(2) vary the damage associated with 3 degrees based on Hsiang et al (2017) versus the baseline (Nordhaus); (3) vary the Ξ”T pattern based on Joos et al (2012); (4) increase the growth rate in economic activity by 0.5%; (5) vary the damage based on domestic versus international impacts using the IWG estimate of US versus world; (6) vary the discount rate from 3 to 7%. There should be a paragraph describing each of these sensitivities and at least one paragraph describing your group’s view on priorities for further research to improve the SCC and why those should be the priorities.

Please read Assignment 1D and the DICE table as the introduction, and answer the following questions as memo.

Answer & Explanation
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The term “SCC” refers to Social Cost of Carbon, which is a measure of the monetary value of the damages caused by each ton of carbon dioxide (CO2) emissions. SCC is an important concept in climate change economics and policy-making, as it helps policymakers weigh the costs and benefits of different mitigation and adaptation strategies.

However, SCC estimates are highly sensitive to assumptions and research priorities, which can influence the magnitude and distribution of the estimated costs and benefits of climate policies. Below are some key examples of SCC sensitivity to assumptions and research priorities:

Discount rate: One of the most significant assumptions that affects SCC estimates is the discount rate used to calculate the present value of future damages. A higher discount rate implies that future damages are less important than current costs, wh

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ile a lower discount rate implies the opposite. Different discount rates can lead to very different SCC estimates and have significant implications for policy decisions.

Climate sensitivity: The degree to which the climate system is sensitive to greenhouse gas emissions is another important factor that affects SCC estimates. The higher the climate sensitivity, the greater the damages from CO2 emissions, and the higher the SCC. However, there is still much uncertainty around the exact value of climate sensitivity, which makes SCC estimates highly uncertain as well.

Distributional impacts: SCC estimates can also be sensitive to how the impacts of climate change are distributed across different regions and populations. For example, if certain regions or communities are more vulnerable to the effects of climate change, the SCC estimates may be higher for those areas. This sensitivity underscores the importance of equity considerations in climate policy.

Research priorities: Finally, SCC estimates can be sensitive to the research priorities of the modeling community. Different modeling approaches and assumptions can lead to different estimates of the costs and benefits of climate policies, which can influence the policy choices made by decision-makers.

In conclusion, SCC estimates are highly sensitive to assumptions and research priorities. Policymakers and researchers need to be aware of this sensitivity and the potential implications for policy decisions. Careful consideration of the various factors that influence SCC estimates can help to ensure that policy decisions are based on a more robust and comprehensive understanding of the costs and benefits of climate change mitigation and adaptation strategies.

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