Climate Impacts Reflected in the Social Cost of Greenhouse Gases Estimates
The social cost of greenhouse gases (SC-GHG) reflects the economic cost of the damage caused by each additional ton of carbon dioxide, methane, or nitrous oxide emissions. Currently, federal agencies apply valuations first developed in 2010 by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). Those valuations, while reflecting the best science available at the time, are now widely recognized to understate the true costs of climate change.
A key reason for this underestimated is that the IWG’s estimates do not account for many of the severe consequences of climate change identified by the Intergovernmental Panel on Climate Change (IPCC). Accordingly, the IWG estimates should be viewed as a lower bound for expected damages.
In late 2022, the Environmental Protection Agency released draft updated SC-GHG values that reflect state-of-the-art advances in science and economics. EPA’s draft updated values are substantially higher than the IWG’s estimates. However, because EPA’s estimates continue to omit many key impacts, they are also underestimates.
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.
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 1 | 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 2 | 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 3 | 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 |
- Cardiovascular, respiratory disorders, diarrhea, and morbidity for some health impacts are included in FUND, and thus partially included in PAGE ↩︎
- Terrestrial, freshwater, and marine ecosystems and wildlife ↩︎
- Known tipping points are modeled as a single event, instead of multiple events. Furthermore, fat tails, which capture unknown tipping points, are excluded ↩︎
