The Impacts and Costs of Climate Change Page: 28
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The Impacts and Costs of Climate Change
The project has undertaken a rapid review of the estimates of the monetary impacts of climate change.
A number of approaches have been used to assess the total and the marginal global costs (social costs)
of greenhouse gas emissions30. These estimates can be used to investigate the benefits of future
climate change policy, and can be compared to the costs of greenhouse gas mitigation. The study has
also commissioned a number of specific runs with some of the climate change valuation models31, to
derive estimates of marginal and total costs from future climate change scenarios.
The marginal damages caused by carbon dioxide emissions were estimated in the IPCC Second
Assessment Report at US$5 - 125/tC (broadly equivalent to Euro 1 to 34/tCO2). More recent work
has arrived at essentially the same range of numbers, though with most estimates towards the lower
end of the range.
A number of recent reviews have presented the literature on the costs of climate change, e.g. Watkiss
et al, 2002; Downing and Watkiss, 2003; Tol 2004. The latter is the most recent comprehensive, and
has assessed the marginal social cost of greenhouse gas emissions from 28 studies in the literature32
(including peer reviewed studies and the grey literature). These studies provide 103 estimates (when
the best estimate and range is taken into account). The range of values is presented below.
Figure 5. Marginal social cost of greenhouse gas emissions from 28 studies
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year of publication
Source: Tol (2004). Note, one study from the early 1990s is excluded which has very high values (1800$/tC)
30 The marginal social cost is the damage from an additional tonne of CO2 emitted. Specifically, it is the change in the net
present value of the monetised impacts, normalised by the change in emissions. This should not be confused with the total
impact of climate change or the average impact (the total divided by the total emissions of carbon).
31 The models have been used to estimate marginal costs for increased emissions (run with and without additional pulses of
emissions), for comparison with marginal cost estimates for mitigation.
32 This work was undertaken by Richard Tol, and updated his meta-analysis of published studies. The Marginal Damage
Costs Of Carbon Dioxide Emissions: An Assessment Of The Uncertainties. Richard S.J. Tol. April 2004. Published in
AEA Technology Environment, August 2005
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Watkiss, Paul; Downing, Tom; Handley, Claire & Butterfield, Ruth. The Impacts and Costs of Climate Change, text, September 2005; Oxford, England. (digital.library.unt.edu/ark:/67531/metadc29337/m1/39/: accessed July 27, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; .