Comprehensive evidence implies a higher social cost of CO2

Kevin Rennert, Frank Errickson, Brian C. Prest, Lisa Rennels, Richard G. 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. StockTammy Tan, Mark Watson, Tony E. Wong, David Anthoff

Research output: Contribution to journalArticlepeer-review

199 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)687-692
Number of pages6
JournalNature
Volume610
Issue number7933
DOIs
StatePublished - Oct 27 2022

All Science Journal Classification (ASJC) codes

  • General

Fingerprint

Dive into the research topics of 'Comprehensive evidence implies a higher social cost of CO2'. Together they form a unique fingerprint.

Cite this