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Recently, in the economics literature, several papers have put forward arguments for using a declining discount rate in social-cost benefit analysis. This paper examines the impact of employing a declining discount rate on the social cost of carbon-the marginal social damage from a ton of emitted carbon. Six declining discounting schemes are implemented in the FUND 2.8 integrated assessment model, including the recent amendments to the Green Book of HM Treasury (Treasury, H.M., 2003. The Greenbook: Appraisal and Evaluation in Central Government. TSO, London). We find that using a declining schedule of discount rates increases the social cost of carbon estimate by as little as 10% or by as much as a factor of 40, depending upon the scenario selected. Although the range of plausible estimates is large, using declining discounting schemes in FUND 2.8 in most cases does not yield values at the £70/tC level suggested by UK DEFRA [Clarkson, R., Deyes, K., 2002. Estimating the social cost of carbon emissions. Government Economic Service Working Paper. HM Treasury, London]. Indeed, only at the higher end of the values of social cost of carbon found here would many climate change related policies - such as the Kyoto Protocol - pass a cost-benefit analysis. This conclusion, however, does not necessarily undermine the ethical and political economic reasons for supporting international collective action on climate change. © 2006 Elsevier Ltd. All rights reserved.

ABSTRACT Many studies consider substitution of aircraft services with high-speed train (HST) services on short-haul routes desirable for environmental reasons. This paper empirically examined this perception by evaluating local air pollution (LAP) and climate change impacts from a flight and an HST service between London and Paris. Comparing the emissions, the impact, and the cost of damage from the aircraft journey with the HST journey, it was found that substituting an aircraft seat with an HST seat is beneficial. These benefits are likely to occur on all routes on which aircraft and HST substitution is likely to take place. Despite the many limitations in the evaluation of environmental impact, the analysis suggests that such an evaluation is valuable and provides important information.