The social cost of carbon (SCC) is vital to estimate as it quantifies the hidden costs of climate change, like health impacts and economic losses. Policymakers rely on it to set carbon pricing and guide climate policies, ensuring efficient mitigation strategies and incentivizing emissions reductions, thus crucial in combatting climate change effectively. The social cost of carbon is highly sensitive to the discount rate because it determines the present value of future damages, with lower rates assigning more weight to future impacts, emphasizing long-term consequences in policy decisions. Ethics plays a pivotal role in estimating the SCC and discount rate, as they reflect society’s values in addressing intergenerational equity and the moral obligation to protect future generations from climate harm.

See the latest US Environment Protection Agency guidance here.

Ben’s work  has been cited numerous times by the US Environmental Protection Agency Interagency Working Group’s report on cost benefit analysis, particularly in relation to social discounting and the social cost of carbon. And also in the European Commission’s Cost Benefit Analysis guidelines.

Ben’s paper ‘Discounting Disentangled‘ was cited and used in a court case that led to the New York State to reduce its Social Discount Rate to 2% rather than 3%, which made the social cost of carbon increase from $40 to $125 per tonne of CO2. More info here.

Several papers were cited in the Intergovernmental Panel on Climate Change’s 6th Assessment Report on Mitigating Climate Change in 2022, including ‘Climate economics support for the UN climate targets‘, Nature Climate Change (2020).

We recently commented on the UN Framework Convention on Climate Change’s (UNFCCC) Article on the use of market mechanisms to achieve emission reduction targets. Our intervention is important because we wanted to alert the UNFCCC to the potential frailties of market based approaches and highlight how they can be improved.

The contribution to the public consultation on the measurement of the social cost of carbon can be found here: Public Consultation Response Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources: Oil and Natural Gas Sector Climate Review: EPA-HQ-OAR-2021-0317-1460

The latter is one of the few specifically identified in EPA’s consultation response amongst the several thousand submitted, and we spoke to the team working on this as well as providing a number of email responses to specific questions they asked us.