The Social Cost of Carbon
Editor: Robert Kopp, U.S Department of Energy, Washington, DC, Richard Tol, Department of Economics, University of Sussex, and Stephanie Waldhoff, Joint Global Change Research Institute, Pacific Northwest National Laboratory
The social cost of carbon—the marginal external costs resulting from enhanced climate change due to carbon dioxide emissions—is an important concept in environmental policy. It is closely related to the Pigou tax, the price that should apply to emissions if the aim is to maximise global welfare. The social cost of carbon could therefore theoretically inform assessment of the desirable intensity of climate policy, and it plays a crucial role in any cost-benefit analysis of emission abatement initiatives.
There are two major challenges to estimating the social cost of carbon. First, everything about climate change and its impacts is uncertain. This is partly because climate change is primarily a problem in the future; and partly because both the human and natural components of the Earth system—and thus both the drivers and the impacts of global climate change—are complex and only partially understood. Second, any assessment of the seriousness of climate change requires value judgements about the relative importance of temporal impacts: those that occur now and in the future; spatial impacts: those that impact people near and far across the globe; and the risk aversion of society for uncertain impacts: the more severe damages that may occur less likely, but still plausible, futures.
The aim of this special issue is to revisit the social cost of carbon dioxide and other greenhouse gases. The special issue is open to new estimates of its size, its composition, and its sensitivity to assumptions; to novel discussions of the conceptual and theoretical issues in estimating the social cost of carbon; and to assessments of its potential use in regulation and policy.