Comprehensive evidence implies a higher social cost of CO2

2022/09/01 by Kevin Rennert, Frank Errickson, Brian Prest +21 · 2 voices · 35 citations
Economics, Econometrics and Finance · Energy · Environmental Science · #Atmospheric and Environmental Gas Dynamics #Climate Change Policy and Economics #Energy, Environment, and Transportation Policies

paper · pdf · doi:10.1038/s41586-022-05224-9

openalex publication_date 2022/09/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/29

Abstract

Abstract The social cost of carbon dioxide (SC-CO 2 ) measures the monetized value of the damages to society caused by an incremental metric tonne of CO 2 emissions and is a key metric informing climate policy. Used by governments and other decision-makers in benefit–cost analysis for over a decade, SC-CO 2 estimates draw on climate science, economics, demography and other disciplines. However, a 2017 report by the US National Academies of Sciences, Engineering, and Medicine 1 (NASEM) highlighted that current SC-CO 2 estimates no longer reflect the latest research. The report provided a series of recommendations for improving the scientific basis, transparency and uncertainty characterization of SC-CO 2 estimates. Here we show that improved probabilistic socioeconomic projections, climate models, damage functions, and discounting methods that collectively reflect theoretically consistent valuation of risk, substantially increase estimates of the SC-CO 2 . Our preferred mean SC-CO 2 estimate is 185 per tonne of CO 2 (44–413 per tCO 2 : 5%–95% range, 2020 US dollars) at a near-term risk-free discount rate of 2%, a value 3.6 times higher than the US government’s current value of 51 per tCO 2 . Our estimates incorporate updated scientific understanding throughout all components of SC-CO 2 estimation in the new open-source Greenhouse Gas Impact Value Estimator (GIVE) model, in a manner fully responsive to the near-term NASEM recommendations. Our higher SC-CO 2 values, compared with estimates currently used in policy evaluation, substantially increase the estimated benefits of greenhouse gas mitigation and thereby increase the expected net benefits of more stringent climate policies.

Citations

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Discussions

• The social cost of carbon estimates currently used by the U.S. and Canada are largely based on Rennert et al. (2022). The methodology of Rennert et al. is far more complex than assuming a T^2 relation [bsky, 5 points, 0 comments]
• See also Rennert, 2022. Comprehensive Evidence Implies a Higher Social Cost of CO2. Nature doi: 10.1038/s41586-022-05224-9. doi.org/10.1038/s415... [bsky, 1 points, 1 comments]

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