Social Cost Of Carbon Emissions Research Articles

Accounting for Carbon Emissions Among Large U.S. Companies: Does Materiality Matter

This paper investigates carbon emissions materiality with regards to financial statements and investigates potential methods of accounting for carbon emission rights. We investigate whether some of the largest U.S. companies should be required to discuss and quantify greenhouse gas emissions, as defined by the GHG Protocol, in the required 10-K annual report. Our analysis uses a new metric, based on social carbon cost, that suggests social cost of carbon emissions could be material, and supports the need for transparent accounting of the financial impact of carbon emissions in the required 10-K annual report. We searched each company’s 10-K for information on climate change and emissions-related disclosures. We found that while most companies acknowledge climate change as a risk factor, their 10-K narratives do not discuss or explain the impact of emissions on financial performance. Our findings suggest that climate-related factors are not being appropriately captured in current 10-Ks despite increasing calls for greater transparency on climate-related exposure, raising concerns that investors are not receiving the appropriate information necessary to evaluate investments. Providing such information would allow investors to gain a better understanding of company risks, and enhance their ability to make better investment choices.

Economics of Soil Carbon and its Specifics in Ukraine

Anthropogenic emissions are one of the main causes of global warming. Carbon dioxide is the most commonly produced greenhouse gas. Sequestration is one of the options to decrease the amount of atmospheric carbon dioxide. One of the main types of carbon sequestration is the biological carbon sequestration method of soil carbon sequestration. There are various estimates of the SCS potential of soils since the knowledge of soil carbon conservation processes is still limited. However, it is evident that degraded soils have more potential to sequester carbon. The aim of the paper is to analyze the social cost of soil organic carbon in soils of Ukraine, discuss different ways used to estimate the price of soil organic carbon and the carbon sequestration potential of different soils. The social cost of carbon was used to estimate the value of soil organic carbon stocks in Ukraine because it shows the avoided social cost of carbon emissions. The social cost of carbon represents the net present value of the climate change impact of additional carbon released into the atmosphere (marginal global damage costs). Estimation of the social cost of SOC stock in different types of soils in Ukraine makes it possible to compare alternative land use options and to make right policy choices. The results depict the high importance of Ukrainian soils in preventing global climate changes through carbon storage. Czornozem soils are especially rich in SOC, and therefore more valuable in terms of the ecosystem services they provide. The sequestration potential of most types of Ukrainian soils exceeds the sequestration potential of forests. The article proposes measures and practices for soil carbon sequestration and SOC protection. The implementation of the measures to preserve and accumulate SOC will contribute to the increase in biological productivity of agricultural soils and, consequently, boost the yield of cultivated crops, which will have a positive effect on food security

The costs and benefits of fire management for carbon mitigation in Alaska through 2100

Climate change is intensifying fire regimes across boreal regions, and thus both burned area and carbon emissions from combustion are expected to increase significantly over the next several decades. Fire management through initial suppression of fires is effective at reducing burned area, but limited work has addressed the role that fire management can play in reducing wildfire carbon emissions and their impacts on climate change. In this work, we draw on historical data covering fire and fire management in Alaska to project burned area and management outcomes to 2100. We allow management to both respond to and impact variations in annual burned area and carbon emissions, while keeping decadal-average burned area at or above historical levels. The total cost of a fire is calculated as the combination of management expenditures and the social cost of carbon (SCC) emissions during combustion, using the SCC framework. Incorporating the tradeoff between management expenditures and burned area, we project that by 2100, increasing management effort by 5–10 times relative to current expenditures would minimize combined management and emissions costs. This is driven by the finding that the social costs of carbon emissions greatly exceed management costs unless burned area is constrained to near the average historical level. Our analysis does not include the many health, economic, and non-CO2 climate impacts from fires, so we likely underestimate the benefits of increased fire suppression and thus the optimal management level. As fire regimes continue to intensify, our work suggests increased management expenditures will be necessary to counteract increasing carbon combustion and lower overall climate impact.

