Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis (2016)
The Interagency Working Group asked the National Academies of Sciences, Engineering, and Medicine in 2015 to review the latest research on modeling the economic aspects of climate change to inform future revisions to the social cost of carbon estimates presented in this technical support document. In January 2016, the Academies’ Committee on the Social Cost of Carbon issued an interim report that recommended against a near-term update to the social cost of carbon estimates, but included recommendations for enhancing the presentation and discussion of uncertainty around the current estimates. This revision to the TSD responds to these recommendations in the presentation of the current estimates.
Assessment of Approaches to Updating the Social Cost of Carbon: Phase 1 Report on a Near-Term Update
The social cost of carbon (SCC) for a given year is an estimate, in dollars, of the present discounted value of the damage caused by a 1-metric ton increase in CO2 emissions into the atmosphere in that year; or equivalently, the benefits of reducing CO2 emissions by the same amount in that given year. The SCC is intended to provide a comprehensive measure of the monetized value of the net damages from global climate change from an additional unit of CO2, including, but not limited to, changes in net agricultural productivity, energy use, human health effects, and property damages from increased flood risk. Federal agencies use the SCC to value the CO2 emissions impacts of various policies including emission and fuel economy standards for vehicles, regulations of industrial air pollutants from industrial manufacturing, emission standards for power plants and solid waste incineration, and appliance energy efficiency standards.