Optimal carbon emissions and the social cost of carbon over time under uncertainty

Abstract

This paper uses the PAGE2002 model to find the path of CO2 emissions that minimises the mean sum of the uncertain impacts of climate change plus the uncertain abatement costs, as well as the social cost of carbon under a variety of emission scenarios, including the optimal path. Compared to year 2000 emissions, optimal emissions are 34% higher in 2020, fall below year 2000 emissions in approximately 2050 and are 88% lower in 2100. Today's social cost of carbon is fairly insensitive to the exact scenario; its mean value is $14 per tonne of carbon under the business as usual scenario, and $12 under the optimal scenario, with 90% confidence intervals of about $3-40 (all in $US 1995). The mean SCC increases at about 3.2% per year in the optimal scenario.