Climate Impacts Reflected in the SCC Estimates

The social cost of carbon (SCC) 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 emissions, and this tool is regularly used by many federal and state policymakers to evaluate and craft climate-related policies.1  However, the SCC 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 SCC estimates (such as the “central” estimate of about $56 per ton of carbon dioxide3 ) 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 Increases in yield variability Excluded
Agriculture Economic Change in food quality, including nutrition content Excluded
Agriculture Economic Increased pest and disease damage Excluded
Agriculture Economic Flood and sea level impacts on food infrastructure and farmland Excluded
Agriculture Economic Food security Excluded
Agriculture Economic Food price stability and price spikes Excluded
Forestry Economic Shifting geographic range Included
Forestry Economic Increased pest and disease damage Excluded
Forestry Economic Increasing risk of wildfire Excluded
Forestry Economic CO2 fertilization Included
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 Changing precipitation Included
Fresh water availability Economic Melting snowpack Excluded
Fresh water availability Economic Changing water quality Excluded
Fresh water availability Economic Competing uses, including overexploitation of groundwater resources Excluded
Fresh water availability Economic Water security and water prices Excluded
Fisheries and aquatic tourism Economic Shifted geographic ranges, seasonal activities, migration patterns, abundances, and species interactions Excluded
Fisheries and aquatic tourism Economic Reduced growth and survival of shellfish and other calcifiers Excluded
Fisheries and aquatic tourism Economic Coral bleaching Excluded
Fisheries and aquatic tourism Economic Decrease in catch potential at some latitudes 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 Melting permafrost Excluded
Property and infrastructure loss Economic Wildfires Excluded
Property and infrastructure loss Economic Coastal property losses due to storms, flooding, and sea level rise Included
Property and infrastructure loss Economic Inland property loss due to extreme weather events, including flooding Excluded
Declining economic growth Economic Labor productivity Excluded
Declining economic growth Economic Prolonging and creating new types of poverty traps Excluded
Declining economic growth Economic Diverted R&D funds for adaptation research Excluded
Declining economic growth Economic Lost land, capital, and infrastructure Excluded
Human health 6 Non-Market Coastal mortality from flooding and storms 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
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
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 SCC 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 SCC 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 ↩︎