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Time Preference, Abatement Costs, and International Climate Policy: An Appraisal of IPCC 1995

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  • Khanna, Neha
  • Chapman, Duane

Abstract

This paper appraises current economic methodologies used in analyzing the social rate of time preference and discounting, abatement costs, and value of life estimates as they relate to climate change. It makes a case for choosing an appropriate rate of time preference when assessing climate policies, including both positive and normative considerations. Furthermore, the paper argues that the currently estimated disparity in the cost of greenhouse gas abatement between developed countries and developing countries may be inaccurate. Integrating discount rates, abatement costs, and value of life estimates highlights important and contrasting implications of international climate policy for developing and high‐income countries. The context of the paper is the forthcoming Second Assessment Report of Working Group III of the Intergovernmental Panel on Climate Change.
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Suggested Citation

  • Khanna, Neha & Chapman, Duane, 1995. "Time Preference, Abatement Costs, and International Climate Policy: An Appraisal of IPCC 1995," Working Papers 127997, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudawp:127997
    DOI: 10.22004/ag.econ.127997
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    File URL: https://ageconsearch.umn.edu/record/127997/files/Cornell_Dyson_wp9511.pdf
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    References listed on IDEAS

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    1. Duane Chapman & Thomas Drennen, 1990. "Equity And Effectiveness Of Possible Co2 Treaty Proposals," Contemporary Economic Policy, Western Economic Association International, vol. 8(3), pages 16-28, July.
    2. Marini Giancarlo & Scaramozzino Pasquale, 1995. "Overlapping Generations and Environmental Control," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 64-77, July.
    3. Conrad, Jon M., 1995. "Global Warming: When to Bite the Bullet," Working Papers 127957, Cornell University, Department of Applied Economics and Management.
    4. Duane Chapman & Vivek Suri & Steven G. Hall, 1995. "Rolling Dice For The Future Of The Planet," Contemporary Economic Policy, Western Economic Association International, vol. 13(3), pages 1-9, July.
    5. Burton Peter S., 1993. "Intertemporal Preferences and Intergenerational Equity Considerations in Optimal Resource Harvesting," Journal of Environmental Economics and Management, Elsevier, vol. 24(2), pages 119-132, March.
    6. Otto Eckstein, 1957. "Investment Criteria for Economic Development and the Theory of Intertemporal Welfare Economics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 71(1), pages 56-85.
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    Cited by:

    1. Chukwumerije Okereke, 2017. "A six-component model for assessing procedural fairness in the Intergovernmental Panel on Climate Change (IPCC)," Climatic Change, Springer, vol. 145(3), pages 509-522, December.
    2. Schultz, Peter A & Kasting, James F, 1997. "Optimal reductions in CO2 emissions," Energy Policy, Elsevier, vol. 25(5), pages 491-500, April.
    3. Barron, Eric & Chapman, Duane & Khanna, Neha & Rose, Adam Z. & Schultz, Peter A. & Kasting, James F., 1996. "Penn State -Cornell Integrated Assessment Model," Working Papers 127929, Cornell University, Department of Applied Economics and Management.
    4. Mount, Timothy D. & Chapman, Duane & Khanna, Neha, 1997. "An Exploration of the Differences in National Growth: Some Implications for Future Environmental Policy," Working Papers 127886, Cornell University, Department of Applied Economics and Management.
    5. Khanna, Neha & Chapman, Duane, 1997. "Climate Policy And Petroleum Depletion," Working Papers 127811, Cornell University, Department of Applied Economics and Management.

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