Adopting the Social Cost of Carbon for State Benefit-Cost Analysis: A Primer for Practitioners

Brian C. Prest
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Brian C. Prest: Resources for the Future

No 26-11, RFF Reports from Resources for the Future

Abstract: The social cost of carbon (SCC) is an estimate, in dollars, of the economic damages to society caused by an incremental ton of carbon dioxide (CO2) emissions. In 2023, EPA (US EPA 2023) produced updated, peer-reviewed SCC estimates, with a central value of $190 per metric ton of CO2 (in 2020 US dollars) for emissions occurring in 2020. EPA’s updated estimates also include estimates for other years beyond 2020 and other greenhouse gases of methane (CH4) and nitrous oxide (N2O), which are shown in Appendix Table A1. These estimates represent the most scientifically advanced, comprehensively documented, and peer reviewed set of SCC values available, and states are increasingly adopting EPA’s estimates to inform policy.As of early 2026, at least 15 US states had applied the social cost of greenhouse gases in one or more policy contexts. This report is intended for officials and analysts in states that are considering adopting the SCC as a policymaking and monitoring tool, refining how they already use it, or updating their preferred values in light of recent and ongoing scientific advances in methods and estimates. Section 2 provides background on the concept of the SCC and summarizes how US states have been using it. Section 3 provides a high-level summary of how the SCC is calculated, with particular attention to the four-module framework that underlies the SCC estimates from RFF and EPA. Finally, Section 4 summarizes considerations for jurisdictions designing their own guidance while providing detailed instructions on how states might apply it for their own policymaking purposes.

Date: 2026-08-13
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