Exploring the Social Cost of Carbon for Internal Carbon Pricing: Insights from a Technology Probe
29 Pages Posted: 24 Apr 2025
Date Written: March 24, 2025
Abstract
Internal carbon pricing (ICP) can be a powerful means of reducing greenhouse gas emissions for organizations. However, current carbon pricing is well below optimal levels as described by the Social Cost of Carbon (SCC). In this study, we construct a technology probe that casts SCC as a form of carbon pricing that allows sustainability professionals to set a price by adjusting a single ethical knob - the discount rate -which determines how much to "discount the future". This allows us to investigate their perceptions and attitudes towards ICP, SCC, and organizational responsibility towards society and the environment. We discover that framing the SCC purely as a function of the discount rate makes it a robust indicator of climate responsibility at an organizational level. We find that organizations are at various stages of adopting internal carbon prices, highlighting the need for capacity building and consulting support. Introducing SCC as a significant metric in crosscutting reporting frameworks may promote its widespread adoption as an unbiased measure of organizational commitment, and spur organizational climate action that go beyond token gestures or mere lip service.
Keywords: Internal Carbon Pricing, Social Cost of Carbon, Organizational responsibility, Carbon emissions
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