Social cost of carbon: What it is, why it matters, and why the Biden administration seeks to raise it

The social cost of carbon has been called “the most important number you’ve never heard of.” It is the main measure of the economic benefits of mitigating climate change, an estimate in dollars of the damage done by each additional ton of carbon dioxide emitted. The social cost of carbon is used to weigh the benefits of proposals to tackle climate change (that is, the value of each ton of carbon that is not emitted) versus the costs (of regulation, equipment, transition to renewable fuels, etc.). The U.S. government has been using an interim value of $51 per metric ton of carbon, but last year the Environment Protection Agency proposed increasing that to $190 per metric ton. You might call it “the most important revision you’ve never heard of to the most important number you’ve never heard of.”

To explain why putting a number on the social cost of carbon is so important, the Hutchins Center on Fiscal and Monetary Policy at Brookings is convening a panel, in-person and livestreamed, on Monday, April 3. Participants include Coral Davenport (The New York Times), Noah Kaufman (Columbia), Brian Prest (Resources for the Future), and Glenn Rudebusch (Brookings). Viewers may submit questions by emailing [email protected], on Twitter using the hashtag #Carbon, or at sli.do using the code #Carbon.