Total economic costs of climate change at different discount rates for market and non-market values

What will be the aggregated cost of climate change in achieving the Paris Agreement, including mitigation, adaptation, and residual impacts? Several studies estimated the aggregated cost but did not always consider the critical issues. Some do not address non-market values such as biodiversity and human health, and most do not address differentiating discount rates. In this study, we estimate the aggregated cost of climate change using an integrated assessment model linked with detailed-process-based climate impact models and different discount rates for market and non-market values. The analysis reveals that a climate policy with minimal aggregated cost is sensitive to socioeconomic scenarios and the way discount rates are applied. The results elucidate that a lower discount rate to non-market value-that is, a higher estimate of future value-makes the aggregated cost of achieving the Paris Agreement economically reasonable.