By Jamey Dunn
A team of economists is calling for changes to the way the federal government figures the cost associated with carbon emissions.
The Social Cost of Carbon (SCC) is what the U.S. Environmental Protection Agency and other federal entities use to estimate the monetary damage caused by carbon dioxide emissions. The current SCC is estimated to be $37 per metric ton of carbon dioxide released into the atmosphere. The number is used to consider the value of plans to address climate change by cutting emissions.
Michael Greenstone, the director of the Energy Policy Institute at the University of Chicago, says that the estimate helps to weed out inefficient ideas that would cost more than the harm they would prevent. He says that the SCC is not just used by policymakers. Courts and businesses also refer to it when making some decisions. “The U.S. Social Cost of Carbon is becoming a focal estimate of the likely climate damages globally,” Greenstone, one of the authors of the analysis, said in a news release. “It’s critical that we get this number right, because it will influence policy around the world.”
At one point, government agencies were not using a unified estimate of the SCC. In 2010, an interagency group created a single projection to be used by all agencies of the federal government. That number was updated in 2013, and then tweaked again slightly last year. “Greenhouse gas emissions cause the same damage regardless of whether they are emitted through car tailpipes or factory smokestacks, and no matter where in the world they come from,” Greenstone said. “For this reason, one consistently used and rigorously maintained estimate of climate damages is imperative to ensure our climate policies are providing the maximum benefits for the least costs.”
Greenstone and his fellow researchers propose that the process for updating the SCC become more predictable and transparent. Currently, there is no formal schedule for revising the number. The group says the SCC should be revisited every five years by an interagency panel and that the public should have an opportunity to comment during the process. They also suggest that the National Academy of Science’s National Research Council review any changes to the SCC. And they say that formalizing the process could result in improved prediction models, because scientists and economists could share relevant information with the panel. With a predictable schedule, they could even focus on research that might help improve the estimate.
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