Sustainable biofuel consumption in air passenger transport driven by carbon-tax policy

Carbon emissions associated with air passenger transport have been in the spotlight for several decades. As most aircraft emission reduction technologies have reached a saturation point, biofuel is considered a sustainable resource for reducing carbon emissions in air passenger transport. In order to promote the sustainable consumption of biofuels in air passenger transport and curb carbon emissions, this study explores a carbon-tax policy, which includes a regular carbon tax and a punitive carbon tax for setting a cap of carbon emissions by the punitive tax based on the expected carbon emissions level, and biofuel consumption strategies by a bi-level programming model. By the planning model, we examine the decision-making interaction between the government and several airlines in order to establish the links between carbon-tax policy and biofuel consumption in air passenger transport, and analyze how carbon-tax policy helps reduce carbon emissions from biofuel consumption. Based on the results, sustainable biofuel consumption and carbon emissions reduction are mainly dependent on expected emission levels, in addition to the relatively low expected emission levels that exceed airlines' capability to reduce emissions. Moreover, the social cost of carbon emissions can be partially transferred with an appropriate proportional coefficient, depending on the carbon-tax policy parameters including the expected emission level and carbon tax prices. The findings of this study suggest that setting appropriate expected emission levels and carbon tax prices can encourage airlines to use biofuels, promote carbon emissions reduction and achieve sustainable air passenger transport. In addition, when implementing sustainable biofuel consumption planning, considering the relationship of government and airlines is conducive to making proper carbon-tax policy.

Indirect cost of renewable energy: Insights from dispatching

The rapidly falling costs of renewable energy has made them the focus of efforts in making a low-carbon transition. However, when cheap large-scale energy storage is not available, the variability of renewables implies that fossil-based technologies have to ramp up-and-down frequently to provide flexibility for matching electricity demand and supply. Here we provide a study on the indirect cost of renewable energy due to thermal efficiency loss of coal plants with such ramping requirements. Using monthly panel data for China, we show that higher renewable share is associated with fewer operating hours of coal-fired units (COHOUR). We use an instrumental variable depending on natural river flows to identify the causal effect of reduced COHOURs in raising the heat rate of coal-fired units. Specifically, a 1 percentage point increase in the share of renewables leads to a 6.4 h reduction per month, and a reduction of one COHOUR results in a 0.09 gce/kWh increase of gross heat rate (+0.03%). We estimate that the thermal efficiency loss indicates 4.77 billion US dollars of indirect cost of renewables in 2019, or 9.44 billion if we include the social cost of carbon emissions. These results indicate that we should consider the indirect impacts of renewables on total coal use and the importance of increasing flexibility of the system.

Using integrated risk assessment to enable on-site re-purposing of construction wastes from renewable energy projects to confirm highest value re-use.

The rapid growth in solar PV construction means a concurrent growth in used solar panels and end of life packaging materials. The current study assesses the risks in an integrated manner, from applying shredded end of life packaging materials (EOLPM) to soil at a utility-scale solar energy (USSE) plant. Its aim and purpose is to determine if the EOLPM would pose a potential risk to human health and/or the environment if placed as a soil amendment incorporated into the surface soil (as a surface-incorporated mulch). An integrated risk assessment, drawing upon existing chemical and phytotoxicity data and introducing carbon emissions impacts (including social cost of carbon emissions) from treatment options, was undertaken confirming effective controls and risk treatments from on-site application as a soil amendment (soil improver). Landfilling (30 t CO2e per MW) was estimated to cost $AUD6.8k per MW, compared to the most appropriate and selected on-site option of mulching (0.5 t CO2 per MW and $UAD7.1k per MW). There is broad application of this approach to other remote USSE construction projects where solar PV construction growth is occurring exponentially globally.

