Is C02 Mitigation Cost-Effective?

By | August 27, 2012



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[Illustrations, footnotes and references available in PDF version]

This note, prepared for distinguished scientific delegates at the 2012 annual seminars on planetary emergencies of the World Federation of Scientists, demonstrates the application of a much-simplified method of climate-mitigation investment appraisal to the recently-introduced Australian carbon dioxide tax. For the first time, mainstream climatological and economic-appraisal approaches are combined in a simple but robust appraisal method. The $130 bn cost of the Australian carbon tax (Parliament of Australia, 2011) over the intended ten-year term is compared with its benefit in the cost of warming-related damage avoided by successful implementation and the consequent intended 5% cut in Australia’s emissions. A zero inter-temporal discount rate is assumed. The minimum market rate would be 5% (Murphy et al., 2008). The calculations are made explicit.

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