Using and Improving the Social Cost of Carbon

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Feb. 4, 2014


William Pizer, Matthew Adler, Joseph E. Aldy, David Anthoff, Maureen L. Cropper, Kenneth Gillingham, Michael Greenstone, Brian Murray, Richard G. Newell, R. Richels, A. Rowell, S. Waldhoff, and Jonathan Wiener


Journal Article

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The social cost of carbon (SCC) is a crucial tool for economic analysis of climate policies. The SCC estimates the dollar value of reduced climate change damages associated with a one-metric-ton reduction in carbon dioxide (CO2) emissions. Although the conceptual basis, challenges, and merits of the SCC are well established, its use in government cost-benefit analysis (CBA) is relatively new. In light of challenges in constructing the SCC, its newness in government regulation, and the importance of updating, we propose an institutional process for regular SCC review and revision when used in government policy-making and suggest how scientists might contribute to improved SCC estimates.


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