Current U.S. Social Cost of Carbon (SCC) is Behind Frontier Science

Note: This figure compares current and past U.S. federal SCCs to those produced by recent scientific and economic research. The full all-sector SCCs shown on the left are U.S. federal SCCs by the Trump administration (dark red/light red) and as the interim estimate under the Biden administration (blue). Sector-specific “partial” SCCs on the right come from the Interagency Working Group (IWG) 2013 implementation of the FUND model (grey) and recent scientific literature (yellow).
From the U.S. Energy & Climate Roadmap, Energy Policy Institute at the University of Chicago

Many regulations that reduce carbon emissions—including fuel economy, energy efficiency and power sector rules—require that the benefits be compared to the costs. The social cost of carbon (SCC), the dollar value of all the damages suffered each time we release a ton of carbon into the atmosphere, is essential to understanding these costs and benefits. In fact, without the SCC, many regulations would have no, or at least incomplete, measurable benefits, leaving key climate policies off the table.

That was the case in the Trump administration, when the SCC was lowered to near zero (red bar). Predictably, President Trump was then able to roll back climate regulations, like fuel economy standards. The Biden administration is now using a much higher SCC, $51 per ton, by returning to the process the Obama administration used back when the first SCC was set in 2009 (blue bar).

But the latest research shows that the cost that climate change is imposing on society is likely much greater than $51 per ton. For example, using updated science and economics, the mortality cost alone to society of each additional ton of CO2 is $22.5 per ton (yellow mortality bar)—up from the $1.1 per ton estimated in 2009. The fact of the matter is researchers have learned a lot more about climate change’s costs over the last decade plus.

Throughout 2021, the Biden administration has committed to further study the SCC using the best available science and economics. EPIC’s Michael Greenstone and UC Santa Barbara’s Tamma Carleton propose several recommendations to guide their comprehensive review. These include using the latest climate modeling, applying new climate damage estimates, employing lower discount rates, and incorporating global, rather than only domestic, damage estimates of additional carbon emissions.

Learn more about their recommendations.

Areas of Focus: Updating the United States Government’s Social Cost of Carbon
Definition
Updating the United States Government’s Social Cost of Carbon
As the Biden administration updates the social cost of carbon, their thorough review should include using the latest climate modeling, applying new climate damage estimates, employing lower discount rates, and...