The damage costs of climate change: a note on tangibles and intangibles, applied to DICE

Richard S.J. Tol*

*Corresponding author for this work

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Economic cost-benefit analysis of the costs of greenhouse gas emission abatement and climate change often points towards limited abatement. This note elucidates one reason why this result is obtained: the way in which the intangible damages are treated and the utility function is specified. On the basis of the DICE model, it is shown that by putting the intangible damages directly into the utility function, and by assuming them to grow with per capita income, the optimal reduction increases, and in the second case more than triples, compared to Nordhaus's original results.

Original languageEnglish
Pages (from-to)436-438
Number of pages3
JournalEnergy Policy
Volume22
Issue number5
DOIs
Publication statusPublished - May 1994

Bibliographical note

Funding Information:
The helpful discussions with Tsjalle van der Burg, Huib Jansen, Fons Groot, Reyer Gerlagh, Pier Vellinga and Harmen Verbruggen, and the partial funding by the Dutch National Research Programme: Global Air Pollution and Climate Change are gratefully acknowledged.

Copyright:
Copyright 2019 Elsevier B.V., All rights reserved.

Keywords

  • Climate change
  • Cost-benefit
  • Emission abatement

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