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Policy Integrity Research Shapes New Federal Climate Damage Estimates

In November 2022, the Environmental Protection Agency (EPA) announced the release of draft updated values for the social cost of greenhouse gas metrics. The agency cited numerous publications from the Institute for Policy Integrity to support key decisions in the update.

These metrics, which quantify the expected economic damages caused by greenhouse gas emissions, are used to evaluate the costs and benefits of climate-related regulations and other policy decisions. The social cost of carbon’s central value was updated from $51-per-ton to $190-per-ton (for emissions in 2020), consistent with similar trends in the economics literature.

The Institute for Policy Integrity’s scholarship and analysis of these issues was cited dozens of times in the updated federal documentation. EPA calculated damages based on averaging three damage functions, one of which was based on a paper by Peter Howard and Thomas Sterner. In setting the scope of damages to examine, the agency also adopted Policy Integrity's argument for the need to consider global damages. EPA similarly relied on our arguments about the need to use lower discount rates when assessing the value of future damages.

This update to the metrics is the first in nearly a decade, and it will help policymakers more accurately consider climate impacts in a variety of important policy decisions.