Many estimates of the social cost of CO 2 emissions (SCCO 2) can be found in the climate economics literature. However, to date far fewer estimates of the social costs of other greenhouse gases have been published, and many of those that are available are not directly comparable to current estimates of the SCCO 2. In this paper we use a simplified integrated assessment model that combines MAGICC and (elements of) DICE to estimate the social costs of the three most important greenhouse gases-CO 2 , CH 4 , and N 2 O-for the years 2010 through 2050. Insofar as possible, we base our model runs on the assumptions and input parameters of the recent U.S. government inter-agency SCC working group. We compare our estimates of the social costs of CH 4 and N 2 O emissions to those that would be produced by using the SCCO 2 to value the "CO 2-equivalents" of each of these gases, as calculated using their global warming potentials (GWPs). We examine the estimation error induced by valuing non-CO 2 greenhouse gas emission reductions using GWPs and the SCCO 2 for single-and multi-gas abatement policies. In both cases the error can be large, so estimates of the social costs of these gases, rather than proxies based on GWPs, should be used whenever possible. However, if estimates of the social cost are not available the value of non-CO 2 GHG reductions estimated using GWPs and the SCCO 2 will typically have lower absolute errors than default estimates of zero.
Benefit-cost analysis can serve as an informative input into the policy-making process, but only to the degree it characterizes the major impacts of the regulation under consideration. Recently, the US, amongst other nations, has begun to use estimates of the social cost of CO 2 (SC-CO 2 ) to develop analyses that more fully capture the climate change impacts of GHG abatement. The SC-CO 2 represents the aggregate willingness to pay to avoid the damages associated with an additional tonne of CO 2 emissions. In comparison, the social costs of non-CO 2 GHGs have received little attention from researchers and policy analysts, despite their non-negligible climate impact. This article addresses this issue by developing a set of social cost estimates for two highly prevalent non-CO 2 GHGs, methane and nitrous oxide. By extending existing integrated assessment models, it is possible to develop a set of social cost estimates for these gases that are consistent with the SC-CO 2 estimates currently in use by the US federal government. Policy relevanceWithin the benefit-cost analyses that inform the design of major regulations, all Federal agencies within the US Government (USG) use a set of agreed upon SC-CO 2 estimates to value the impact of CO 2 emissions changes. However, the value of changes in non-CO 2 GHG emissions has not been included in USG policy analysis to date. This article addresses that omission by developing a set of social cost estimates for two highly prevalent non-CO 2 GHGs, methane and nitrous oxide. These new estimates are designed to be compatible with the USG SC-CO 2 estimates currently in use and may therefore be directly applied to value emissions changes for these non-CO 2 gases within the benefit-cost analyses used to evaluate future policies.
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in S. Environmental Protection Agency, WashingtonAbstract Integrated Assessment Models (IAMs) couple representations of the natural climate system with models of the global economy to capture interactions that are important for the evaluation of potential climate and energy policies. The U.S. federal government currently uses such models to derive the benefits of carbon mitigation policies through estimates of the social cost of carbon (SCC). To remain tractable these models often utilize highly simplified representations of complex natural, social, and economic systems. This makes IAMs susceptible to oversimplification by failing to capture key features of the underlying system that are important for policy analysis. In this paper we focus on one area in which these models appear to have fallen into such a trap. We consider three prominent IAMs, DICE, FUND, and PAGE, and examine the way in which these models represent the transient temperature response to increases in radiative forcing. We compare the highly simplified temperature response models in these IAMs to two upwelling diffusion energy balance models that better reflect the progressive uptake of heat by the deep ocean. We find that all three IAMs are unable to fully capture important characteristics in the temporal dynamics of temperature response, especially in the case of high equilibrium climate sensitivity. This has serious implications given that these models are often run with distributions for the equilibrium climate sensitivity that contain a positive probability for such states of the world. We find that all else equal the temperature response function utilized in the FUND model results in estimates of the expected SCC that are up to 25% lower than those derived with the more realistic climate models, while the functions used in DICE and PAGE lead to expected SCC estimates up to 40% and 50% higher, respectively.
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