I agree that climate modelling is very uncertain, but we should not throw out the baby with the bathwater.
Quote from my analysis above:
“one study estimated a lower bound of the global social cost of carbon at US$125 and argues that:
“Quantifying the true SCC value is complicated because of various difficult-to-quantify damage cost categories and the interaction of discounting, uncertainty, large damages and risk aversion [...] The best that can be offered is a lower bound based comes from a conservative meta-estimate that aggregates studies using high and low discount rates, it does not account for various climate change damages owing to a lack of reliable information, and it does not consider a minimax regret argument addressing damages associated with extreme climate change.”
Also, as an aside, outside of prioritization, for optimal policy (e.g. carbon pricing) the social cost of carbon should be:
Set to the marginal abatement cost, which can be optimal and easier to estimate.[17] or
Set to err on the side of overestimating externalities[18] (while reducing other non-Pigovian taxes).”
I now include more optimistic estimates (in the sense that the SSC won’t be that high) in my sensitivity analysis.
I agree that climate modelling is very uncertain, but we should not throw out the baby with the bathwater.
Quote from my analysis above:
“one study estimated a lower bound of the global social cost of carbon at US$125 and argues that:
“Quantifying the true SCC value is complicated because of various difficult-to-quantify damage cost categories and the interaction of discounting, uncertainty, large damages and risk aversion [...] The best that can be offered is a lower bound based comes from a conservative meta-estimate that aggregates studies using high and low discount rates, it does not account for various climate change damages owing to a lack of reliable information, and it does not consider a minimax regret argument addressing damages associated with extreme climate change.”
Also, as an aside, outside of prioritization, for optimal policy (e.g. carbon pricing) the social cost of carbon should be:
Set to the marginal abatement cost, which can be optimal and easier to estimate.[17] or
Set to err on the side of overestimating externalities[18] (while reducing other non-Pigovian taxes).”
I now include more optimistic estimates (in the sense that the SSC won’t be that high) in my sensitivity analysis.