Michael Greenstone, Milton Friedman Distinguished Service Professor in Economics; Director, EPIC; Director, Becker Friedman Institute

Tamma Carleton, Assistant Professor of Economics, Bren School of Environmental Science and Management at the University of California, Santa Barbara

The social cost of carbon (SCC), the total cost to society from the release of a ton of CO2 emissions, is vital in evaluating the benefits and costs of climate policies. To bring the SCC to the frontier of knowledge, Carleton and Greenstone recommend that the Biden administration immediately update it by using a discount rate of no higher than 2 percent and including global damages. These changes would produce a social cost of carbon of $125 per metric ton. As a second step, they recommend that the Biden administration form an interagency working group with the goal of returning the SCC to the frontier of understanding about the science and economics of climate change.

Areas of Focus: Social Cost of Carbon
Definition
Social Cost of Carbon
The social cost of carbon is an essential tool for incorporating the cost of climate change into policy-making, corporate planning and investment decisionmaking in the United States and around the...
Energy Markets
Definition
Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
Fossil Fuels
Definition
Fossil Fuels
Under current policies, fossil fuels will play an important role in the energy system for the foreseeable future. EPIC research is exploring the costs and benefits of these fuels as...