional payments in exchange for planting tree seedlings.We measure the impact of the program on forest cover by analyzing satellite imagery.Specifically, we tasked a very high resolution commercial satellite, QuickBird, to take images of the study region at baseline and endline and classified each pixel as tree-covered or not 3 The average exchange rate during the study period was approximately 2500 UGX = 1 US ...

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“…The SCC, that is also called marginal social damage, represents the damage caused by one additional ton of carbon dioxide or equivalent substances. We chose this approach because of its diffusion in the academic and practitioner literature (Hope, 2008;Nordhaus, 2011;Ackerman and Stanton, 2012;Weitzman, 2013), as EPA and other federal agencies use it to assess the impact of policy decisions (Hazilla and Kopp, 1990;Greenstone et al, 2011Greenstone et al, , 2013Johnson and Hope, 2012). The reference to a well-known approach made its communication and justification with the store personnel easier.…”

Section: Emissionsmentioning

confidence: 99%

Linking environmental accounting to reward systems: the case of the Environmental Profit and Loss Account

Arena

Conte

2015

Journal of Cleaner Production

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This article aims to analyse how environmental accounting instruments can be linked to corporate reward systems for motivating a company's employees to embrace more environmentally friendly behaviours. To this aim, the paper focuses on a specific instrument – the Environmental Profit and Loss Account – that grounds on the idea of complementing the traditional profit and loss account by including figurative revenues and costs associated to the environmental impact of business activities. Based on the empirical evidence, derived from a multinational Do-It-Yourself retailing chain, the paper discusses how key design choices in the process of development of the Environmental Profit and Loss Account should be carried out to use this instrument as an input for the reward system and what problems and criticisms this choice implies. In so doing, the paper contributes to fill a gap in the state of the art literature that so far has given limited attention to the problem of linking environmental accounting instruments to corporate reward systems. Based on the case analysis, the paper concludes with some guidelines concerning the key aspects that should be taken into consideration for this prospect use: alignment with the company's strategy, definition of quantitative and common objectives, integration with other human resource practices, and possible connection to monetary rewards. Then, for each aspect, the paper discusses the rise of potential trade-offs between completeness and controllability of the included items, environmental and economic performance, cost and precision of the system itself

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Estimating the Social Cost of Carbon for Use in U.S. Federal Rulemakings: A Summary and Interpretation

Cited by 49 publications

References 36 publications

Coordinating Pricing and Supply of Public Interest Goods Using Government Rebates and Subsidies

Coordinating Pricing and Supply of Public Interest Goods Using Government Rebates and Subsidies

Cash for Carbon: A Randomized Controlled Trial of Payments for Ecosystem Services to Reduce Deforestation

Linking environmental accounting to reward systems: the case of the Environmental Profit and Loss Account

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