Since then, federal agencies like the EPA have been relying on an “interim cost” to inform important regulatory decisions that is seven times lower than the IWG’s estimate - in some cases, using estimates as low as $1 per ton. However, the Trump administration disbanded the Interagency Working Group in 2017. In 2017, the National Academies conducted a thorough assessment to provide guidance on updating the tool and suggestions for continuing to build on and strengthen it. Until it was disbanded, the Interagency Working Group had periodically updated its modeling to ensure that the social cost of carbon remains informed by current science. ![]() The process allowed for repeated public comment as well as input from the National Academies of Sciences, Engineering and Medicine. The Interagency Working Group included representatives from all relevant executive branch agencies – from the Department of Agriculture to the Council of Economic Advisors – and developed the social cost of carbon by relying on the latest peer-reviewed science and economics available. The federal government's estimate of the social cost of carbon was developed through an extensive, rigorous process. Court of Appeals decision required the federal government to account for the economic effects of climate change in regulatory cost-benefit analyses, an Interagency Working Group began in 2009 to develop a uniform estimate for the social cost of carbon that could be used consistently by agencies across the government. Bush Administration, federal agencies including the Environmental Protection Agency and the Department of Transportation began to develop their own estimates of the social cost of carbon.Īfter a 2008 U.S. ![]() ![]() How companies set internal prices on carbonīeginning in the early 1980's, former President Ronald Reagan called for federal agencies to analyze the benefits and costs of their major regulatory actions, and since then, both Democratic and Republican presidents have done the same. A number of other countries, including Canada, Mexico, and the United Kingdom, have similar estimates of the social cost of carbon for use in government policy making. In the same way, the social cost of carbon can help inform and improve the decisions the federal government makes. Many of the world's largest companies already use internal measures much like the social cost of carbon in their own decision-making processes. Private sector leaders have long considered the serious impacts of climate change when making decisions about capital investments and even corporate strategy. By properly accounting for the damages caused by carbon pollution, agencies can properly evaluate policies that affect greenhouse gas emissions. This vital tool helps federal agencies make sound decisions to protect current and future generations of Americans. ![]() For that reason, many experts agree this is far lower than the true costs of carbon pollution. While this is the most robust and credible figure available, it does not yet include all of the widely recognized and accepted scientific and economic impacts of climate change. The current central estimate of the social cost of carbon is over $50 per ton in today's dollars. The social cost of carbon is a measure of the economic harm from those impacts, expressed as the dollar value of the total damages from emitting one ton of carbon dioxide into the atmosphere. These impacts can cost businesses, families, governments and taxpayers hundreds of billions of dollars through rising health care costs, destruction of property, increased food prices, and more. Climate change causes devastating impacts: extreme weather events like flooding and deadly storms the spread of disease sea level rise increased food insecurity and other disasters.
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