By Kelly Macnamara, Marlowe Hood
The United States is updating a figure that experts say could help transform American climate action and reverberate around the world — the price it puts on future damages to society caused by carbon pollution today.
That all-important number — the dollar value of the climate change harm attributable to a tonne of CO2 — is known as the social cost of carbon (SCC), or as some have called it, “the most important number you’ve never heard of”.
Put simply, a higher number can spur more aggressive policies to tame global warming, a lower number may make action seem unaffordable.
As part of his efforts to resuscitate America’s climate change fight, President Joe Biden last month restored the SCC to Obama-era levels, after the Trump administration slashed it to a nominal amount.
But the new measures are only a first step in a sweeping recalculation, with a final finding to be announced in a year.
Scientists argue the US social cost of carbon must be high enough to reflect the full array of climate effects, from near-term pollution to long-term sea level rise.
Even the possibility of catastrophic shifts in the climate system such as the irreversible melting of permafrost or ice sheets must be taken into account.
Essentially it asks: How much are we willing to pay today to avoid disaster tomorrow?
It considers future illness and deaths from heatwaves, small particle pollution, climate-enhanced natural disasters, property damage, reductions in agricultural production, disruption to energy systems, predicted violent conflicts and mass migration.
“The energy and climate challenge that the world faces is very demanding and we need a guide for how we should be responding to that challenge,” said Michael Greenstone, who was instrumental in coming up with the social cost of carbon under the Obama administration.
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A recent report from the University of Chicago that Greenstone co-authored said countries including Canada, France, Germany, Mexico and Britain invoked the US social cost of carbon when coming up with their own figures. Some adopted the US estimates wholesale.
The SCC can “influence the direction of international climate negotiations”, the report said.