Cost-benefit analysis is an important tool for decisions in infrastructure and transport planning. One effect that is calculated in cost benefit analysis is climate effects and for this it is necessary to make valuation of the social cost of carbon. There are different ways to calculate this cost and there is no consensus on what method to use. In Sweden the social cost of carbon that is used i...

AIM (Asian-Pacific Integrated Model) has been developed for predicting greenhouse gas emissions and evaluating policy measures to reduce them. Two socio-economic scenarios were assumed and CO2 emissions were predicted based on these scenarios and policy intervention assumptions. It is found that mitigating CO2 emissions by 6% to the 1990 level without scaling back productive activities or stand...

A carbon tax would penalize carbon intensive fuels like gasoline and shift fuel consumption to less carbon intensive alternatives like biofuels. Since biofuel production competes for land with agriculture, a carbon tax could raise land rents, divert land towards fuel production, and raise agricultural prices. This paper analyzes the welfare effect of a carbon tax on fuel with gasoline and biofu...

This paper distinguishes relative risk aversion and resistance to intertemporal substitution in climate risk modeling. Stochastic recursive preferences are introduced in a stylized numeric climate-economy model using preliminary IPCC 1998 scenarios. It shows that higher risk aversion increases the optimal carbon tax. Higher resistance to intertemporal substitution alone has the same effect as i...

We use a model of domestic and international tourist numbers and flows to estimate the impact of the recent and proposed changes in the Air Passenger Duty (APD) of the United Kingdom. We look at four different scenarios (abolishing the APD, keeping the 2001 APD level, the 2007 APD and the Conservative Party’s ‘‘Green Miles’’ proposal) using base, high and very high elasticity levels as well as ...

This paper determines a firm’s profit-maximizing R&D response to an uncertain carbon tax, for two different R&D programs: cost reduction of low carbon energy technologies and emissions reductions of currently economic technologies. We find that optimal R&D does not increase monotonically in a carbon tax. R&D into alternative technologies increases only if the firm is flexible enough; R&D into c...