Climate Impacts Reflected in the Social Cost of Greenhouse Gases Estimates

The social cost of greenhouse gases (SC-GHG) developed by the Interagency Working Group (IWG) on the Social Cost of Greenhouse Gases is currently the best available estimate for the damage done by each additional ton of carbon dioxide, methane, or nitrous oxide emissions, and this tool is regularly used by many federal and state policymakers to evaluate and craft climate-related policies. 1  However, the SC-GHG does not account for many of the severe consequences of climate change identified by the Intergovernmental Panel on Climate Change (IPCC). 2  This means that the 2016 IWG SC-GHG estimates (such as the “central” estimate of about $56 per ton of carbon dioxide 3 ) should be viewed as a lower bound for expected damages. 4

The tables below show which climate impact drivers and which climate impacts are reflected (included or partially included) and which are not reflected (excluded) in the current IWG social cost estimates. 5

How the IWG SCC Accounts for IPCC Climate Impact Drivers

Climate-Related Drivers of Impacts	Status
Warming trend	Included
Precipitation	Included
Damaging cyclones	Included
Carbon dioxide concentration	Included
Sea level rise	Included
Flooding Coastal flooding is included and inland flooding is excluded	Partially Included
Storm surge Partially included, but the models fail to account for the combined effect of sea level rise and increased intensity of coastal storms	Partially Included
Extreme temperature The health impacts of extreme temperatures are the only impact considered by IAMs	Excluded
Drying trend	Excluded
Extreme precipitation	Excluded
Snow cover	Excluded
Ocean acidification	Excluded

