Abstract
Language | English |
---|---|
Article number | 2011-21 |
Number of pages | 26 |
Journal | Energy Review Quarterly |
Volume | 5 |
DOIs | |
Publication status | Published - 2011 |
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Keywords
- climate change
- greenhouse gas emissions
- risk premium
Cite this
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Risk premia and the social cost of carbon : a review. / Kousky, Carolyn; Kopp, Robert; Cooke, Roger M.
Vol. 5, 2011-21, 2011.Research output: Contribution to journal › Article
TY - JOUR
T1 - Risk premia and the social cost of carbon
T2 - a review
AU - Kousky, Carolyn
AU - Kopp, Robert
AU - Cooke, Roger M
PY - 2011
Y1 - 2011
N2 - Reducing greenhouse gas emissions not only lowers expected damages from climate change but also reduces the risk of catastrophic impacts. However, estimates of the social cost of carbon, which measures the marginal value of carbon dioxide abatement, often do not capture this risk reduction benefit. Risk-averse individuals are willing to pay a risk premium, an additional amount beyond the difference in expected damages, to reduce risks. The authors review methods used and estimates obtained for calculating a risk premium to be included in the social cost of carbon. While more research is needed in this area, work to date suggests a positive, and potentially substantial, risk premium on the social cost of carbon is warranted.
AB - Reducing greenhouse gas emissions not only lowers expected damages from climate change but also reduces the risk of catastrophic impacts. However, estimates of the social cost of carbon, which measures the marginal value of carbon dioxide abatement, often do not capture this risk reduction benefit. Risk-averse individuals are willing to pay a risk premium, an additional amount beyond the difference in expected damages, to reduce risks. The authors review methods used and estimates obtained for calculating a risk premium to be included in the social cost of carbon. While more research is needed in this area, work to date suggests a positive, and potentially substantial, risk premium on the social cost of carbon is warranted.
KW - climate change
KW - greenhouse gas emissions
KW - risk premium
UR - http://www.economics-ejournal.org/
U2 - http://dx.doi.org/10.5018/economics-ejournal.ja.2011-21
DO - http://dx.doi.org/10.5018/economics-ejournal.ja.2011-21
M3 - Article
VL - 5
M1 - 2011-21
ER -