ABCDEFGHIJKLMNOPQRSTUVWXYZ
1
2
3
4
Unadjusted social cost of carbon (SCC)$2,387per tonne
Note: the Wang, Deng et al 2019 metastudy gave this as the upper bound, albeit the average was significantl lower. This higher number is justified because in an actuarial or investment context we need to consider tail risks which are omitted from standard SCC / IAM models
5
6
1$ of economic harm (i.e. loss in GDP) leads to
$1
of reduction in aggregate profitability
Decent enough approximation but limitations are shown here: https://www.msci.com/documents/10199/a134c5d5-dca0-420d-875d-06adb948f578
7
8
9
Portfolio assumptions
10
11
Imagine that the portfolio contains
12
Fossil fuel sector2.33%
13
All other sectors97.67%
https://www.thebalance.com/what-is-the-sector-weighting-of-the-s-and-p-500-4579847. Important to apply this at the level of the whole sector; working at the level of one company introduces complex (and unnecessary) competition effects
14
15
16
Discount rate6%
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100