Emitting carbon dioxide (CO2 )—and other greenhouse gases—imposes a cost on society because it contributes to damages from climate change. This "social cost" is also known as an "externality," in that the emitter does not bear this cost. The "Social Cost of Carbon" (SCC), then, is the "marginal monetized externality value" of damages from CO2 emissions, where "marginal" refers to the next incremental unit of emissions. As damages from climate change become more evident, it becomes increasingly useful in formulating public policy (especially in connection with attendant benefit-cost analysis of that policy) to employ an SCC—that is, a numerical, non-zero value for climate damages. This paper examines the process in the U.S. government of specifying an SCC.
The authors consider the role of integrated assessment models in estimating the social cost of carbon—an estimation that is important in the formulation of U.S. climate policy.
"Facilitating Linkage of Heterogeneous Regional, National, and Sub-National Climate Policies Through a Future International Agreement"
Linkage among emissions-reduction systems can reduce cost and advance equity, enhancing the chances for success of a new 2015 climate agreement.
If negotiations at COP 17 in Durban fail to produce an agreement on a Kyoto second-commitment period and on a broader climate regime, linking national climate policies would become more salient as a possible de facto international climate regime. Linking cap-and-trade systems is relatively straightforward, but linking disparate policies is harder. Metcalf and Weisbach address the linkage of heterogeneous climate policies.