User:Ja9young/sandbox

Peer Review by Colby

For the portion Jeremy edited.

Overall good, maybe could add the comparison about how I think it was microsoft puts a low price on carbon compared to exxon or shell.

For the portion edited by Rahul and Meredith.

Written well, the only thing I would change is maybe the wording of the some of the portions that mention estimates. Only because it appears less encyclopedic.

For the portion edited by Janine

Probably should remove, to elaborate on.

The whole paragraph comes off more as a case study, rather than encyclopedic information. Wikipedia generally doesn’t usually contain hypothetical examples in my experience.

Peer Review by Areidy:

Overall, the article edits are good. They remain neutral. I particularly like how you added the DICE model when the Carbon Tax original article primarily focused on Stern and the low-discount rate he proposed. The level of discounting is uncertain so presenting both viewpoints is essential for readers to gain an holistic understanding. You should also mention this in the second article you are editing. Make sure that you clearly define new concepts you are presenting if you cannot link them to a current Wikipedia page (i.e ‘Internal price on carbon’).

''Although the United States does not currently implement a carbon tax, many American corporations have set the precedent on setting an “internal price on carbon”. Companies calculate this internal price to assess the risk value of future projects when making economic investment decisions. Companies usually assess a higher internal price when i) the company emits large amounts of CO2, and ii) when the company projects further into the future.''

Edited by Jeremy

Suggestion: Jeremy, you introduce the concept of “internal price on carbon” but do not clearly define it. You go straight into mentioning that companies “calculate this internal price” but how? Assume that the person reading this wiki page had never heard of “internal price on carbon”. Also, what is your source for this? Where is this information coming from?

1)    Clarify/ further define “internal price on carbon”

2)    Add your source/ reference.

Example definition:

“An internal carbon tax: a levy that companies voluntarily apply to their operations and that increases operating costs depending on the resulting greenhouse gas emissions; the company then uses the proceeds of this tax as it sees fit.”

Source: http://www.i4ce.org/wp-core/wp-content/uploads/2016/09/internal-carbon-pricing-november-2016-ENG.pdf

''Assumptions are made to support estimating high and low discount rates. These estimates depend on future emissions, climate sensitivity relative to increase in greenhouse gas concentrations, and the seriousness of impacts over time.[20] Policies designed to address long-term environmental problems will significantly impact future generations, this is called intergenerational discounting. There are three factors that makes intergenerational discounting complicated: (1) the "investment horizon" is longer than what is reflected in observed interest rates that are used to guide private discounting decisions, (2) future generations have no say on today's policies, and (3) there is great uncertainty regarding economic growth.[21]''

Edited by Janine

Suggestions: Is “no” a typo?

The Economics of climate change mitigation: Discount rates page does not mention the DICE model or IAMs. I think these concepts are important to include in this page even if it may seem repetitive since you mentioned them in the Carbon Tax Wikipedia page. Also, the debate between Stern and Nordhaus is important. This debate brings to light one of the greatest challenges posed by climate change- the traditional economic models based on the belief that growth yields greater economic prosperity is no longer suitable to deal with the challenges presented by global climate change and the biophysical limits which restrain our current perception of growth.

Hope this helps!

-Areidy

Hello, welcome to my page!

I'm part of a group that will be focusing on the social cost of carbon. My groupmates are Meredith, Jeremy and Rahul.

Wikipedia pages we will be working on:

 * https://en.wikipedia.org/wiki/Carbon_tax#United_States
 * https://en.wikipedia.org/wiki/Carbon_tax#Social_cost_of_carbon
 * https://en.wikipedia.org/wiki/Economics_of_climate_change_mitigation#Discount_rates

In carbon tax page under United States tab

 * We will talk about the internal price of carbon used by companies in the United States.
 * Companies in the United States use their own cost of carbon to anticipate future government regulations which may levy an internal price of carbon on their business while planning their operations
 * Timeline of how social cost of carbon is being implemented in the United States.

In carbon tax page under social cost of carbon tab

 * We will talk about the Dynamic Integrated Climate Economy Model (DICE)
 * We hope to connect the DICE model and its implications to how countries set the social cost of carbon

In economics of climate change mitigation page under discount rates tab

 * Elaborate more on what a high and low discount rate entails.
 * Effect on current and future generations
 * Assumptions made to support a high or low discount rate.

