Debunking the 2023 hike in the Social Cost of Carbon - Highlighted Article

From: Climate Etc.

By: Ross McKitrick

Date: February 21, 2025

Debunking the 2023 hike in the Social Cost of Carbon

I have a new paper out in the journal Nature Scientific Reports in which I re-examine some empirical work regarding agricultural yield changes under CO2-induced climate warming. An influential 2017 study had argued that warming would cause large losses in agricultural outputs on a global scale, and this played a large role in an upward revision to the Biden Administration’s Social Cost of Carbon (SCC) estimate, which drives regulatory decision in US climate rulemaking. I show that a lot of data had been left out of the statistical modeling, and once it is included there was no evidence of yield losses even out to 5 C warming.

Background

In 2023 a team of economists working for the Biden Administration concluded the SCC needed to be increased by a considerable amount. The higher the SCC, the costlier the regulatory burden that can be justified by the agency. This not only affected US regulations but Canada’s as well since our own environment ministry adopted the new US values when justifying a sweeping set of new greenhouse gas regulations. I wrote an op-ed about the SCC change in May 2023 in which I drew attention to the important role played by a revision to projected agricultural yield damages. While it is difficult to trace where, precisely, all the changes came from, I estimate about $50 of an approximately $100 increase in the 2030 value of the SCC (holding the discount rate constant) was attributable to the revised agricultural yield damage estimates. (continue reading)

Debunking the 2023 hike in the Social Cost of Carbon