In the NewsBloombergNovember 11, 2020

The 40 Things Biden Should Do First on Climate Change

Climate Impact Lab co-director Michael Greenstone: “The social cost of carbon—the monetary value of the damages due to the release of an additional ton of carbon dioxide (CO₂)—is the most important number you’ve never heard of. Simply put, it calculates the costs of climate change, and therefore the benefits of climate rules that restrict CO₂ emissions, making it central to cost-benefit analyses required for any climate regulations. In 2009 and 2010, when I was the chief economist at the Council of Economic Advisors, I co-led with Cass Sunstein an interagency working group that developed the first U.S. government-wide social cost of carbon. President Trump reversed this progress, disbanding the interagency working group of climate scientists, economists, lawyers, and other experts. Mandated by the courts to have a social cost of carbon in place, his Environmental Protection Agency set it at between $1 and $7 per ton—far lower than the prior estimate of $50 and far removed from the frontier of scientific and economic understanding. A first order of business for the Biden administration should be to charge an inter-agency group with developing a new social cost of carbon that is based on frontier climate economics and science. The administration should also set an interim figure that makes improvements on the Obama Administration estimate by using a discount rate—a translation of future climate damages into their present value—no higher than 2% to reflect the profound changes in global capital markets over the last 15 years. These actions will pave the way for more ambitious regulations that appropriately protect all Americans, especially the most vulnerable, from climate change.”