The Social Cost of Greenhouse Gases
The social cost of greenhouse gases (SC-GHG) is a suite of metrics designed to quantify and monetize climate damages, representing the net economic cost of climate pollution to society. Simply put, the SC-GHG is a monetary estimate of the damage done by each ton of greenhouse gases that is released into the air.
The SC-GHG is a powerful tool that can streamline decisionmaking and underpin economically efficient policies. Many decisionmakers—including policymakers in the federal government, numerous U.S. states, and some foreign nations—are now using the SC-GHG to craft smarter energy and climate policies that benefit society.
Best Available Estimate
The SC-GHG can be used to evaluate policies and guide decisions that affect greenhouse gas emissions, including:
- regulatory impact analysis for proposed and final rules
- environmental impact statements for energy projects
- electricity ratemaking
- resource management policy and royalty setting
- setting emissions caps
- establishing a carbon price