New study finds incredibly high carbon pollution costs – especially for the US and India | Dana Nuccitelli

As a wealthy, warm country, the US would benefit from implementing a carbon tax to slow global warming

The social cost of carbon is a measure of the economic damages caused (via climate change) by each ton of carbon pollution that we produce today. It's difficult to estimate because of physical, economic, and ethical uncertainties. For example, it's difficult to predict exactly when various climate tipping points will be triggered, how much their damages will cost, and there's also a question about how much we value the welfare of future generations (which is incorporated in the choice of 'discount rate').

In 2013, the Obama administration set the federal social cost of carbon estimate at $37 per ton of carbon dioxide (up from the previous estimate of $22). That was a conservative estimate - in recent years, research has pegged the value closer to $200 because recent research has shown that global warming slows economic growth, which makes it quite expensive. A majority of economists in a 2015 survey believed the federal estimate was too low, but Republicans have recently been trying to dramatically lower it anyway.

To calculate social cost of carbon, you need to answer four questions in sequence:

1. How would the economy change with no climate change (including GHG emissions)?

The idea was to combine an approach to analyzing the climate effect of a marginal emission of carbon dioxide that Ken Caldeira and I had recently developed, with a climate damages model described in what was then a working paper by Marshall Burke and collaborators. My co-author Massimo Tavoni pointed out that by combining these two tools, we could produce the first comprehensive, country-level estimates of the social cost of carbon.

Our paper out today in Nature Clim. Change calculates the economic impact of a ton of CO2 emissions - ie, the social cost of carbon - for all countries: https://t.co/Mn0s6PMl1u pic.twitter.com/IJHt65h5ut

In the United States, there sometimes seems to be a misconception that investments in climate change mitigation are charitable acts. Because climate change presents a more existential threat to developing countries, the argument is that having historically contributed the most CO₂ to the atmosphere, the US should reduce its emissions in order to reduce the impacts of these past actions on others.

On the other hand, our analysis demonstrates that the idea that the biggest beneficiaries of reductions in carbon dioxide emissions by the US would be other countries is a myth. Our results suggest that based on pure self-interest, the US should be willing to pay around $40/ton to avoid an emission of CO2. What's more, the US is very consistently in the top 3 of country-level social costs of carbon - by this metric one of the biggest losers from climate change.