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Conceptual winsorizing: An application to the social cost of carbon

Richard S. J. Tol

arXiv 10 Aug 2025 · Econometrics

arXiv:2508.07384 · PDF · DOI · OpenAlex · Extracted main text

Abstract

There are many published estimates of the social cost of carbon. Some are clear outliers, the result of poorly constrained models. Percentile winsorizing is an option, but I here propose conceptual winsorizing: The social cost of carbon is either a willingness to pay, which cannot exceed the ability to pay, or a proposed carbon tax, which cannot raise more revenue than all other taxes combined. Conceptual winsorizing successfully removes high outliers. It slackens as economies decarbonize, slowly without climate policy, faster with.

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Tol, R. S. J (2023) Social cost of carbon estimates have increased over time self0.92844100%
2van den Bergh, J. C. J. M. & Botzen, W. J. W (2014) A lower bound to the social cost of CO2 emissions0.40511100%
3Fankhauser, S. & Tol, D. W., Richard S. J.and Pearce (1997) The aggregation of climate change damages: a welfare theoretic approach0.40511100%
4Harstad, B (2007) Harmonization and side payments in political cooperation0.40511100%
5Havránek, T., Irsova, Z., Janda, K. & Zilberman, D (2015) Selective reporting and the social cost of carbon0.40511100%
6Hobbes, T Leviathan or The Matter, Forme and Power of a Commonwealth Ecclesiasticall and Civil0.40511100%
7Kelleher, J. P (2025) The Social Cost of Carbon: Ethics and the Limits of Climate Change Economics0.40511100%
8Moore, F. C. et al (2024) Synthesis of evidence yields high social cost of carbon due to structural model variation and uncertainties0.40511100%
9van der Ploeg, F. & Withagen, C (2014) Growth, Renewables, And The Optimal Carbon Tax0.40511100%
10Riahi, K. et al (2016) The shared socioeconomic pathways and their energy, land use, and greenhouse gas emissions implications: An overview0.40511100%

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