Caltech Center for Science, Society, and Public Policy (CSSPP) Seminar
Abstract: Tackling climate change is costly, but letting greenhouse gas emissions grow unchecked is even more expensive. The social cost of carbon, or "SCC", enables policymakers, companies, and individuals to accurately assess this tradeoff by quantifying the total monetized damages associated with the release of one ton of CO2. The SCC plays a central role in determining the nature and stringency of climate policy across the globe, but governments have been slow to adopt updated scientific evidence. In this talk, I describe how large-scale historical datasets can be combined with modern econometric methods, economic theory, and climate science to construct a new SCC framework. This approach is used to compute SCC estimates derived from geographically granular and probabilistic projections of climate change damages to agricultural output, human health, energy demand, coastal flooding, and labor supply. We show that the SCC depends critically on the degree of expected future emissions mitigation as well as choices regarding how society values tail risks and the distributional impacts of climate change.