The role of the social cost of carbon in policy

Wiley Interdisciplinary Reviews: Climate Change

Volumn 3, Issue 2, 2012, Pages 195-212

  Rose, Steven K ^a  

^a Electric Power Research Institute EPRI   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

CARBON DIOXIDE; CLIMATE CHANGE; GREENHOUSE GASES;

CLIMATE POLICY; ECONOMIC PRINCIPLE; FEDERAL REGULATIONS; GREENHOUSE GAS (GHG); KEY ISSUES; MARGINAL VALUES; SOCIAL COST OF CARBON; STATE OF THE ART;

COST BENEFIT ANALYSIS;

EID: 84858633540     PISSN: 17577780     EISSN: 17577799     Source Type: Journal    
DOI: 10.1002/wcc.163     Document Type: Review

References (68)

1. Center for Biological Diversity vs. National Highway Traffic Safety Administration, United States Court of Appeals for the Ninth Circuit, No. 06-71891, November 15, 2007.
2. Tol RSJ. The social cost of carbon: trends, outliers and catastrophes. Economics: The Open-Access, Open-Assessment E-Journal, No. 2008-25, August 12, 2008. Available at: (Accessed February 25, 2012).
3. U.S. DOE (United States Department of Energy). Department of Energy, 10 CFR Part 431 Energy Conservation Program: Energy Conservation Standards for Small Electric Motors; Final Rule. Federal Register, Vol. 75, No. 45, March 9, 2010, 10874-10948.
4. U.S. Government Interagency Working Group. Interagency Working Group on Social Cost of Carbon, U.S. Government. Appendix 15A. Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866, ' Issued with U.S. DOE small electric motors rule, March 2010. Available at: (Accessed February 4, 2012).
5. Watkiss P, Hope C. Using the social cost of carbon in regulatory deliberations. WIREs Clim Change 2011, 2:886-901. doi:10.1002/wcc.140.
6. U.S. EPA-U.S. NHTSA. Environmental Protection Agency, 40 CFR Parts 85, 86, and 600, Department of Transportation National Highway Traffic Safety Administration, 49 CFR Parts 531, 533, 536, 537 and 538, Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule. Federal Register, Vol. 75, No. 88, May 7, 2010, 25324-25728.
7. U.S. EPA-U.S. NHTSA. Environmental Protection Agency, 40 CFR Parts 86 and 600, Department of Transportation National Highway Traffic Safety Administration, 49 CFR Parts 531, 533, 537, Proposed Rulemaking To Establish Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Proposed Rule. Federal Register, Vol. 74, No. 186, September 28, 2009, 49454-49789.
8. U.S. DOE (United States Department of Energy). Department of Energy, 10 CFR Part 431 Energy Conservation Program: Energy Conservation Standards for Refrigerated Bottled or Canned Beverage Vending Machines; Final Rule. Federal Register, Vol. 74, No. 167, August 31, 2009, 44914-44968.
9. U.S. EPA (United States Environmental Protection Agency). Environmental Protection Agency, 40 CFR Part 80, Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel Standard Program; Proposed Rule. Federal Register, Vol. 74, No. 99, May 26, 2009, 24904-25143.
10. U.S. EPA (United States Environmental Protection Agency). Draft Regulatory Impact Analysis: Changes to Renewable Fuel Standard Program, Assessment and Standards Division Office of Transportation and Air Quality U.S. Environmental Protection Agency, 2009. Available at: (Accessed February 25, 2012).
11. U.S. NHTSA (United States Department of Transportation National Highway Traffic Safety Administration). 49 CFR Parts 523, 531, 533, 534, 536 and 537, Average Fuel Economy Standards Passenger Cars and Light Trucks Model Year 2011; Final Rule. Federal Register, Vol. 74, No. 59, March 30, 2009, 14196-14444.
