January 2002
Government Economic Service Working Paper 140
Estimating the social cost of carbon emissions
Richard Clarkson and Kathryn Deyes
"Estimating the social cost of carbon emissions" is a review of the literature on the social cost of carbon, compiled within DEFRA, the Department for Environment, Food and Rural Affairs.
The main paper focuses on the significant uncertainties surrounding the issue of climate change, both of a scientific and economic nature. These relate to the identification of the physical impacts caused by greenhouse gas emissions, determination of the magnitude of those impacts and their subsequent valuation. The range of values proposed to date in the literature for the damage costs of carbon emissions are presented along with an analysis of their robustness. Areas where future work would prove fruitful have also been identified.
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Media links
Updated guidance on the Shadow Price of Carbon
This paper has been superseded by full revised guidance published by Defra in December 2007, on how to value greenhouse gas emissions in government appraisals. This is for use in all policy and project appraisals across government with significant effects on carbon emissions. The guidance adopts the concept of the Shadow Price of Carbon (SPC) as the basis for incorporating carbon emissions in cost-benefit analysis and impact assessments. This replaces all guidance referring to the Social Cost of Carbon (SCC). This is an update of the interim guidance published in August 2007. This guidance is accompanied by a main background paper on the new SPC. Academic peer review comments and a Government response to these comments will be published in early 2008.
- Updated guidance on the Shadow Price of Carbon (DEFRA website)