Omitted Damages: What’s Missing from the Social Cost of Carbon. Howard, P. H. March, 2014.
Omitted Damages: What’s Missing from the Social Cost of Carbon [pdf]Paper  abstract   bibtex   
The 2013 Interagency Working Group on the Social Cost of Carbon (IWG) updated the U.S. social cost of carbon (SCC) for 2015 from a central value of \$24 to \$37 using three integrated assessment models (IAMs): DICE-2010, FUND 3.8, and PAGE09. The SCC is the additional economic damage caused by one ton of carbon dioxide. While some have questioned the increase in the SCC as too high, a thorough examination of the latest scientifi c and economic research shows that \$37 should be viewed as a lower bound. This is because the studies available to estimate the SCC omit many climate impacts—eff ectively valuing them at zero. Where estimates are available for a given type of impact, they tend to include only a portion of potential harms. This paper represents the first attempt to systematically examine and document these omissions for the latest versions of the three IAMs used by the IWG, as well as earlier versions when they are used in calibrating the updated models. The table on the following page summarizes hot spot damages including increases in forced migration, social and political confl ict, and violence; weather variability and extreme weather events; and declining growth rates. A better accounting of catastrophic damages is also needed, as well as many other impacts. While there is a downward bias to the U.S. SCC estimates due to these omissions, the Offi ce of Management and Budget (OMB) and other executive branch agencies should move forward to finalize proposed rules with the 2013 IWG’s current SCC estimates, as measuring at least some of the costs of carbon dioxide is better than assuming they are zero. At the same time, the OMB should more thoroughly document downward biases of the current U.S. SCC estimates, potentially using this report to list in detail all of the currently omitted damages.

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