Bibliography:

 * https://www.cdp.net/en/campaigns/commit-to-action/price-on-carbon
 * https://www.scientificamerican.com/article/will-trumps-climate-team-accept-any-social-cost-of-carbon/
 * https://www.epa.gov/climatechange/social-cost-carbon
 * http://www.pnas.org/content/114/7/1518.full
 * https://www.carbonbrief.org/qa-social-cost-carbon
 * https://www.brookings.edu/testimonies/the-social-costs-of-carbon/
 * http://grist.org/article/discount-rates-a-boring-thing-you-should-know-about-with-otters

Ja9young (talk) 19:40, 18 April 2017 (UTC)

Discount rates
Assessing climate change impacts and mitigation policies involves a comparison of economic flows that occur in different points in time. The discount rate is used by economists to compare economic effects occurring at different times. Discounting converts future economic impacts into their present-day value. The discount rate is generally positive because resources invested today can, on average, be transformed into more resources later. If climate change mitigation is viewed as an investment, then the return on investment can be used to decide how much should be spent on mitigation.

The choice of discount rate has a large effect on the result of any climate change cost analysis (Halsnæs et al.., 2007:136). Using too high a discount rate will result in too little investment in mitigation, but using too low a rate will result in too much investment in mitigation.

Discounting can either be prescriptive or descriptive. The descriptive approach is based on what discount rates are observed in the behaviour of people making every day decisions (the private discount rate) (IPCC, 2007c:813). In the prescriptive approach, a discount rate is chosen based on what is thought to be in the best interests of future generations (the social discount rate).

The descriptive approach can be interpreted as an effort to maximize the economic resources available to future generations, allowing them to decide how to use those resources (Arrow et al., 1996b:133-134). The prescriptive approach can be interpreted as an effort to do as much as is economically justified to reduce the risk of climate change.

According to Markandya et al.. (2001:466), discount rates used in assessing mitigation programmes need to at least partly reflect the opportunity costs of capital. In developed countries, Markandya et al.. (2001:466) thought that a discount rate of around 4%-6% was probably justified, while in developing countries, a rate of 10%-12% was cited. The discount rates used in assessing private projects were found to be higher – with potential rates of between 10% and 25%.

When deciding how to discount future climate change impacts, value judgements are necessary (Arrow et al.., 1996b:130). IPCC (2001a:9) found that there was no consensus on the use of long-term discount rates in this area. The prescriptive approach to discounting leads to long-term discount rates of 2-3% in real terms, while the descriptive approach leads to rates of at least 4% after tax - sometimes much higher (Halsnæs et al.., 2007:136).

Carbon tax: United States
According to the Carbon Tax Center, the United States is one of the few large and industrialized nations on Earth that does not implement a Carbon tax. One simple solution being considered is to implement a federal carbon emissions tax, instead of relying on states to enforce their own. According to economists a tax would be the simplest and the easiest way to reduce emissions since, primarily, it seems like a plan both parties can get behind since it would not impose strict regulations on business, instead allowing the industries to self regulate, while also a showing that the government is taking steps to protect the environment. Furthermore, a tax would lead both producers and consumers to adjust their respective habits accordingly, and in ways that may become more efficient. ~ There is also a national movement called Citizens' Climate Lobby to create support across parties to put a national price on Carbon.

Although the United States does not currently implement a carbon tax, many American corporations have set the precedent on setting an “internal price on carbon”. Companies calculate this internal price to assess the risk value of future projects when making economic investment decisions. Companies usually assess a higher internal price when i) the company emits large amounts of CO2, and ii) when the company projects further into the future.

Edited by Jeremy

Carbon tax: Social cost of carbon
The social cost of carbon (SCC) is the marginal cost of the impacts caused by emitting one extra tonne of carbon (as carbon dioxide) at any point in time, inclusive of ‘non-market’ impacts on the environment and human health. The concept of a social cost of carbon was first mooted by the Reagan administration in 1981. The initial purpose of putting a price on a ton of emitted CO2 was to aid policymakers in evaluating whether a policy designed to curb climate change is justified. An intuitive way of looking at this is as follows: if the price of carbon is $50 per tonne in 2030, and we currently have a technology that can reduce emissions by 1 million metric tonnes in 2030, then any investment amount below $50 million would make economic sense, while any amount over that would lead us to consider investing the money somewhere else, and paying to reduce emissions in 2030.