12. U.S. EPA (United States Environmental Protection Agency). Environmental Protection Agency, Advanced Notice of Proposed Rulemaking (ANPR): Regulating Greenhouse Gas Emissions under the Clean Air Act, 2008. Available at: (Accessed February 25, 2012).
13. U.S. EPA (United States Environmental Protection Agency). Technical Support Document on Benefits of Reducing GHG Emissions, June 12, 2008, for U.S. EPA Advanced Notice of Proposed Rulemaking (ANPR): Regulating Greenhouse Gas Emissions under the Clean Air Act, 2008. Available at: (Accessed February 4, 2012).
14. U.S. DOE (United States Department of Energy). Department of Energy, 10 CFR Parts 430, Energy Conservation Program: Energy Conservation Standards for Certain Consumer Products (Dishwashers, Dehumidifiers, Electric and Gas Kitchen Ranges and Ovens, and Microwave Ovens) and for Certain Commercial and Industrial Equipment (Commercial Clothes Washers), Final Rule. Federal Register, Vol. 74, No. 66, April 8, 2008, 16040-16096.
15. U.S. DOE (United States Department of Energy). Department of Energy, 10 CFR Part 431, Energy Conservation Program for Commercial and Industrial Equipment: Packaged Terminal Air Conditioner and Packaged Terminal Heat Pump Energy Conservation Standards: Final Rule. Federal Register, October 7, 2008, 58813-58814.
16. U.S. NHTSA (United States Department of Transportation National Highway Traffic Safety Administration). 49 CFR Parts 523, 531, 533, 534, 536 and 537, Average Fuel Economy Standards, Passenger Cars and Light Trucks; Model Years 2011-2015; Proposed Rule. Federal Register, Vol. 73, No. 86, May 2, 2008, 24352-24487.
17. Defra (U.K. Department for Environment Food and Rural Affairs). The Social Cost of Carbon and the Shadow Price of Carbon: What They are, and How to Use Them in Economic Appraisal in the UK. Economics Group, Defra, December 2007. Available at: (Accessed February 25, 2012).
18. Clarkson R, Deyes K. Estimating the social cost of carbon emissions. Department for Environment Food and Rural Affairs (DEFRA), Working Paper 140, 2002.
19. U.S. EPA-U.S. NHTSA. Environmental Protection Agency, 40 CFR Parts 85, 86, and 600, Department of Transportation National Highway Traffic Safety Administration, 49 CFR Parts 531, 533, 536, and 537, 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards; Proposed Rule. Federal Register, Vol. 76, No. 231, December 1, 2011, 74854-75420.
20. IPCC WGI. Climate Change 2007-The Physical Science Basis Contribution of Working Group I to the Fourth Assessment Report of the IPCC, 2007.
21. Rose SK. Federal decision-making on the uncertain impacts of climate change: incremental vs. non-incremental climate decisions. In: Gulledge J, Richardson LJ, Adkins L, and Seidel S, eds. Assessing the Benefits of Avoided Climate Change: Cost-Benefit Analysis and Beyond. Washington, DC: Pew Center on Global Climate Change; 2010.
22. Nordhaus W. A Question of Balance: Weighing the Options on Global Warming Policies. New Haven, CT: Yale University Press; 2008.
23. Anthoff D, Tol RSJ. FUND Technical Description, 2008. Available at: (Accessed February 25, 2012).
24. Hope C. The marginal impact of CO2 from PAGE2002: an integrated assessment model incorporating the IPCC's five reasons for concern. Integr Assess J 2006, 6:19-56.
25. Clarke L, Edmonds J, Krey V, Richels R, Rose S, Tavoni M. International climate policy architectures: Overview of the EMF 22 International Scenarios. Energy Econ 2009, 31(suppl 2):S64-S81.
26. IPCC WGIII. Climate Change 2007-Mitigation Contribution of Working Group III to the Fourth Assessment Report of the IPCC, 2007.
