Link to the University of Pittsburgh
Link to the University Library SystemContact us link
AEI Banner

A Cost-Benefit Analysis of the EU 20/20/2020 Package. ESRI WP367. January 2011

Tol, Richard S.J. (2011) A Cost-Benefit Analysis of the EU 20/20/2020 Package. ESRI WP367. January 2011. [Working Paper]

[img] PDF - Published Version
Download (366Kb)

    Abstract

    The European Commission did not publish a cost-benefit analysis for its 2020 climate package. This paper fills that gap, comparing the marginal costs and benefits of greenhouse gas emission reduction. The uncertainty about the marginal costs of climate change is large and skewed, and estimates partly reflect ethical choices (e.g., the discount rate). The 2010 carbon price in the ETS can readily be justified by a cost-benefit analysis. Emission reduction is not expensive provided that policy is well-designed, a condition not met by planned EU policy. It is probably twice as expensive as needed, costing one in ten years of economic growth. The EU targets for 2020 are unlikely to meet the benefit-cost test. For a standard discount rate, the benefit-cost ratio is rather poor (1/30). Only a very low discount rate would justify the 20% emission reduction target for 2020.

    Export/Citation:EndNote | BibTeX | Dublin Core | ASCII (Chicago style) | HTML Citation | OpenURL
    Social Networking:
    Item Type: Working Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > environmental policy (including international arena)
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Economic and Social Research Institute (ESRI), Dublin > ESRI Working Papers
    Depositing User: Alyssa McDonald
    Official EU Document: No
    Language: English
    Date Deposited: 24 Oct 2019 13:50
    Number of Pages: 38
    Last Modified: 24 Oct 2019 13:50
    URI: http://aei.pitt.edu/id/eprint/87913

    Actions (login required)

    View Item

    Document Downloads