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School of Business, Örebro University Working Papers, School of Business, Örebro University

No 2012:3:
Temporal Aspects of the Social Cost of Greenhouse Gases

Disa Thureson () and Chris Hope ()

Abstract: The purpose of this study is to investigate the temporal aspects of the social cost of greenhouse gases. We are particularly interested in the interaction between time of emissions, discounting and type of greenhouse gas (where different greenhouse gases have different atmospheric life time). We show graphically how the social costs of greenhouse gases (GHGs) depend on different parameter values and how the global damage potential for methane and sulfur hexafluoride evolves over time. We find that that the calculation period ultimately should be modeled to be consistent with the discount rate and that the “globalwarming potential” concept is unsuitable for calculation of the social cost of other GHG than carbon dioxide.

Keywords: Cost benefit analysis; Discount rates; Emissions pricing; Global warming potential; (follow links to similar papers)

JEL-Codes: Q54; (follow links to similar papers)

14 pages, February 27, 2012, Revised September 4, 2012

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