How Biden Is Putting a Number on Carbon’s True Cost
The “social cost of carbon,” or SCC, was created to show policy makers the gap between the market price of fossil fuels and the cost of the environmental damage they cause.
It’s a number with a name its inventors concede is baffling. But it may also be, as many in the field have called it, the most important number you’ve never heard of. The “social cost of carbon,” or SCC, was created to show policy makers the gap between the market price of fossil fuels and the cost of the environmental damage they cause. The Trump administration all but ignored climate accounting in its regulations, but President Joe Biden has ordered his staff to move promptly to calculate new social cost estimates for CO₂, plus nitrous oxide and methane.
It’s a tool used in federal benefit-cost analysis to account for the damage greenhouse gas pollution inflicts on society, whether it comes in the form of deadly heat waves, water shortages or disappearing crops or animals. One of its champions, Michael Greenstone, says it can also be regarded as “the benefit, in money terms, of reducing carbon emissions.” Those benefits can justify regulations that make polluting activities more expensive. To distinguish among the effects of the greenhouse gases, the SCC in recent years has fractured into separate “social costs” of CO₂, methane and nitrous oxide.