Comprehensive evidence implies a higher social cost of CO2

Kevin Rennert, Frank Errickson, Brian Prest, Lisa Rennels, Richard Newell, William Pizer, Cora Kingdon, Jordan Wingenroth, Roger Cooke, Bryan Parthum, David Smith, Kevin Cromar, Delavane Diaz, Frances C. Moore, Ulrich K. Müller, Richard J. Plevin, Adrian E. Raftery, Hana Ševčíková, Hannah Sheets, James H. Stock, Tammy Tan, Mark Watson, Tony E. Wong and David Anthoff ()
Additional contact information
Kevin Rennert: Resources for the Future
Frank Errickson: Princeton University
Lisa Rennels: University of California
Cora Kingdon: University of California
Bryan Parthum: Environmental Protection Agency
David Smith: Environmental Protection Agency
Kevin Cromar: New York University
Delavane Diaz: EPRI
Frances C. Moore: University of California
Ulrich K. Müller: Princeton University
Richard J. Plevin: Independent researcher
Adrian E. Raftery: University of Washington
Hana Ševčíková: University of Washington
Hannah Sheets: Rochester Institute of Technology
James H. Stock: Harvard University
Tammy Tan: Environmental Protection Agency
Mark Watson: Princeton University
Tony E. Wong: Rochester Institute of Technology
David Anthoff: University of California

Nature, 2022, vol. 610, issue 7933, 687-692

Abstract: Abstract The social cost of carbon dioxide (SC-CO2) measures the monetized value of the damages to society caused by an incremental metric tonne of CO2 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-CO2 estimates draw on climate science, economics, demography and other disciplines. However, a 2017 report by the US National Academies of Sciences, Engineering, and Medicine1 (NASEM) highlighted that current SC-CO2 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-CO2 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-CO2. Our preferred mean SC-CO2 estimate is $185 per tonne of CO2 ($44–$413 per tCO2: 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 tCO2. Our estimates incorporate updated scientific understanding throughout all components of SC-CO2 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-CO2 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.

Date: 2022
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DOI: 10.1038/s41586-022-05224-9

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