IPCC Climate Impacts in the IWG SCC Estimates

Sector	Damage Type	Impact	Status
Agriculture	Economic	Impacts on average crop yields due to average temperature increases and CO2 fertilization effect Models are more optimistic than current observations, potentially due to optimistic assumptions about CO2 fertilization effect	Included
Agriculture	Economic	Food price stability and price spikes	Excluded
Agriculture	Economic	Food security	Excluded
Agriculture	Economic	Flood and sea level impacts on food infrastructure and farmland	Excluded
Agriculture	Economic	Increased pest and disease damage	Excluded
Agriculture	Economic	Change in food quality, including nutrition content	Excluded
Agriculture	Economic	Increases in yield variability	Excluded
Forestry	Economic	Increasing risk of wildfire	Excluded
Forestry	Economic	Increased pest and disease damage	Excluded
Forestry	Economic	Shifting geographic range	Included
Forestry	Economic	CO2 fertilization	Included
Fresh water availability	Economic	Water security and water prices	Excluded
Fresh water availability	Economic	Water supply system losses and disruptions While general infrastructure costs of coastal extreme events ( flooding and storms) are included, inland extreme events are omitted. Also, IAMs exclude more long-term costs from these infrastructure losses, including human suffering.	Partially Included
Fresh water availability	Economic	Competing uses, including overexploitation of groundwater resources	Excluded
Fresh water availability	Economic	Changing water quality	Excluded
Fresh water availability	Economic	Melting snowpack	Excluded
Fresh water availability	Economic	Changing precipitation	Included
Fisheries and aquatic tourism	Economic	Decrease in catch potential at some latitudes	Excluded
Fisheries and aquatic tourism	Economic	Coral bleaching	Excluded
Fisheries and aquatic tourism	Economic	Reduced growth and survival of shellfish and other calcifiers	Excluded
Fisheries and aquatic tourism	Economic	Shifted geographic ranges, seasonal activities, migration patterns, abundances, and species interactions	Excluded
Energy	Economic	Energy system losses and disruptions While general infrastructure costs of coastal extreme events (flooding and storms) are included, inland extreme events are omitted. Also, IAMs exclude more long-term costs from these infrastructure losses, including human suffering and increases in energy prices.	Partially Included
Property and infrastructure loss	Economic	Wildfires	Excluded
Property and infrastructure loss	Economic	Melting permafrost	Excluded
Property and infrastructure loss	Economic	Inland property loss due to extreme weather events, including flooding	Excluded
Property and infrastructure loss	Economic	Coastal property losses due to storms, flooding, and sea level rise	Included
Declining economic growth	Economic	Lost land, capital, and infrastructure	Excluded
Declining economic growth	Economic	Diverted R&D funds for adaptation research	Excluded
Declining economic growth	Economic	Prolonging and creating new types of poverty traps	Excluded
Declining economic growth	Economic	Labor productivity	Excluded
Human health 6	Non-Market	Coastal mortality from flooding and storms	Included
Human health	Non-Market	Spread in geographic range of vector-borne diseases Significant diseases are included, though Lyme disease is excluded	Included
Human health	Non-Market	Wildfires	Excluded
Human health	Non-Market	Mortality from inland extreme weather events	Excluded
Human health	Non-Market	Food and water availability	Excluded
Human health	Non-Market	Heat related deaths	Partially Included
Human health	Non-Market	Water-borne diseases	Partially Included
Human health	Non-Market	Morbidity: non-fatal illness and injury	Partially Included
Human health	Non-Market	Air quality Air quality is included in DICE, though it does not account for changes due to pollen or wildfire	Partially Included
Ecosystems 7	Non-Market	Shifted geographic ranges, seasonal activities, migration patterns, abundances, and species interactions The value of ecosystems and biodiversity are included in general terms, not specific to any one damage	Included
Ecosystems	Non-Market	Extinction and biodiversity loss	Included
Ecosystems	Non-Market	Non-climate stressors: habitat modification, over-exploitation, pollution, and invasive species	Excluded
Ecosystems	Non-Market	Abrupt and irreversible regional-scale change in the composition, structure, and function of ecosystems Environmental tipping points in non-climate systems are excluded	Excluded
Ecosystems	Non-Market	Effects of ocean acidification on polar ecosystems and coral reefs Ocean acidification is excluded	Excluded
Ecosystems	Non-Market	Loss of habitat to sea level rise Wetland loss explicitly modeled in FUND, and thus partially in PAGE	Partially Included
Migration	Social	Increased displacement FUND partially accounts for migration, but uses arbitrary measurements of resettlement and costs	Excluded
Social and political instability	Social	Violence, civil war, and inter-group conflict	Excluded
Social and political instability	Social	National Security	Excluded
Non-climate stressors	Non-Climate Stressors	Climate-related hazards exacerbate other stressors	Excluded
Multidimensional inequalities	Non-Climate Stressors	Inequalities, including income	Excluded
Violent conflict	Non-Climate Stressors	Violent conflict increases vulnerability	Excluded
Climate tipping points 8	Tipping Points	Reduction in terrestrial carbon sink	Partially Included
Climate tipping points	Tipping Points	Boreal tipping point	Partially Included
Climate tipping points	Tipping Points	Amazon tipping point	Partially Included
Climate tipping points	Tipping Points	Other tipping points	Partially Included
Ecosystem tipping points	Tipping Points	Abrupt and irreversible regional-scale change in the composition, structure, and function of ecosystems Environmental tipping points in non-climate systems are excluded	Excluded

1. See e.g., Iliana Paul et al. Institute for Policy Integrity, The Social Cost of Greenhouse Gases and State Policy (2017).  ↩︎
2. Peter Howard, Cost of Carbon Project. Omitted Damages: What’s Missing from the Social Cost of Carbon (2014); “Playing Catch Up to the IPCC,” CostOfCarbon.org (Apr. 22, 2014).  ↩︎
3. For year 2025 emissions in 2020$. See Interagency Working Grp. On Soc. Cost Of Greenhouse Gases, Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide – Interim Estimates under Exec. Order 13,990  at 5 (2021).  ↩︎
4. For more on why the IWG SC-GHG should be considered a lower bound, see Richard L. Revesz et al., Global Warming: Improve Economic Models of Climate Change, 508 Nature 173 (2014).  ↩︎
5. Additional climate impacts may be included in future SC-GHG modeling. Specifically, the recently reconvened IWG has been tasked with reviewing and updating the social cost estimates in an effort to ensure that any new values “are based on the best available economics and science,” and adequately take into account climate risk, environmental justice, and intergenerational equity. See Exec. Order 13,990, 86 Fed. Reg. 7037 (Jan. 1, 2021).  ↩︎
6. Cardiovascular, respiratory disorders, diarrhea, and morbidity for some health impacts are included in FUND, and thus partially included in PAGE ↩︎
7. Terrestrial, freshwater, and marine ecosystems and wildlife ↩︎
8. Known tipping points are modeled as a single event, instead of multiple events. Furthermore, fat tails, which capture unknown tipping points, are excluded ↩︎