A new study led by researchers at the University of California, Berkeley, and the nonprofit Resources for the Future (RFF) estimates that the social cost of carbon — a key metric for evaluating the future cost of climate change — is more than three times the value currently used by the U.S. federal government.
The study, published today in the journal Nature, finds that each additional ton of carbon dioxide emitted into the atmosphere costs society approximately $185 per ton, which is 3.6 times the U.S. federal estimate of $51 per ton. A higher social cost of carbon indicates that reducing greenhouse gas emissions is likely to reap greater social and economic benefits than previously believed and could be used to justify more stringent climate policies.
“The social cost of carbon is the vehicle by which the work of thousands and thousands of climate scientists is incorporated into the regulatory process,” said study senior author David Anthoff, an associate professor in the Energy and Resources Group at UC Berkeley. “Our team applied the latest socioeconomic projections, climate models and risk evaluation methods to create an estimate that better reflects the true costs of climate change.”
Policies that limit the amount of carbon dioxide released into the atmosphere are often costly in the short-term, but ultimately benefit society by reducing the devastating impacts of climate change. Governments around the world use estimates of the social cost of carbon and other greenhouse gases to weigh the costs and benefits of these policies.
“Our estimate, which draws on recent advances in the scientific and economic literature, shows that we are vastly underestimating the harm of each additional ton of carbon dioxide that we release into the atmosphere,” said RFF President and CEO Richard G. Newell, who co-authored the study. “The implication is that the benefits of government policies and other actions that reduce global warming pollution are greater than has been assumed.”
To conduct the study, Anthoff and study first author Kevin Rennert, an RFF fellow, brought together a team of leading researchers in climate science, economics, demography and statistics to update the model used to estimate the social cost of carbon.
The new model uses state-of-the-art methodologies to calculate the probabilities of different socioeconomic and emissions trajectories, and to project the impacts of these changes on the global climate system. It then assesses the effects of climate change on agriculture, extreme heat, energy expenditures and sea-level rise. The estimate also incorporates an updated approach to “discounting,” which helps compare current costs with those that might be incurred in the future.
“The previous generation of models that computed the social cost of carbon had fallen behind the climate science,” said Anthoff, who is also the author of a 2021 study of the social cost of methane. “We spent a lot of time ensuring that the new model is completely in line with the latest natural climate science and incorporating new estimates of the economic damages and risks associated with climate change.”
Notably, the new model incorporates key recommendations from a 2017 National Academies of Sciences, Engineering, and Medicine report. A federal interagency working group on the social costs of greenhouse gases, disbanded during the previous administration but reestablished by an executive order from President Biden, is also updating its social cost of carbon estimate using these recommendations.
In addition to the new estimate, the research team has also published the Greenhouse Gas Impact Value Estimator (GIVE) model, which provides a transparent and accessible way for interested parties to view and build upon the data. The researchers are also releasing a new data tool, the Social Cost of Carbon Explorer, which demonstrates the mechanics of the GIVE model and allows users to develop their own social cost of carbon estimates.
“Our hope is that the freely available, open-source GIVE model we’re introducing today forms the foundation for continuous improvement of the estimates by an expanded community of scientists worldwide,” Rennert said. “A completely transparent methodology has been a guiding principle for our work, which is also directly relevant to other greenhouse gases, such as methane and nitrous oxides.”
Anthoff emphasized that the diverse expertise of the paper’s authors stems from the multi-faceted nature of the research. “Estimating the social cost of carbon requires inputs from many academic disciplines,” he said. “When we started this project, we knew that we would only succeed by assembling a team of leading researchers in each discipline to contribute their expertise. I am especially proud of the all-star group of researchers across so many leading institutions that jointly worked on this paper.”