Monday, April 9, 2007

Marginal Costs of CO2

I've been investigating the marginal costs of CO2 emissions. This is the best paper I have found so far on the matter; it summarizes 88 different marginal cost estimates for CO2 emissions, and discusses the problems associated with the estimates. The aggregated estimates have very large uncertainties because the original estimates differ a lot and because most estimates had very large uncertainties themselves.

Atmospheric scientist Richard S. Lindzen has an article questioning how much we know about the net effects of global warming. The two most interesting quotes from his article:
There is no compelling evidence that the warming trend we've seen will amount to anything close to catastrophe.
the impact of carbon on temperature goes down—not up—the more carbon accumulates in the atmosphere
It is interesting that Lindzen claims we don't know enough about the net effects of global warming even as marginal costs are estimated. Both the summary paper and Lindzen note that climate change has both positive and negative effects, depending on location, which makes the net effects difficult to estimate and may explain the difference.

The second statement almost means that marginal costs are downward sloping. The marginal effects of increased temperature may still be increasing, but if this is true, then at some CO2 concentration we should not try to limit CO2 emissions any more.

From Environmental Economics I have found out about the Wall-Street Journal Energy Round-Up blog which seems to be very useful in finding out what's going on on energy related environmental matters. Some of the other blogs the WSJ hosts also look promising.

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