Valuing the impacts of forest disturbances on ecosystem services: An examination of recreation and climate regulation services in U.S. national forests

The increasing frequency and severity of forest disturbances challenge the sustainable provision of ecosystem services by forests, and this is true even in regions with net forest growth. The combination of ecosystem service losses from forest disturbances that are immediate as well as the slower post-disturbance process of forest regrowth could result in long-lasting social, economic, and environmental costs. Using economic and geospatial analysis, we estimate the value of recreational services losses due to drought and quantify the social cost of carbon emissions due to wildfires and bark beetle damage in three National Forests in the Sierra Nevada region, California (Inyo National Forest, Tahoe National Forest, and Lake Tahoe Basin Management Unit). Our findings indicate that recent droughts resulted in an annual reduction of about $73 million, $36 million, and $15 million for Lake Tahoe Basin Management Unit, Tahoe, and Inyo National Forests, respectively. Tree biomass loss due to wildfires and bark beetle damage generated around 10 Mt CO2 of total emissions from 2003 and 2012. The estimated cumulative social costs of such emissions were around $0.8 million for fire and $2.4 million for bark beetle (using a 3% discount rate for related climate change damage). The social costs almost tripled under extreme climate damage projections. Our analysis could inform adaptation and management strategies to conserve or enhance the health and function of publicly managed forests, and to protect their flow of ecosystem services for present and future generations.

Coupling system of carbon emission and social economy: A review

With increasing international attention on the coupling system of carbon emission and social economy, governments need to formulate relevant policies and measures to control carbon dioxide and other greenhouse gas emissions. The social cost of carbon (SCC) can form the basis for such steps. To investigate research on SCC, this paper examines relevant literature in China and abroad for different methods to measure carbon emissions. It further reviews research methods for studying SCC, the effects of model parameters on SCC, and the application of SCC to policymaking. The purpose of researching the measurement of carbon emissions is to select the most appropriate, accurate, and precise methods to enhance data support for research on carbon emissions (including the measurement of social costs). Recording different models facilitates the estimation of SCC for more suitable and exact estimation methods. Analyzing the effects of model parameters on SCC clarifies decision-making and exogenous variables regarding estimating SCC, including the impact of equity weight, uncertainty, risk aversion, and discount and time preference rates on the value of SCC. Therefore, this paper reviews existing research on SCC policy to help frame policymaking appropriately, using the social cost of carbon emissions.

Sustainable Competition Policy

After a general introduction on climate change concerns, this paper discusses market failures involving products and services with an environmental footprint including in particular negative externalities. It argues that a consumer welfare analysis under competition or antitrust policy should take account of these environmental externalities, in all all areas of competition policy, including merger control, and antitrust assessment of horizontal and vertical agreements under Article 101(3) TFEU. The paper concludes that we can no longer afford to turn a blind eye to competition that exploits externalities that hurt the environment and the climate. Nor can we ignore the coordination problems that hamper solutions. Antitrust should be a part of an integrated climate policy, and the social cost of carbon emissions should be taken into account when assessing an agreement or conduct’s impact on consumer welfare.

Uncertainties in Climate and Weather Extremes Increase the Cost of Carbon

Climate change has myriad physical and economic impacts. Even those that can be easily quantified indicate the need for ambitious climate action. Other climate impacts have yet to be quantified. We argue here that uncertainties in climate and weather extremes only further increase the social cost of carbon emissions.

Sustainable competition policy

After a general introduction on climate change concerns, this paper discusses market failures involving products and services with an environmental footprint including in particular negative externalities. It argues that a consumer welfare analysis under competition or antitrust policy should take account of these environmental externalities, in all all areas of competition policy, including merger control, and antitrust assessment of horizontal and vertical agreements under Article 101(3) TFEU. The paper concludes that we can no longer afford to turn a blind eye to competition that exploits externalities that hurt the environment and the climate. Nor can we ignore the coordination problems that hamper solutions. Antitrust should be a part of an integrated climate policy, and the social cost of carbon emissions should be taken into account when assessing an agreement or conduct’s impact on consumer welfare.