27. Hope C. The social cost of carbon: what does it actually depend on? Clim Policy 2006, 6:565-572.
28. IPCC WGII. Climate Change 2007-Impacts, Adaptation and Vulnerability Contribution of Working Group II to the Fourth Assessment Report of the IPCC, 2007.
29. Solomon S, Plattnerb G-K, Knuttic R, Friedlingstein P. Irreversible climate change due to carbon dioxide emissions. Proc Natl Acad Sci 2009, 106:1704-1709.
30. Moss RH, Edmonds JA, Hibbard KA, Manning MR, Rose SK, van Vuuren DP, Carter TR, Emori S, Kainuma M, Kram T, et al. The next generation of scenarios for climate change research and assessment. Nature 2010, 463:747-756.
31. Warren R, Hope C, Mastrandrea MD, Tol RSJ, Adger N, Lorenzoni I. Spotlighting Impacts in Integrated Assessment. Research report prepared for the Stern Review on the Economics of Climate Change. Tyndall Working Paper 91. Available at: (Accessed February 4, 2012).
32. Mastrandrea M. Calculating the benefits of climate policy: examining the assumptions of integrated assessment models. Technical report. Washington, DC: Pew Center on Global Climate Change; 2009, 60 pp. Available at: (Accessed February 4, 2012).
33. Anthoff D, Rose SK, Tol RSJ, Waldhoff S. Regional and sectoral estimates of the social cost of carbon: an application of FUND. ESRI Working Paper No. 375, 2011. Available at: (Accessed February 4, 2012).
34. Goulder LH. Benefit-cost analysis, individual differences, and third parties. In: Zerbe RO, ed. Research in Law and Economics, vol 23. Emerald Group Publishing Limited; 2007, 67-86.
35. Waldhoff S, Anthoff D, Rose S, Tol RSJ. The marginal damage costs of different Greenhouse gases: an application of FUND. Discussion Paper No. 2011-43. October 14, 2011. Available at: (Accessed February 4, 2012).
36. U.S. CBO (U.S. Congressional Budget Office). Uncertainty in Analyzing Climate Change: Policy Implications. Washington, DC: The Congress of the United States; 2005.
37. Anthoff D, Tol R, Yohe G. Risk aversion, time preference, and the social cost of carbon. Environ Res Lett 2009, 4:7.
38. Newbold S, Daigneault A. Climate response uncertainty and the benefits of greenhouse gas emissions reductions. Environ Res Econ 2009, 44:351-377.
39. Manne A, Richels R. Buying Greenhouse Insurance-The Economic Costs of Carbon Dioxide Emission Limits. Cambridge, MA: MIT Press; 1992.
40. Arrow KJ, Cline WR, Maler K-G, Munasinghe M, Squitieri R, Stiglitz JE. Intertemporal equity, discounting, and economic efficiency. In: Climate Change 1995: Economic and Social Dimensions of Climate Change. Contribution of Working Group III to the Second Assessment Report of the Intergovernmental Panel on Climate Change; 1996.
41. Portney PR, Weyant JP, eds. Discounting and Intergenerational Equity. Washington, DC: Resources for the Future; 1999.
42. Nordhaus W. Critical assumptions in the stern review on climate change. Science 2007, 317:201-202.
43. Weitzman ML. The stern review of the economics of climate change. J Econ Lit 2007, XLV:703-724.
44. Stern N, Peters S, Bakhshi V, Bowen A, Cameron C, Catovsky S, Crane D, Cruickshank S, Dietz S, Edmondson N, et al. The Economics of Climate Change. Cabinet Office-H. M. Treasury. Cambridge: Cambridge University Press; 2006.
45. Watkiss P, Anthoff D, Downing T, Hepburn C, Hope C, Hunt A, Tol R. The Social Costs of Carbon (SCC) Review-Methodological Approaches for Using SCC Estimates in Policy Assessment. Final Report to U.K. Department for Environment Food and Rural Affairs, 2005. Available at: (Accessed February 25, 2012).
