Developing a Social Cost of Carbon for US Regulatory Analysis: A Methodology and Interpretation

By Michael Greenstone, E. Kopits, A. Wolverton. Review of Environmental Economics and Policy, 2013

301 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, Global and Planetary Change, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/7da7a054d2c0ec6ec925143a0bfa93f0a5123b0e

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Citations in the corpus

Quantifying Economic Value of Coastal Ecosystem Services : A Review (2018, background): “Global CC induced damage in general comprises the monetary assessments of climate-induced damage to various economic sectors, health and human lives as well as ecosystems across the entire planet using global Integrated Assessment odels [61].”
Will We Ever Stop Using Fossil Fuels (2016, background): “In practice, the marginal cost of many of the new resources is nonzero, implying that the supply curve shifts, or becomes flatter, at some strictly positive price.”
Do Energy Efficiency Investments Deliver? Evidence from the Weatherization Assistance Program (2018, unknown): “PROGRAM∗”
Evaluating process-based integrated assessment models of climate change mitigation (2017, background): “…(Manne and Richels 1992); energy use in US buildings during the period 1995– 2010 (Chaturvedi et al. 2013); the Indian economy’s response to rising oil prices during 2003– 2006 (Guivarch et al. 2009); and transportation energy demand in Western Europe during 1970–2003 (van Ruijven et al. 2010).”
Tax Policy Issues in Designing a Carbon Tax (2014, background): “Greenstone, Kopits, and Wolverton (2013) estimate, for example, that the United States bears only 7 to 10 percent of the worldwide marginal social costs of carbon.”
Some Contributions of Integrated Assessment Models of Global Climate Change (2017, methodology): “…SCC The third application of the BC IAMs has been to estimate the SCC. Estimates of the SCC by the U.S. Interagency Working Group (IWG) on Social Cost of Carbon have been used for energy efficiency and carbon emissions rulemaking by the U.S. government (see Greenstone, Kopits, and Wolverton 2013).”
Fat Tails and the Social Cost of Carbon (2014, background): “(4) I want to analyze the extreme case of a very rare, very catastrophic climate event where 2What follows is an analytical abstraction of the procedure for deriving the SCC described, e.g., in Greenstone, Kopits, and Wolverton (2013). simultaneously p and C are both small.”
The GDP-Temperature relationship: Implications for climate change damages (2021, unknown): “social cost of carbon, predict losses of a few percent of GDP from a few degrees of warming (Greenstone et al. 2013; Tol 2014; Nordhaus and Moffat 2017).”
Estimates of the social cost of carbon: A review based on meta-analysis (2019, background): “The traditional countermeasure to address the externality of climate change is to define a price for carbon emissions, which is tantamount to the social marginal damage (Greenstone et al., 2013; Metcalf et al., 2017).”
Transition to Clean Technology (2016, background): “Greenstone, Kopits, and Wolverton ð2013Þ estimate a social cost of carbon equal to about $21 in 2010, expressed in 2007 dollars, and this number is currently being used for cost-benefit analysis by US agencies.”
Social Norms and Energy Conservation Beyond the US (2020, unknown): “We then compare the HER abatement cost to the avoided social cost of carbon, the usual yardstick to assess the cost-effectiveness of climate change mitigation policies (Greenstone et al. 2013, Nordhaus 2014). Nordhaus (2014) estimates that the social cost of carbon in 2015 are at 19 US$ per ton, whi”