Climate risks and carbon prices: Revising the social cost of carbon
How much economic damage is done by one ton of carbon dioxide emissions? That number, called the “social cost of carbon,” or SCC, provides one measure of the urgency of the problem of climate change. It has been estimated by a US government working group at a mere $21 as of 2010 – the equivalent of just $0.21 for every gallon of gasoline. This is not a large number. It seems to suggest that we don’t need to do much about climate change: if a proposed climate policy would cost more than $21 per ton of reductions in carbon dioxide emissions, then, according to this calculation, it’s not worth doing.