46. Nordhaus WD. Paul Samuelson and global public goods. In: Szenberg M, Ramrattan L, Gottesman AA, eds. Samuelsonian Economics and the Twenty-First Century. New York, NY: Oxford University Press, Inc.; 2006.
47. Holladay JS, Schwartz JA. The Other Side of the Coin: The Economic Benefits of Climate Legislation, Policy Brief No. 4. New York: Institute for Policy Integrity, University School of Law; 2009.
48. Tol RSJ. An analysis of mitigation as a response to climate change. Copenhagen Consensus on Climate. Denmark: Copenhagen Consensus Center, Copenhagen Business School; 2009. Available at: (Accessed February 25, 2012).
49. Tol RSJ. The marginal damage costs of carbon dioxide emissions: an assessment of the uncertainties. Energy Policy 2005, 33:2064-2074.
50. DECC (U.K. Department of Energy and Climate Change). Carbon Appraisal in UK Policy Appraisal: A Brief Guide to The New Carbon Values and Their Use in Economic Appraisal, July 2009. Available at: (Accessed February 7, 2012).
51. Anthoff D, Hepburnd C, Tol RSJ. Equity weighting and the marginal damage costs of climate change. Ecol Econ 2009, 68:836-849.
52. Nordhaus WD, Boyer J. Warming the World. Economic Models of Global Warming. Cambridge, MA: MIT Press; 2000.
53. Dasgupta P. Commentary: The Stern Review's Economics of Climate Change. Nat Inst Econ Rev 2007, 199:4-7.
54. Yohe G, Tol R. The Stern review and the economics of climate change: an editorial essay. Clim Change 2008 89:231-240.
55. U.S. EPA (United States Environmental Protection Agency). Guidelines for Preparing Economic Analyses. EPA 240-R-00-003, 2000.
56. U.S. OMB (United States Office of Management and Budget). Regulatory Analysis. Circular A-4, September 17, 2003.
57. Newell R, Pizer W. Discounting the Benefits of Climate Change Mitigation: How Much Do Uncertain Rates Increase Valuations? Washington, DC: PEW Center on Global Climate Change; 2001.
58. Newell RG, Pizer WA. Discounting the distant future: how much do uncertain rates increase valuations? J Environ Econ Manage 2003, 46:52-71.
59. Weitzman ML. Just keep discounting, but... In: Portney PR, Weyant JP, eds. Discounting and Intergenerational Equity. Washington, DC: Resources for the Future; 1999.
60. Pearce D. The social cost of carbon and its policy implications. Environmental Policy Seminar, Oxford University, October 16, 2002. Also, working paper input to Helm D, Pearce DW, eds., Controlling Global Warming, Special Issue of Oxford Review of Economic Policy; 2003.
61. Cornes R, Sandler T. The Theory of Externalities, Public Goods and Club Goods. Cambridge: Cambridge University Press; 1996.
62. Sandler T. Global Challenges: An Approach to Environmental, Political, and Economic Problems. Cambridge: Cambridge University Press; 1997.
63. Samuelson PA. Diagrammatic exposition of a theory of public expenditure. Rev Econ Stat 1955, 37:350-356.
64. Bagnoli M, Lipman B. Provision of public goods: fully implementing the core through voluntary contributions. Rev Econ Stud 1989, 56:583-601.
65. Isaac RM, Schmidtz D, Walker JM. The assurance problem in a laboratory market. Public Choice 1989, 62:217-236.
66. Bagnoli M, McKee M. Voluntary contributions games: efficient private provision of public goods. Econ Inq 1991, 29:351-366.
67. Rose SK, Clark J, Poe GL, Rondeau D, Schulze WD. The private provision of public goods: test of a provision point mechanism for funding green power programs. Res Energy Econ 2002, 24:131-155.
68. Rondeau D, Poe GL, Schulze WD. VCM or PPM? A comparison of the performance of two voluntary public goods mechanisms. J Public Econ 2005, 89: 1581-1592.