Paper Number: 2011-01

Document Date: 01/2011

Author(s): Alex L. Marten and Stephen C. Newbold

Subject Area(s): Climate Change; Economic Impacts

JEL Classification: Environmental Economics: Climate; Natural Disasters and Their Management; Global Warming; Government Policy

Keywords: social cost of carbon; global warming potential; integrated assessment

Abstract: Many estimates of the social cost of CO2 emissions (SCCO2) can be found in the climate economics literature. However, to date far fewer estimates of the social costs of other greenhouse gases have been published, and many of those that are available are not directly comparable to current estimates of the SCCO2. In this paper we use a simplified integrated assessment model that combines MAGICC and (elements of) DICE to estimate the social costs of the three most important greenhouse gases—CO2, CH4, and N2O—for the years 2010 through 2050. Insofar as possible, we base our model runs on the assumptions and input parameters of the recent U.S. government inter-agency SCC working group. We compare our estimates of the social costs of CH4 and N2O emissions to those that would be produced by using the SCCO2 to value the "CO2-equivalents" of each of these gases, as calculated using their global warming potentials (GWPs). We examine the estimation error induced by valuing non-CO2 greenhouse gas emission reductions using GWPs and the SCCO2 for single-and multi-gas abatement policies. In both cases the error can be large, so estimates of the social costs of these gases, rather than proxies based on GWPs, should be used whenever possible. However, if estimates of the social cost are not available the value of non-CO2 GHG reductions estimated using GWPs and the SCCO2 will typically have lower absolute errors than default estimates of zero.

This paper is part of the Environmental Economics Working Paper Series.

• Estimating the Social Cost of Non-CO2 GHG Emissions: Methane and Nitrous Oxide (PDF)(33 pp, 609 K, 01/2011)