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Table 2 Calibration details

From: The safe carbon budget

Parameters needed for calculation of the safe carbon budget (3)
Mean transient climate response to cumulative emissions, TCRE = 2 °C/TtC, α = 1.276 °C
Variance of the lognormal shock to the TCRE, σ = 0.25
Target for peak global warming, 2 °C
Risk tolerance, 1 − β = 0.1
Growth rate in world GDP, g = 2% per year
Parameters needed for cost minimization:
Energy use per unit of world GDP, γ = 0.14 GtC/T$, r γ  = 0% per year
Fossil fuel cost, G0 = 515 $/tC, r F  = − 0.1% per year
Renewable energy cost, H0 = 515 $/tC, H1 = 1150 $/tC, θ m  = 2.8,ε m  = 0.55, r R  = 1.25%/year
Abatement (CCS) cost A1 = 2936 $/tC, θ a  = 2 soε a  = 1, r A  = 1.25% per year
Parameters needed for calculation of the welfare-maximizing carbon price
 (a) Intergenerational ethics and global warming damages:
Rate of time patience, RTI = 1.5% per annum
Intergenerational inequality aversion, IIA = 1.45
Projected real interest rate, RTI + IIA×g = 4.4% per year
Growth-corrected social discount rate, SDR = RTI + (IIA− 1) ×g = 2.4% per year
Damage of global warming of carbon in atmosphere, d = 1.9% of world GDP per TtC
 (b) Geo-physical:
Time lag between temperature response and carbon concentration = Tlag = 10 years
Fraction of carbon emissions that stays up permanently in the atmosphere = β0 = 20%
Rate at which remaining carbon returns to the ocean and the earth = β1 = 0.0023
  1. The renewable energy cost and abatement cost functions are given in Appendix A2