Working Paper: NBER ID: w27413
Authors: Niko Jaakkola; Antony Millner
Abstract: Disagreements about normative aspects of social time preferences have led to estimates of the Social Cost of Carbon (SCC) that differ by orders of magnitude. We investigate how disagreements about the SCC change if planners are non-dogmatic, i.e., they admit the possibility of a change in their normative views, and internalise the preferences of future selves. Although non-dogmatic planners may disagree about all the contentious aspects of social time preferences, disagreements about the SCC reduce dramatically. Admitting the possibility of a change in views once every 40 years results in a 4.6-fold reduction in the range of recommended SCCs.
Keywords: social cost of carbon; nondogmatism; social discounting
JEL Codes: D61; D63; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Nondogmatic social time preferences (D15) | Reduction in disagreement about the social cost of carbon (SCC) (H43) |
| Nondogmatic planners (P41) | Reduction in the range of SCC estimates (C29) |
| Nondogmatism (B41) | Decrease in perceived SCC values (C29) |
| Nondogmatism (B41) | Persistence of underlying welfare parameter disagreements (D69) |