SEI Contact:

Frank Ackerman

Time-frame: 2010–2011

The Social Cost of Carbon

The social cost of carbon (SCC), defined as the estimated price of the damages caused by each additional ton of CO2 released into the atmosphere, is the volume dial on government regulations affecting greenhouse gases: The higher the SCC is set, the more stringent the regulatory standards. It is used in cost-benefit analyses of proposed rules by the U.S. Environmental Protection Agency and other regulatory agencies.

This project builds on our 2010 critique of the federal government process that recommended a low value of per ton of CO2; our follow-up analysis looks at two of the models used to come up with that estimate, FUND and DICE. We will also recalculate the SCC, using the methods of the federal government's analysis but incorporating a full range of climate risks and uncertainties.