By Chelsea Harvey
How we view the costs of future climate change, and more importantly how we quantify them, may soon be changing. A much-anticipated new report, just released by the National Academy of Sciences, recommends major updates to a federal metric known as the “social cost of carbon” — and its suggestions could help address a growing scientific concern that we’re underestimating the damages global warming will cause.
The social cost of carbon is an Obama-era metric first addressed by a federal working group in 2009. The basic premise is simple: Scientists agree that climate change will have all kinds of impacts on human societies, including natural disasters and effects on human health, productivity and agricultural output, all of which have economic consequences.
The social cost of carbon, then, refers to the monetary cost of emitting a single ton of carbon dioxide into the atmosphere, given that these emissions will further contribute to global warming. The value has been used to aid in cost-benefit analyses for a variety of federal environmental rules. Currently, it’s set at about $36 per ton of carbon dioxide.
But the new NAS report, requested by the federal Interagency Working Group on the Social Cost of Carbon, suggests the methodology used to arrive at this value is in need of updating, both to make it more transparent and more scientifically sound. It makes a number of recommendations for future estimates aimed at helping the process “draw more readily on expertise from the wide range of scientific disciplines relevant to [the social cost of carbon] estimation.”
“I think the report has laid out an important blueprint for how to update the most important number that you’ve never heard of,” said Michael Greenstone, an economist at the University of Chicago and former chief economist for President Obama’s Council of Economic Advisers. Greenstone helped convene the first federal working group to estimate the social cost of carbon and served as a reviewer on the new NAS report. “Social and economic understanding of climate change has advanced greatly in the last six years, since the original social cost of carbon was released, and the report identifies important ways to take advantage of those improvements in our understanding…”
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