Calculating the SCC requires estimating the residence time of carbon dioxide in the atmosphere, along with estimating the impacts of climate change. The impact of the extra tonne of carbon dioxide in the atmosphere must then be converted to the equivalent impacts when the tonne of carbon dioxide was emitted. In economics, comparing impacts over time requires a discount rate. This rate determines the weight placed on impacts occurring at different times.

Best estimates of the SCC come from Integrated Assessment Models (IAM) which predict the effects of climate change under various scenarios and allow for calculation of monetized damages. One of the most widely used IAMs is the Dynamic Integrated model of Climate and the Economy (DICE).

The DICE model, developed by William Nordhaus, makes provisions for the calculation of a social cost of carbon. The DICE model defines the SCC to be “equal to the economic impact of a unit of emissions in terms of t-period consumption as a numéraire.”

The SCC figure computed in 2015 is $31.2 per ton of CO2 for emissions, this amount will rise 3% in real terms, to account for inflation till 2050. Estimates of the dollar cost of carbon dioxide pollution is given per tonne, either carbon, $X/tC, or carbon dioxide, $X/tCO2. One tC is roughly equivalent to 3.7 tCO2.

According to economic theory, if SCC estimates were complete and markets perfect, a carbon tax should be set equal to the SCC. Emission permits would also have a value equal to the SCC. In reality, however, markets are not perfect, SCC estimates are not complete, and externalities in the market are difficult to calculate accurately, resulting in an incorrect amount priced for the carbon tax (Yohe et al.., 2007:823).

Estimates of the SCC are highly uncertain. Yohe et al. (2007:813) summarized the literature on SCC estimates: peer-reviewed estimates of the SCC for 2005 had an average value of $43/tC ($12/tCO2) with a standard deviation of $83/tC. The wide range of estimates is explained mostly by underlying uncertainties in the science of climate change (e.g., the climate sensitivity, which is a measure of the amount of global warming expected for a doubling in the atmospheric concentration of ), different choices of discount rate, different valuations of economic and non-economic impacts, treatment of equity, and how potential catastrophic impacts are estimated. One specific issue arises over coming to a consensus on what discount rate to use. Some, like Nordhaus, advocate for a discount rate that is pegged to current market interest rates, as we should treat efforts to reduce carbon dioxide emissions just like we treat any other economic activity. Others, like Stern, propose a much smaller discount rate because "normal" discount rates are skewed when applied over the time scales over which climate change acts. As a result, other estimates of the SCC spanned at least three orders of magnitude, from less than $1/tC to over $1,500/tC. The true SCC is expected to increase over time. The rate of increase will very likely be 2 to 4% per year. A recent meta-analysis of the literature on the estimates of the social costs of carbon, however, finds evidence of publication bias in favor of larger estimates.

Edited by Rahul and Meredith

Economics of climate change mitigation: Discount rates
Assessing climate change impacts and mitigation policies involves a comparison of economic flows that occur in different points in time. The discount rate is used by economists to compare economic effects occurring at different times. Discounting converts future economic impacts into their present-day value. The discount rate is generally positive because resources invested today can, on average, be transformed into more resources later. If climate change mitigation is viewed as an investment, then the return on investment can be used to decide how much should be spent on mitigation. To put it simply, a high discount rate implies that the present-value of a dollar is worth more than the future-value of a dollar.

To elaborate on what a high and low discount rate entails and the effect of discount rates on present-day value, a hypothetical example is provided. Let’s say in 50 years, you are promised with $1 billion. In present-day value terms, that sum of money is worth $291 million today with a 2.5% discount rate. In other words, this means a $291 million investment with a 2.5% discount rate today will be worth $1 billion in 50 years. A higher discount rate of 3% will decrease the present-day value to $228 million. An even higher discount rate of 5% will decrease the present-day value to $87 million. Continuing on this hypothetical example, this discounting effect is even more pronounced when comparing present-day values over a longer period of time. In 100 years, $1 billion with a 2.5% discount rate will be worth $85 million on present-day value. Higher discount rates of 3% and 5% will decrease to present-day values of $52 million and $8 million, respectively.

