New analysis this morning recommends a two-step approach for the Biden administration to immediately update the social cost of carbon. First, the report calls for using a “discount rate” of no higher than 2 percent and including global damages, which would increase the social cost of carbon to $125 per metric ton.
Then, the analysis calls on the Biden administration to re-launch an Inter-agency Working Group to comprehensively update the social cost of carbon. The report was co-authored by Energy Policy Institute at the University of Chicago Director Michael Greenstone and Tamma Carleton, an assistant professor at UC Santa Barbara. Greenstone, notably, co-led the original Inter-agency Working Group that set a government-wide social cost of carbon while serving as chief economist for Obama’s Council of Economic Advisers.
“Over the last four years, the Trump administration reduced the social cost of carbon to near zero by ignoring science and economics,” Greenstone said in a statement. “The Biden Administration can best serve the interests of the American people by returning the social cost of carbon to the frontier of understanding about climate change, including all that has been learned in the last decade.”