2025 Theses Doctoral

Life, Death, and Pigouvian Taxes: Three Essays on Climate Change Economics

Bressler, Raymond Daniel

This dissertation analyzes the impact of climate change on temperature-related mortality and the subsequent welfare and policy implications and considerations.

In chapter 1, I assess the global mortality impacts of climate change, and I estimate both the mortality cost of carbon (MCC) and the social cost of carbon (SCC). The SCC is arguably the most important concept in climate economics. Until recently, climate-mortality damages were either negligible or excluded in SCC models. Now, they constitute the majority of damages in latest-generation models, which also project damages at much higher spatial resolution. Previously, discounting (how to value the future) was considered the most consequential choice in determining the SCC. Here, I demonstrate that valuing lives in poorer versus richer countries is now the most consequential choice. I provide the first estimate of the MCC—the number of deaths from emitting an additional tonne of CO₂—in a latest-generation climate-economy mortality model broken down by country. 83% of the deaths in the MCC occur in low and lower middle-income countries. I then calculate the SCC by monetizing these deaths and adding other damage categories. The highly unequal distribution of deaths makes the SCC extremely sensitive to how lives are valued in poor versus rich countries. I calculate the SCC across four approaches to valuing lives and livelihoods with support in the literature. Among approaches sanctioned in U.S. policymaking, the 2025 SCC varies from $237 (U.S. EPA’s current approach) to $3,567 (U.S. income weighting). These results empower decision-makers to choose their preferred approach while understanding sensitivity to alternative approaches. Applying these estimates, the Inflation Reduction Act saves an estimated 2.8M lives through GHG reductions, with monetary benefits ranging from $4.7T-$74T, depending on the approach.

Chapter 2 assesses the theory behind different approaches to Benefit Cost Analysis (BCA) and evaluates how they fare when applied to global externalities like climate change. Valuing deaths caused by climate change in BCA is complex and controversial, having caused disagreement and acrimony in past high-profile settings. Furthermore, it is of first order consequence to the value of the social cost of carbon (SCC). Despite this, the underlying considerations remain under-analyzed. The pure Kaldor-Hicks approach to BCA – measuring costs in market dollars unadjusted for diminishing marginal utility and valuing premature deaths in rich areas more than poor areas – relies on assumptions that are debated in domestic contexts, but clearly do not hold in the context of climate change. This approach is equivalent to defining a Negishi weighted social welfare function, which applies weights so that diminishing marginal utility is no longer accounted for. Furthermore, if costs are measured in purchasing power parity adjusted money – as is typical for the SCC – then the Kaldor-Hicks potential compensation criterion no longer necessarily holds. The first-best BCA approach in the climate context is welfare weighting. This approach accounts for diminishing marginal utility using empirical estimates for the curvature of the utility function, and it better captures what a social planner naturally cares about: real net benefits and the welfare people get from those net benefits. The current U.S. practice – identical to the pure Kaldor-Hicks approach except that it gives a uniform population average value to all premature deaths – is preferred over the pure Kaldor-Hicks approach because it implicitly welfare weights premature mortality costs. However, the fully welfare weighted approach is first-best because it accounts for diminishing marginal utility across all costs, not just premature mortality risk.

Chapter 3 uncovers the distribution of temperature-mortality impacts across demographic groups in Mexico, a country with exceptionally rich microdata that enables a deeper exploration of distributional impacts across demographic groups than the global analysis in chapter 1. We study heat and mortality in Mexico, a country that exhibits a unique combination of universal mortality microdata and among the most extreme levels of humid heat. Combining detailed measurements of wet-bulb temperature with age-specific mortality data, we find that it is younger people who are particularly vulnerable to heat: people under 35 years old account for 75% of recent heat-related deaths and 87% of heat-related lost life years while those 50 and older account for 96% of cold-related deaths and 80% of cold-related lost life years. We develop highresolution projections of humid heat and associated mortality and find that under the end-ofcentury SSP 3-7.0 emissions scenario, temperature-related deaths shift from older to younger people. Deaths among under-35-year-olds increase 32% while decreasing by 33% among other age groups.