1. NS4960 Summer Term 2019 Social Cost of Carbon
Umair Irfan, climate change is a global injustice

2. Overview All efforts to fight climate change face money test
Are the benefits of stopping global warming and avoiding
Sea level rise
Heat waves and
Wildfires
Greater than the costs?
Dollar value should be one of biggest factors in deciding what we are willing to do to tackle the problem

3. Social Cost of Carbon (SCC)
New estimates on how much humanity would save by becoming more sustainable
In 2018 Global Commission on the Economy and Climate came up with $26 trillion savings by 2030
Question – which countries stand to lose the most as climate changes
Idea of the social cost of carbon
A policy tool that attaches a price tag to the long-term economic damage caused by one ton of carbon dioxide – hence the cost to society
Serves as a way to distill vast consequences of climate change down to a practical metric.

4. SCC Use in Policy Making
Critically also the foundation of US climate policies under the Clean Power Plan
Revising number downward has been a key part of Trump administration’s strategy to roll back environmental rules
Under Obama the social cost of carbon was set at $45 per ton
Under Trump it is as little as $1 dollar
New study calculates social cost of carbon down to individual countries
Clear pattern of costing some countries more than others
Finds that the U.S. stands to pay one of the highest prices in the world for its emissions

5. SCC Calculations I
Calculating the social cost of carbon requires coordinating several variables
Need to make assumptions about
Socioeconomic progress and
Changes in the world that are going to happen out a century into the future
Uncertainty as to how climate change is going to look
Social cost of carbon an imperfect measure
Focuses on broad changes in economy rather than abrupt shifts from extreme weather or disasters
Requires making many arguable assumptions
Still a useful tool in estimating costs and benefits of different ways to fight climate change.

6. SCC Calculations II Need to look at
A range of greenhouse gas scenarios
Different economic damage models
Effects of multiple discount rates
Apparently world has been drastically undervaluing the potential economic damages from climate change
Global social cost of carbon is $417 per ton

7. Country Disparity I
Great country disparity in economic consequences of climate change
Countries at northern latitudes like Russia face negative social cost of carbon
Implies warming up will help their economies
Improve agriculture or reduce heating demands in far north
However estimates based on macroeconomic factors within countries do not account for
Declining international trade
Sea level rise
Thawing permafrost causing roads to buckle

8. Country Disparity II

9. Tragedy of Commons Problem
Findings alarming for India
Highest social cost of carbon at $86 a ton
Second is US at $48 a ton
Problem even if every country in world decides to implement a carbon tax at level of social costs to that country – won’t solve climate change
Need to also include the damages to other countries – a “tragedy of the commons” problem
Ton of CO2 contributed equally to climate change regardless where it comes from
Total is grater than the sum of its parts.

10. Problem of Equity I
U.S. almost balance – high social cost of carbon roughly proportional to how much carbon dioxide it emits
India pumps out just 6% of global green house gases and will bare more than 20% of the global economic burden from climate change
Many of the wealthiest countries in world stand to bear lowest costs of climate change
Social costs of carbon show why climate change really has to be tackled as a global problem rather than by individual nations
As long as countries like Russia, UK and Germany face little financial fallout, that policy case becomes much harder to make

11. Problem of Equity