I was about to say this and then saw your comment. My impression from the paper is the $417 is a sum of costs to different countries, and for each of them the cost is a present value to the people in that country, with discounting being applied based on the expected amount of economic growth in that country. So I don’t think it’s calibrated to present-day Americans, but I don’t think it’s calibrated to the world’s poorest either, and I agree the argument doesn’t go through.
There’s another problem with the quoted claim, which becomes clear if you pick a value like X = 1/1000. Paying $417,000 to avert a tonne of carbon is a huge net bad and not just a much smaller net good.
It seems to me another problem is that if the social cost of carbon comes from effects on growth, you have to compare that to the effects on growth of cash transfers. It’s generally easy for small changes in growth rate to outweigh small changes to level in the long run, so if you compare the growth effects of one intervention to the level effects of another intervention, it’s no surprise that the former would seem more effective.
I was about to say this and then saw your comment. My impression from the paper is the $417 is a sum of costs to different countries, and for each of them the cost is a present value to the people in that country, with discounting being applied based on the expected amount of economic growth in that country. So I don’t think it’s calibrated to present-day Americans, but I don’t think it’s calibrated to the world’s poorest either, and I agree the argument doesn’t go through.
There’s another problem with the quoted claim, which becomes clear if you pick a value like X = 1/1000. Paying $417,000 to avert a tonne of carbon is a huge net bad and not just a much smaller net good.
It seems to me another problem is that if the social cost of carbon comes from effects on growth, you have to compare that to the effects on growth of cash transfers. It’s generally easy for small changes in growth rate to outweigh small changes to level in the long run, so if you compare the growth effects of one intervention to the level effects of another intervention, it’s no surprise that the former would seem more effective.