Omitted Damages: What’s Missing from the Social Cost of Carbon

Environmental & Energy Valuation News

New York University, Institute for Policy Integrity | Natural Resources Defense Council | Environmental Defense Fund / by Peter Howard

The 2013 Interagency Working Group on the Social Cost of Carbon (IWG) updated the U.S. social cost of carbon (SCC) for 2015 from a central value of $24 to $37 using three integrated assessment models (IAMs): DICE-2010, FUND 3.8, and PAGE09. The SCC is the additional economic damage caused by one ton of carbon dioxide. While some have questioned the increase in the SCC as too high, a thorough examination of the latest scientifi c and economic research shows that $37 should be viewed as a lower bound. This is because the studies available to estimate the SCC omit many climate impacts—eff ectively valuing them at zero. Where estimates are available for a given type of impact, they tend to include only a portion of potential harms. This paper represents the fi rst attempt
to systematically examine…

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