Michael Greenstone
The US government recently developed a range of values representing the monetized global damages associated with an incremental increase in carbon dioxide (CO2) emissions, commonly referred to as the social cost of carbon (SCC). These values are currently used in benefit–cost analyses to assess potential federal regulations. For 2010, the central value of the SCC is $21 per ton of CO2 emissions, with sensitivity analyses to be conducted at $5, $35, and $65 per ton of CO2 (2007 dollars). This article summarizes the methodology and interagency process used to develop these SCC values, offers our own commentary on how the SCC can be used to inform regulatory decisions, and identifies priorities for further research.
Areas of Focus: Climate Change, Climate Economics, Climate Law & Policy, Social Cost of Carbon, Updating the United States Government’s Social Cost of Carbon, Updating the United States Government’s Social Cost of Carbon
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Climate Change
Climate change is an urgent global challenge. EPIC research is helping to assess its impacts, quantify its costs, and identify an efficient set of policies to reduce emissions and adapt...
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Climate Economics
Climate change will affect every sector of the economy, both locally and globally. EPIC research is quantifying these effects to help guide policymakers, businesses, and individuals working to mitigate and...
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Climate Law & Policy
As countries around the world implement policies to confront climate change, EPIC research is calculating which policies will have the most impact for the least cost.
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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...
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Updating the United States Government’s Social Cost of Carbon
As the Biden administration updates the social cost of carbon, their thorough review should include using the latest climate modeling, applying new climate damage estimates, employing lower discount rates, and...
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Updating the United States Government’s Social Cost of Carbon
Policymakers could immediately return to the Obama Administration’s social cost of carbon approach paired with a more appropriate discount rate that together would produce a social cost of $125 per...