Valuation of Total Soil Carbon Stocks in the Contiguous United States Based on the Avoided Social Cost of Carbon Emissions

Total soil carbon (TSC) is a composite (total) stock, which is the sum of soil organic carbon (SOC) and soil inorganic carbon (SIC). Total soil carbon, and its individual two components, are all important criteria for assessing ecosytems services (ES) and for achieving United Nations (UN) Sustainable Development Goals (SDGs). The objective of this study was to assess the value of TSC stocks, based on the concept of the avoided social cost of carbon dioxide emissions, for the contiguous United States (U.S.) by soil order, soil depth (0–20, 20–100, 100–200 cm), land resource region (LRR), state, and region using information from the State Soil Geographic (STATSGO) database. The total calculated monetary value for TSC storage in the contiguous U.S. was between $8.13T (i.e., $8.13 trillion U.S. dollars, where T = trillion = 1012) and $37.5T, with a midpoint value of $21.1T. Soil orders with the highest TSC storage midpoint values were Mollisols ($7.78T) and Aridisols ($2.49T). Based on area, however, the soil orders with highest midpoint TSC values were Histosols ($21.95 m−2) and Vertisols ($5.84 m−2). Soil depth was important, with the highest values of TSC storage being found in the interval 20–100 cm ($9.87T—total midpoint value, and $1.34 m−2—midpoint area density). The soil depth interval 0–20 cm had the lowest TSC storage ($4.30T) and lowest area-density ($0.58 m−2) value, which exemplifies the prominence of TSC in the deeper subsurface layers of soil. The LRRs with the highest midpoint TSC storage values were: M—Central Feed Grains and Livestock Region ($2.82T) and D—Western Range and Irrigated Region ($2.64T), whereas on an area basis the LRRs with the highest values were I—Southwest Plateaus and Plains Range and Cotton Region ($6.90 m−2) and J—Southwestern Prairies Cotton and Forage Region ($6.38 m−2). Among the U.S. states, the highest midpoint TSC storage values were Texas ($4.03T) and Minnesota ($1.29T), while based on area this order was reversed (i.e., Minnesota: $6.16 m−2; Texas: $6.10 m−2). Comprehensive assessment of regulating ES requires TSC, which is an important measure in achieving the UN SDGs. Despite the known shortcomings of soil databases, such as their static nature and the wide ranges of uncertainty reported for various soil properties, they provide the most comprehensive information available at this time for making systematic assessments of ecosystem services at large spatial scales.

Valuation of Soil Organic Carbon Stocks in the Contiguous United States Based on the Avoided Social Cost of Carbon Emissions

Soil organic carbon (SOC) generates several ecosystem services (ES), including a regulating service by sequestering carbon (C) as SOC. This ES can be valued based on the avoided social cost of carbon (SC-CO2) from the long-term damage resulting from emissions of carbon dioxide (CO2). The objective of this study was to assess the value of SOC stocks, based on the avoided SC-CO2 ($42 per metric ton of CO2 in 2007 U.S. dollars), in the contiguous United States (U.S.) by soil order, soil depth (0–20, 20–100, 100–200 cm), land resource region (LRR), state, and region using information from the State Soil Geographic (STATSGO) database. The total calculated monetary value for SOC storage in the contiguous U.S. was between $4.64T (i.e., $4.64 trillion U.S. dollars, where T = trillion = 1012) and $23.1T, with a midpoint value of $12.7T. Soil orders with the highest midpoint SOC storage values were 1): Mollisols ($4.21T), 2) Histosols ($2.31T), and 3) Alfisols ($1.48T). The midpoint values of SOC normalized by area within soil order boundaries were ranked: 1) Histosols ($21.58 m−2), 2) Vertisols ($2.26 m−2), and 3) Mollisols ($2.08 m−2). The soil depth interval with the highest midpoint values of SOC storage and content was 20–100 cm ($6.18T and $0.84 m−2, respectively), while the depth interval 100–200 cm had the lowest midpoint values of SOC storage ($2.88T) and content ($0.39 m−2). The depth trends exemplify the prominence of SOC in the upper portions of soil. The LRRs with the highest midpoint SOC storage values were: 1) M – Central Feed Grains and Livestock Region ($1.8T), 2) T – Atlantic and Gulf Coast Lowland Forest and Crop Region ($1.26T), and 3) K – Northern Lake States Forest and Forage Region ($1.16T). The midpoint values of SOC normalized by area within LRR boundaries were ranked: 1) U – Florida Subtropical Fruit, Truck Crop, and Range Region ($6.10 m−2), 2) T – Atlantic and Gulf Coast Lowland Forest and Crop Region ($5.44 m−2), and 3) K – Northern Lake States Forest and Forage Region ($3.88 m−2). States with the highest midpoint values of SOC storage were: 1) Texas ($1.08T), 2) Minnesota ($834B) (i.e., $834 billion U.S. dollars, where B = billion = 109), and 3) Florida ($742B). Midpoint values of SOC normalized by area within state boundaries were ranked: 1) Florida ($5.44 m−2), 2) Delaware ($4.10 m−2), and 3) Minnesota ($3.99 m−2). Regions with the highest midpoint values of SOC storage were: 1) Midwest ($3.17T), 2) Southeast ($2.44T), and 3) Northern Plains ($2.35T). Midpoint values of SOC normalized by area within region boundaries were ranked: 1) Midwest ($2.73 m−2), 2) Southeast ($2.31 m−2), and 3) East ($1.82 m−2). The reported values and trends demonstrate the need for policies with regards to SOC management, which requires incentives within administrative boundaries but informed by the geographic distribution of SOC.

