Revisiting the social cost of carbon

By William Nordhaus. Proceedings of the National Academy of Sciences of the United States of America, 2017

1,140 citations recorded by the source corpus.

Significance The most important single economic concept in the economics of climate change is the social cost of carbon (SCC). At present, regulations with more than $1 trillion of benefits have been written for the United States that use the SCC in their economic analysis. The DICE model (Dynamic Integrated model of Climate and the Economy) is one of three integrated assessment models used to estimate the SCC in the United States. The present study presents updated estimates based on a revised DICE model (DICE-2016R). The study estimates that the SCC is $31 per ton of CO2 in 2010 US$ for the current period (2015). This study will be an important step in developing the next generation of estimates of the SCC in the United States and other countries. The social cost of carbon (SCC) is a central concept for understanding and implementing climate change policies. This term represents the economic cost caused by an additional ton of carbon dioxide emissions or its equivalent. The present study presents updated estimates based on a revised DICE model (Dynamic Integrated model of Climate and the Economy). The study estimates that the SCC is $31 per ton of CO2 in 2010 US$ for the current period (2015). For the central case, the real SCC grows at 3% per year over the period to 2050. The paper also compares the estimates with those from other sources.

Subfields: Economics and Econometrics, Environmental Engineering, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/8d04ca719d420da4ef2b78e7443850149495f04d

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Citations in the corpus

Evolution of modeling of the economics of global warming: changes in the DICE model, 1992–2017 (2018, background): “The latest published version is DICE-2016R2 (Nordhaus 2017, 2018), with a complete description of the penultimate model in Nordhaus and Sztorc (2013).”
Carbon Pricing: Effectiveness and Equity (2018, result): “23 Nordhaus (2017b), Fig.”
Income inequality and carbon consumption: Evidence from Environmental Engel curves (2019, background): “For example, the estimated increase of 28.5 kg in CO2 emissions from a marginal redistribution of $1000 would equal a social external cost of 90 cents under a conservative estimate for the social cost of carbon of $31 (following Nordhaus, 2017).”
Carbon pricing and deep decarbonisation (2018, background): “After all, most carbon taxes and emission allowance prices around the world are lower than the stipulated mitigation costs summarised by the IPCC (2014) and the stipulated social cost of carbon used by the OECD (2016) and several national governments (see e.g. for the United States: Nordhaus, 2017).”
Long-Term Macroeconomic Effects of Climate Change (2019, neutral): “These taxes should reflect the social cost of carbon (SCC), which represents the damage caused by the release of one ton of carbon dioxide (Nordhaus 2017).”
A social cost of carbon for (almost) every country (2019, background): “Table 2 compares the estimates of the regional social cost of carbon to those reported by Nordhaus (2017).”
Quantifying the human cost of global warming (2022, background): “Existing estimates tend to be expressed in monetary terms 7 , tend to recognize impacts on the rich more than those on the poor (because the rich have more money to lose) and tend to value those living now over those living in the future (because future damages are subject to economic discounting).”
Three green financial policies to address climate risks (2021, methodology): “Our modeling of the carbon-climate-damage relationship follows a similar approach to small-scale macro models of the economy and the climate (e.g. Nordhaus, 2017; Golosov et al., 2014).”
The Economic Geography of Global Warming (2021, methodology): “Note the similarities with the climate literature ( e.g. Golosov et al. , 2014; Nordhaus, 2017), which uses the Ramsey formula.”