On the Uncertainty About the Total Economic Impact of Climate Change

• Published in: Environmental & resource economics Vol. 53; no. 1; pp. 97 - 116
• Main Author: Tol, Richard S. J.
• Format: Journal Article
• Language: English
• Published: Dordrecht Springer Netherlands 01-09-2012; Springer Nature B.V
• Subjects: Carbon; Carbon emissions; Climate change; Economic impact; Economic impact analysis; Economic Policy; Economics; Economics and Finance; Emissions; Environmental Economics; Environmental impact; Environmental impact studies; Environmental Law/Policy/Ecojustice; Environmental Management; Estimates; Expected values; Expenditures; Experiments; Global warming; Greenhouse effect; Meta-analysis; Probability; Sea level; Social costs; Studies; Climate change; Q54; Economic impact; Meta-analysis; Social cost of carbon
• ISSN: 0924-6460; 1573-1502
• DOI: 10.1007/s10640-012-9549-3

This paper uses a vote-counting procedure to estimate the probability density function of the total economic impact as a parabolic function of global warming. There is a wide range of uncertainty about the impact of climate change up to 3°C, and the information becomes progressively more diffuse beyond that. Warming greater than 3°C most likely has net negative impacts, and warming greater than 7°C may lead to a total welfare loss. The expected value of the social cost of carbon is about $29/tC in 2015 and rises at roughly 2% per year.