In December 2023, EPA finalized updated values for the social cost of greenhouse gases (SC-GHG), following public comment and expert peer review. The agency derived these estimates using the best available science and economics, and the estimates represent a significant step forward in our ability to properly value climate effects. The brief is intended to introduce policymakers and practitioners to the SC-GHG, break down EPA's updated values, and explain why they represent a powerful tool that can streamline decisionmaking and policy analysis.
Simply put, the SC-GHG is a monetary estimate of the damage done by each ton of greenhouse gases that is released into the air. It contains separate “social cost” values for several of the most common greenhouse gases, including: carbon dioxide, methane, and nitrous oxide. There are several advantages to using the SC-GHG in policy analysis. First, it captures many different climate impacts in a single metric. Second, the unit of that metric—dollars—facilitates simple comparison to other monetized effects, such as a policy’s compliance cost. Third, the SC-GHG allows analysts to sum the effects of pollution emitted over multiple years into a single number, which is important because different greenhouse gases cause different damages depending on their year of emission. Fourth, the metric provides policymakers aiming to price greenhouse gases emissions (through fees or royalties, in procurement, or elsewhere) with a specific and scientific price. For these reasons, many decisionmakers—including policymakers in the federal government, numerous U.S. states, and some foreign nations—have long used the SC-GHG to craft smarter energy and climate policies.
As of now, EPA's updated values are the most robust, scientifically-supported, and comprehensive climate-damage estimates currently available, and decisionmakers applying the SC-GHG should use EPA’s Values.