Estimating the Social Cost of Carbon for Use in U.S. Federal Rulemakings: A Summary and Interpretation

34 Pages Posted: 29 Mar 2011 Last revised: 24 May 2014

Michael Greenstone

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER)

Elizabeth Kopits

U.S. Environmental Protection Agency (EPA)

Maryann Wolverton

U.S. Environmental Protection Agency - National Center for Environmental Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 23, 2011

Abstract

The United States Government recently concluded a year-long process to develop a range of values representing the monetized damages associated with an incremental increase in carbon dioxide (CO2) emissions, commonly referred to as the social cost of carbon (SCC). These values are currently used in benefit-cost analyses to assess potential federal regulations. For 2010, the central value of the SCC is $21 per ton of CO2 emissions and sensitivity analyses are to be conducted at $5, $35, and $65 (2007$). This paper summarizes the methodology and process used to develop the SCC values, complemented with our own commentary about how the SCC can be used to inform regulatory decisions and areas where further research would be particularly useful.

Keywords: climate change, social cost of carbon, integrated assessment modeling, valuation of environmental quality, U.S. climate policy

JEL Classification: Q54, Q51, Q58

Suggested Citation

Greenstone, Michael and Kopits, Elizabeth and Wolverton, Maryann, Estimating the Social Cost of Carbon for Use in U.S. Federal Rulemakings: A Summary and Interpretation (March 23, 2011). MIT Department of Economics Working Paper No. 11-04. Available at SSRN: https://ssrn.com/abstract=1793366 or http://dx.doi.org/10.2139/ssrn.1793366

Michael Greenstone (Contact Author)

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Elizabeth Kopits

U.S. Environmental Protection Agency (EPA) ( email )

Ariel Rios Building
1200 Pennsylvania Ave., N.W.
Washington, DC 20460
United States

Maryann (Ann) Wolverton

U.S. Environmental Protection Agency - National Center for Environmental Economics ( email )

Washington, DC 20460
United States

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