New Study by Coalition of ERG Researchers Reveals True Social Cost of Carbon
Researchers from Rausser College’s Energy and Resources Group (ERG) and Resources for the Future (RFF) have released a new estimate that the social cost of carbon (SCC), a key metric for evaluating the future cost of climate change, is more than three times the value currently used by the U.S. federal government. Published today in the journal Nature, the study finds that each additional ton of carbon dioxide emitted into the atmosphere costs society approximately $185 per ton, which is 3.6 times the U.S. federal estimate of $51 per ton. A higher social cost of carbon indicates that reducing greenhouse gas emissions is likely to reap greater social and economic benefits than previously believed, and could be used to justify more stringent climate policies. “The social cost of carbon is the vehicle by which the work of thousands and thousands of climate scientists is incorporated into the regulatory process,” said study senior author David Anthoff, an associate professor in ERG. “Our team applied the latest socioeconomic projections, climate models, and risk evaluation methods to create an estimate that better reflects the true costs of climate change.” To conduct the study, Anthoff and study first author Kevin Rennert, an RFF Fellow, brought together a team of leading researchers in climate science, economics, demography, and statistics. The research team included current ERG graduate students Cora Kingdon and Lisa Rennels and alumni Frank Errickson, PhD ’20 ERG, and Richard Plevin, PhD ’10 ERG. The group helped develop Mimi.jl, a new software package for creating, running, and performing analyses on Integrated Assessment Models (IAMs), the type of model used to estimate the social cost of carbon. “For a student interested in both software engineering and climate change economics, this experience was incredibly valuable,” said Rennels, who was a lead developer of both Mimi.jl and the new model. “I spent my first years at ERG developing our open-source software platform, and then used what I’d built to construct a new model with the potential to actually impact policy.” She adds that it is “crucial” for climate policy to be rooted in the latest available science, especially when governments around the world use estimates of the social cost of carbon and other greenhouse gasses to weigh the costs and benefits of emissions reduction strategies. “The SCC is a key policy metric that makes it possible for decision makers to account for the effects of climate change,” said Rennels. “Our team also emphasizes that characterizing uncertainty and promoting model transparency are key practices for supporting such decision makers.” Kingdon has been involved with the project for many years, first joining as an undergraduate majoring in environmental economics and policy. She initially worked as a software developer with Anthoff through Berkeley’s Undergraduate Research Apprentice Program and joined RFF as a research assistant after graduating. “Being part of this team both at Berkeley and RFF was an incredibly formative experience for me as an early-career researcher,” said Kingdon. “Working alongside so many distinguished scientists, economists, and policy makers was an invaluable opportunity to participate in policy-relevant interdisciplinary research, and ultimately guided my path back to the Energy and Resources Group.” “Grappling with and attempting to characterize future climatic and socio-economic uncertainty” is what spurred Kingdon to return to ERG and pursue graduate studies. Interested in the field of decision science, she intends to study the implications of decision making under deep uncertainty—specifically in the context of urban adaptation to climate change. Errickson was another lead developer of the new IAM who made key contributions to the climate and sea-level rise components, and Plevin was a core developer on the Mimi.jl software package used to build the model. Anthoff emphasized that the diverse expertise of the paper’s authors stems from the multi-faceted nature of the research. “Estimating the social cost of carbon requires inputs from many academic disciplines,” he said. “When we started this project, we knew that we would only succeed by assembling a team of leading researchers in each discipline to contribute their expertise. I am especially proud of the all-star group of researchers across so many leading institutions that jointly worked on this paper.” Learn more about the model at Berkeley News and the Resources for the Future website.