Exploring the Social Cost of Carbon for Internal Carbon Pricing: Insights from a Technology Probe

29 Pages Posted: 24 Apr 2025

See all articles by Ando Shah

Ando Shah

University of California, Berkeley - University of California, Berkeley, School of Information, Students

Zoya Abdullah

UC Berkeley

John Chuang

University of California, Berkeley - School of Information

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

Suggested Citation

Shah, Ando and Abdullah, Zoya and Chuang, John, Exploring the Social Cost of Carbon for Internal Carbon Pricing: Insights from a Technology Probe (March 24, 2025). Available at SSRN: https://ssrn.com/abstract=5191863 or http://dx.doi.org/10.2139/ssrn.5191863

Ando Shah (Contact Author)

University of California, Berkeley - University of California, Berkeley, School of Information, Students ( email )

United States

HOME PAGE: http://ando.xyz

Zoya Abdullah

UC Berkeley ( email )

John Chuang

University of California, Berkeley - School of Information ( email )

102 South Hall
Berkeley, CA 94720-4600
United States

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