Does Unilateral Decarbonization Pay For Itself?

This paper shows that unilateral decarbonization pays for itself in large economies. We estimate economic damages from global temperature shocks and combine them with a climate-economy model to construct Domestic Costs of Carbon: $226 per ton for the United States and $216 per ton for the European Union. When compared to marginal abatement costs, these values imply over 80% unilateral decarbonization for both economies, an order of magnitude larger than under conventional damages estimated based on local temperature.