The Korean Journal of Economic Studies
Estimation of Social Cost of Carbon in Jeju Island: An Integrated Assessment Model Approach
Kuk Mo Jung (Sogang University) and Daseul Hwang (Bank of Korea)Year 2022Vol. 70No. 2
In Korea, most research on the economic effects of climate change is limited to partial analyses of climate change on individual industries and sectors. Estimates on aggregate costs of externality caused by climate change a.k.a. the social cost of carbon through a lens of the Integrated Assessment Model (IAM) are rare. Based on recent IAM proposed by Golosov, Hassler, Krusell, and Tsyvinski (2014) this study estimates the social cost of carbon in Jeju Island for the first time in Korea. We find that social cost of carbon in Jeju Island based on year 2019 are estimated between ₩20.5 and ₩36.5 billion. These results amount to the social cost of carbon of a range from ₩16,000 to ₩29,000 per ton carbon in Jeju Island.