Economic Analysis of Projects in a Greenhouse World — page 1

Page 1 of 29 · Preview

Economic Analysis of Projects in a Greenhouse World — page 2

Page 2 of 29 · Preview

Economic Analysis of Projects in a Greenhouse World — page 3

Page 3 of 29 · Preview

Economic Analysis of Projects in a Greenhouse World — page 4

Page 4 of 29 · Preview

Economic Analysis of Projects in a Greenhouse World — page 5

Page 5 of 29 · Preview

Economic Analysis of Projects in a Greenhouse World — page 6

🛡

You have reached the preview limit

The free preview includes the first 6 pages of 29. Download the original document to read the full content.

⬇ Download document

Page 6 of 29 · End of preview

The full document has 29 pages. Downloads happen on the original source site.

Economic Analysis of Projects in a Greenhouse World

World Bank, Washington, DC

🛡CC BY 3.0 IGOPermitted use with attribution

pages: 29
Format: PDF
Size: 864.2 KB
Views: 0
Downloads: 0

↗Will open at the source site: World Bank Open Knowledge Repository

Source: World Bank Open Knowledge Repository ↗ · Report an issue

Shared byAarav Chatterjee›

Abstract

Recent carbon market prices are substantially lower than mean or median estimates of the social cost of carbon in the literature. Intuition would therefore suggest that 'investment errors' are being made, in the sense that markets favor higher carbon-emitting projects, while global welfare would be larger with lower carbon-emitting projects. This intuition is correct in specific circumstances, but not others. For any comparison of two alternative projects, there is a carbon switching price that equalizes their net social benefits. From the perspective of maximizing global welfare, investment errors only occur when this switching price lies between the carbon market price and the social cost of carbon. Data on the costs of high-carbon and low-carbon electric generation projects suggest that there is no financing gap using mean or median published figures, but for precautionary (95th percentile) choices of the social cost of carbon, there is a financing gap between carbon market prices and the switching price that would trigger investment in the global welfare-maximizing low-carbon project. A global carbon fund to finance this gap could be conceived, but stricter emission caps and reforms of carbon markets are likely to be a more efficient solution to the problem.

Related documents

Ghana : 2005 External Review of Public Financial Management, Volume 1, Main Report

Financial Inclusion, Productivity Shocks, and Consumption Volatility in Emerging Economies

Enhancing Smallholder Incomes by Linking to High Value Markets in Pakistan’s Punjab and Sindh Provinces

Risk Sharing in Labor Markets

Building Resilience to Disaster and Climate Change through Social Protection

Generative AI