Munich Personal RePEc Archive

Climate change: discount or not? future generations don't care that much.

Belgodere, Antoine (2010): Climate change: discount or not? future generations don't care that much.

[img]
Preview
PDF
MPRA_paper_27358.pdf

Download (551Kb) | Preview

Abstract

This paper proposes a new way to model the cost of climate change, based on a vintage capital modeling. Climate change destroys capital, according to the difference between the current climate and the climate that prevailed when a given durable was built. This assumption is meant to account for the adaptation of economic agents to the changing climate. The main result is that the carbon tax is much less sensitive to the rate of time preference than in the Stern-Nordhaus controversy. Moreover, despite an estimate of the cost in line with Nordhaus' estimate for the 21st century, we find an optimal carbon tax much lower than his one.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.