where @Dt/@Et is a measure of the incremental damage of CO2
emission and s is the
social
discount
rate
. Since CO2 resides in the
atmosphere, on average, for a long period, T is usually chosen to be
100 years or longer. The SCC can be interpreted as the value of
resulting climate damages, measured at the margin, and is thus an
indicator of the global incremental damage done by emitting one
more ton of carbon today or at some point in the future, or,
alternatively, the marginal benefit of carbon emission reduction
(Pearce, 2003). Since the marginal damage of CO2 emissions at a
certain point in time depends in general on the atmospheric
concentration of CO2 at the time of emission and on future
emission patterns, the value of the SCC is not constant over
time (see Eq. (1)) and is expected to vary between different climate
change scenarios (Stern, 2007). In particular, the SCC will tend
to increase over time as population and per capita income grow.
Since the benefits of CO2 sequestration are not limited to a specific