Below is a table of the estimated social cost of carbon from 2010 - 2050 (in 2007 dollars per metric ton CO2).

The choice of discount rate has a large effect on the result of any climate change cost analysis (Halsnæs et al.., 2007:136). Using too high a discount rate will result in too little investment in mitigation, but using too low a rate will result in too much investment in mitigation.

Discounting can either be prescriptive or descriptive. The descriptive approach is based on what discount rates are observed in the behaviour of people making every day decisions (the private discount rate) (IPCC, 2007c:813). In the prescriptive approach, a discount rate is chosen based on what is thought to be in the best interests of future generations (the social discount rate).

The descriptive approach can be interpreted as an effort to maximize the economic resources available to future generations, allowing them to decide how to use those resources (Arrow et al., 1996b:133-134). The prescriptive approach can be interpreted as an effort to do as much as is economically justified to reduce the risk of climate change.

According to Markandya et al.. (2001:466), discount rates used in assessing mitigation programmes need to at least partly reflect the opportunity costs of capital. In developed countries, Markandya et al.. (2001:466) thought that a discount rate of around 4%-6% was probably justified, while in developing countries, a rate of 10%-12% was cited. The discount rates used in assessing private projects were found to be higher – with potential rates of between 10% and 25%.

When deciding how to discount future climate change impacts, value judgements are necessary (Arrow et al.., 1996b:130). IPCC (2001a:9) found that there was no consensus on the use of long-term discount rates in this area. The prescriptive approach to discounting leads to long-term discount rates of 2-3% in real terms, while the descriptive approach leads to rates of at least 4% after tax - sometimes much higher (Halsnæs et al.., 2007:136).

Assumptions are made to support estimating high and low discount rates. These estimates depend on future emissions, climate sensitivity relative to increase in greenhouse gas concentrations, and the seriousness of impacts over time. Policies designed to address long-term environmental problems will significantly impact future generations, this is called intergenerational discounting. There are three factors that makes intergenerational discounting complicated: (1) the "investment horizon" is longer than what is reflected in observed interest rates that are used to guide private discounting decisions, (2) future generations have no say on today's policies, and (3) there is great uncertainty regarding economic growth.

Edited by Janine

Ja9young (talk) 21:25, 28 April 2017 (UTC)

Discount rates
Assessing climate change impacts and mitigation policies involves a comparison of economic flows that occur in different points in time. The discount rate is used by economists to compare economic effects occurring at different times. Discounting converts future economic impacts into their present-day value. The discount rate is generally positive because resources invested today can, on average, be transformed into more resources later. If climate change mitigation is viewed as an investment, then the return on investment can be used to decide how much should be spent on mitigation.

| Integrated assessment models (IAM) are used for to estimate the | social cost of carbon. The discount rate is one of the factors used in these models. The IAM frequently used is the | Dynamic Integrated Climate-Economy (DICE) model developed by | William Nordhaus. The DICE model uses discount rates, uncertainty, and risks to make benefit and cost estimations of climate policies and adapt to the current economic behavior.

The choice of discount rate has a large effect on the result of any climate change cost analysis (Halsnæs et al.., 2007:136). Using too high a discount rate will result in too little investment in mitigation, but using too low a rate will result in too much investment in mitigation. In other words, a high discount rate implies that the present-value of a dollar is worth more than the future-value of a dollar.

Discounting can either be prescriptive or descriptive. The descriptive approach is based on what discount rates are observed in the behaviour of people making every day decisions (the private discount rate) (IPCC, 2007c:813). In the prescriptive approach, a discount rate is chosen based on what is thought to be in the best interests of future generations (the social discount rate).

The descriptive approach can be interpreted as an effort to maximize the economic resources available to future generations, allowing them to decide how to use those resources (Arrow et al., 1996b:133-134). The prescriptive approach can be interpreted as an effort to do as much as is economically justified to reduce the risk of climate change.

