Social Cost of Carbon in Federal Rulemaking

3/31/14
Harvard 
Elizabeth Kopits, National Center for Environmental Economics, EPA
Costs include
changes in agricultural production
energy demand
Human health 
Property damage from increase flood risks
Value of ecosystem services

Started estimating costs in 2009, used three assessment models - PAGE, DICE (Nordhaus), FUND.  These link physical impacts to economic damages
NB:  no integration between DOD estimates of climate change harm and EPA estimates

Mitigation scenario was 450 ppm CO2 or 550 ppm CO2e
Discount rate for shorter term are both 3 and 7% but longer estimates range from 2.5 to 3 to 5%
This is a global estimate not a strictly domestic model, with some reference to regional and domestic estimates, with the US gaining about 10% of the global benefit.
Costs by 2020 were originally estimated to range from $7 to $81 per ton of carbon
Latest estimate (2012) with updated impacts is from $12 to $128 (in 2007 dollars)
These estimates do not completely include damages from ocean acidification, sea ice loss, melting permafrost, forest dieback, changed ocean currents
Nor the possible benefits to agriculture from more carbon in the air
So far, catastrophic impacts are not adequately estimated in the economics.