The social cost of carbon dioxide (SC-CO2) is a crucial metric used by governments and decision-makers to evaluate the economic damages caused by an additional metric tonne of CO2 emissions. Informed by a range of disciplines such as climate science, economics, and demography, it plays a pivotal role in shaping climate policies around the globe. However, a 2017 report by the US National Academies of Sciences, Engineering, and Medicine (NASEM) revealed that current SC-CO2 estimates no longer accurately reflect the latest research, signaling the need for a comprehensive update.

Researchers have recently proposed a series of improvements, including updated probabilistic socioeconomic projections, climate models, damage functions, and discounting methods that offer a theoretically consistent valuation of risk. Incorporating these advances, the study found that the mean SC-CO2 estimate rises to $185 per tonne of CO2 – a staggering 3.6 times higher than the US government’s current value of $51 per tonne. This significant increase implies that the benefits of greenhouse gas mitigation are substantially greater than previously thought, leading to enhanced net benefits for more rigorous climate policies.

To address the near-term NASEM recommendations and ensure the accurate estimation of SC-CO2, the study introduces the Greenhouse Gas Impact Value Estimator (GIVE) model. This open-source tool incorporates updated scientific understanding across all components of SC-CO2 estimation, providing a reliable foundation for informing global climate policies.

On a global scale, the study’s findings underscore the importance of reevaluating and strengthening climate policies to align with the updated SC-CO2 estimates. As higher values point towards more significant benefits from greenhouse gas mitigation, governments and international organizations must adopt and implement more ambitious climate policies to maximize net benefits for society.

Key recommendations emerging from the study include:

  1. Continuously updating SC-CO2 estimates based on the latest research to accurately assess the benefits and costs of climate policies worldwide.
  2. Encouraging the global adoption of the Greenhouse Gas Impact Value Estimator (GIVE) model to ensure accurate and up-to-date SC-CO2 estimations.
  3. Recognizing the implications of higher SC-CO2 values on the urgency and scale of greenhouse gas mitigation efforts.
  4. Implementing more stringent climate policies that reflect the updated SC-CO2 estimates to achieve increased net benefits for society.
  5. Facilitating international collaboration to improve the methodologies and scientific basis of SC-CO2 estimates and promote informed climate policy decision-making.

In conclusion, updating the SC-CO2 metric and incorporating the latest research is essential for accurately assessing the benefits and costs of climate policies. With higher SC-CO2 values emphasizing the urgency of more stringent climate policies, governments and international organizations must work together to implement ambitious strategies that yield greater net benefits for the global community.

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