The Marginal Costs of Carbon Dioxide Emissions: an Assessment of the Uncertainties

88 estimates of the marginal costs of carbon dioxide emissions were gathered from 22 published studies and combined to form a probability density function. The uncertainty is strongly rightskewed. If all studies are combined, the mode is $5/tC, the mean $104/tC, and the 95 percentile $446/tC. Studies with a lower discount rate have higher estimates and a much greater uncertainties. Similarly, studies, which use equity weighing, have higher estimates and larger uncertainties. Interestingly, studies that are peer-reviewed have lower estimates and smaller uncertainties. Using standard assumptions about discounting and aggregation, the marginal costs of carbon dioxide emissions unlikely to exceed $50/tC, and probably much smaller.