sectoral economic costs and benefits of ghg mitigation - IPCC

José R. Moreira
Figure 1
GHG Effects of Full Budgetary Cost Pricing Through Fuel Tax in OECD,
Central and Easter Europe and CIS (Excludes OECD Europe Effect of Gasoline
Price Reduction) Source: Michaelis, 1995
• costs imposed on the population in general in the form of suffering, damages and loss of
visual amenity from air pollution;
• and costs imposed on the population in general in the form of suffering and annoyance
because of noise.
Other external costs may be attached to climate change, like, depletion of non-renewable
resources, military costs and damage from protecting security of oil supply, effects of transport
on habitats and biodiversity, social dislocation, effects of urban quality of life, housing value, and
other factors. Most of these are very difficult to value, and some may be very large.
Some of these externalities, those associated with climate change, depletion of resources, and
security of oil supply, are of obvious relevance in the context of GHG mitigation. Internalizing
these externalities through fuel taxes would in principle be the most efficient way to address
them. The other externalities might be more efficiently reduced or internalized through other
measures, including congestion pricing, increased insurance premiums, and standards or charges
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