Matthew D. Adler (Duke University School of Law), David Anthoff (University of California, Berkeley – Energy and Resources Group), Valentina Bosetti (Fondazione Eni Enrico Mattei (FEEM); Bocconi University; CMCC – Euro Mediterranean Centre for Climate Change), Gregory Garner (Pennsylvania State University), Klaus Keller (Pennsylvania State University), Nicolas Treich (University of Toulouse 1 – Toulouse School of Economics (TSE)) have posted Priority for the Worse off and the Social Cost of Carbon on SSRN. Here is the abstract:
The social cost of carbon (SCC) is a monetary measure of the harms from carbon emission. Specifically, it is the reduction in current consumption that produces a loss in social welfare equivalent to that caused by the emission of a ton of CO2. The standard approach is to calculate the SCC using a discounted-utilitarian social welfare function (SWF) — one that simply adds up the well-being numbers (utilities) of individuals, as discounted by a weighting factor that decreases with time. The discounted-utilitarian SWF has been criticized both for ignoring the distribution of well-being, and for including an arbitrary preference for earlier generations. Here, we use a prioritarian SWF, with no time-discount factor, to calculate the SCC in the integrated assessment model RICE. Prioritarianism is a well-developed concept in ethics and theoretical welfare economics, but has been, thus far, little used in climate scholarship. The core idea is to give greater weight to well-being changes affecting worse off individuals. We find substantial differences between the discounted-utilitarian and non-discounted prioritarian SCC.
Highly recommended.