The DICE model incorporates a descriptive approach, in which discounting reflects actual economic conditions. In a recent DICE model, DICE-2013R Model, the social cost of carbon is estimated based on the following alternative scenarios: (1) a baseline scenario, when climate change policies have not changed since 2010, (2) an optimal scenario, when climate change policies are optimal (fully implemented and followed), (3) when the optimal scenario does not exceed 2oC limit after 1900 data, (4) when the 2oC limit is an average and not the optimum, (5) when a near-zero (low) discount rate of 0.1% is used (as assumed in the Stern Review), (6) when a near-zero discount rate is also used but with calibrated interest rates, and (7) when a high discount rate of 3.5% is used.

According to Markandya et al.. (2001:466), discount rates used in assessing mitigation programmes need to at least partly reflect the opportunity costs of capital. In developed countries, Markandya et al.. (2001:466) thought that a discount rate of around 4%-6% was probably justified, while in developing countries, a rate of 10%-12% was cited. The discount rates used in assessing private projects were found to be higher – with potential rates of between 10% and 25%.

When deciding how to discount future climate change impacts, value judgements are necessary (Arrow et al.., 1996b:130). IPCC (2001a:9) found that there was no consensus on the use of long-term discount rates in this area. The prescriptive approach to discounting leads to long-term discount rates of 2-3% in real terms, while the descriptive approach leads to rates of at least 4% after tax - sometimes much higher (Halsnæs et al.., 2007:136).

Even today, it is difficult to agree on an appropriate discount rate. The approach of discounting to be either prescriptive or descriptive stemmed from the views of Nordhaus and Stern. Nordhaus takes on a descriptive approach which “assumes that investments to slow climate change must compete with investments in other areas.” While Stern takes on a prescriptive approach in which “leads to the conclusion that any positive pure rate of time preference is unethical.”

In Nordhaus’ view, his descriptive approach translates that the impact of climate change is slow, thus investments in climate change should be on the same level of competition with other investments. He defines the discount rate to be the rate of return on capital investments. The DICE model uses the estimated market return on capital as the discount rate, around an average of 4%. He argues that a higher discount rate will make future damages look small, thus have less effort to reduce emissions today. A lower discount rate will make future damages look larger, thus put more effort to reduce emissions today.

In Stern’s view, the pure rate of time preference is defined as the discount rate in a scenario where present and future generations have equal resources and opportunities. A zero pure rate of time preference in this case would indicate that all generations are treated equally. The future generation do not have a “voice” on today’s current policies, so the present generation are morally responsible to treat the future generation in the same manner. He suggests for a lower discount rate in which the present generation should invest in the future to reduce the risks of climate change.

Assumptions are made to support estimating high and low discount rates. These estimates depend on future emissions, climate sensitivity relative to increase in greenhouse gas concentrations, and the seriousness of impacts over time. Long-term climate policies will significantly impact future generations and this is called intergenerational discounting. Factors that make intergenerational discounting complicated include the great uncertainty of economic growth, future generations are affected by today’s policies, and private discounting will be affected due to a longer “investment horizon.”

Extra Credit: MOFs in Artificial Photosynthesis as Light-Harvesting/Capturing Systems
MOFs can be utilized in artificial photosynthesis, specifically for light-harvesting. In photosynthesis, photosystems in the chloroplasts take on the role to convert light into chemical energy. MOFs are currently being research to perform this exact role as a light-harvesting system. Since chlorophylls in chloroplasts contain porphyrin-like pigments, implementing porphyrins into MOFs may exhibit the same behavior. Materials with chromophores that efficiently absorb light in the visible spectrum are desired to synthesize MOFs. These chromophores, as struts, may be the link between the structure and composition of MOFs to light capture and energy transport. An advantage of synthesizing these MOFs is the prevention of self-quenching and longer exciton lifetimes. Ruthenium-based MOFs are known to have long exciton lifetimes. Factors to consider are the migration of excitons, their direction and efficiency, when synthesizing porphyrin-based MOFs.

Dye-sensitized MOFs are also examined for energy delivery and they can be applied as a film in dye-sensitized solar cells (DSSC). In DSSC, dye-sensitized TiO2 particles capture light and release the electrons into the TiO2 film. A copper-based MOF was synthesized to replace the dye that sensitized the TiO2 and doping this MOF with iodine increases absorption (in the blue-green spectra of visible light) and electrical conductivity due to interactions between iodine molecules and the π-electrons on the MOF.