A new analysis of the social cost of carbon — the total economic damage done by greenhouse pollution — finds that official government estimates are dangerously low. The Obama administration, in federal guidance, estimates the social cost of carbon to be $21 per ton of carbon dioxide emissions, about $0.21 per gallon of gasoline. Using a range of more credible numbers for the physics of climate change and differing economic discount rates, the Economics for Equity and Environment Network report by economists Frank Ackerman and Elizabeth Stanton find that the SCC in 2010 likely lies between $28 and $893 per ton, and will rise in 2050 to between $64 and $1,550 a ton.
“As long as there is a credible risk that the SCC, or damages from a ton of emissions, could be above the cost of maximum feasible abatement, then it is worth doing everything we can to reduce emissions. Cost-benefit analysis under such conditions coincides with a precautionary approach that calls for taking immediate, large-scale action to phase out carbon emissions and protect the Earth’s climate.”