Determining the Value of Soil Inorganic Carbon Stocks in the Contiguous United States Based on the Avoided Social Cost of Carbon Emissions

Carbon sequestered as soil inorganic carbon (SIC) provides a regulating ecosystem service, which can be assigned a monetary value based on the avoided social cost of carbon (SC-CO2). By definition, the SC-CO2 is a measure, in dollars, of the long-term damage resulting from the emission of a metric ton of carbon dioxide (CO2). Therefore, this dollar figure also represents the value of damages avoided due to an equivalent reduction or sequestration of CO2. The objective of this study was to assess the value of SIC stocks in the contiguous United States (U.S.) by soil order, soil depth (0–20, 20–100, 100–200 cm), land resource region (LRR), state, and region using information from the State Soil Geographic (STATSGO) database together with a reported SC-CO2 of $42 (U.S. dollars). With this approach, the calculated monetary value for total SIC storage in the contiguous U.S. was between $3.48T (i.e., $3.48 trillion U.S. dollars, where T = trillion = 1012) and $14.4T, with a midpoint value of $8.34T. Soil orders with the highest (midpoint) values for SIC storage were: 1) Mollisols ($3.57T), 2) Aridisols ($1.99T), and 3) Alfisols ($841B) (i.e., $841B is 841 billion U.S. dollars, where B = billion = 109). When normalized by land area, the soil orders with the highest (midpoint) values for SIC storage were: 1) Vertisols ($3.57 m−2), 2) Aridisols ($2.45 m−2), and 3) Mollisols ($1.77 m−2). Most of the SIC value was associated with the 100–200 cm depth interval, with a midpoint value of $4T and an area-normalized value of $0.54 m−2. The LRRs with the highest (midpoint) values of SIC storage were: 1) D—Western Range and Irrigated Region ($1.77T), 2) H—Central Great Plains Winter Wheat and Range Region ($1.49T), and 3) M—Central Feed Grains and Livestock Region ($1.02T). When normalized by land area, the LRRs were ranked: 1) I—Southwest Plateaus and Plains Range and Cotton Region ($5.36 m−2), 2) J—Southwestern Prairies Cotton and Forage Region ($4.56 m−2), and 3) H—Central Great Plains Winter Wheat and Range Region ($2.56 m−2). States with the highest (midpoint) values for SIC storage were: 1) Texas ($2.96T), 2) New Mexico ($572B), and 3) Montana ($524B). When normalized by land area, the states were ranked: 1) Texas ($4.47 m−2), 2) Utah ($2.77 m−2), and 3) Minnesota ($2.17 m−2). Lastly, regions with the highest (midpoint) values for SIC storage were: 1) South Central ($3.13T), 2) West ($1.98T), and 3) Northern Plains ($1.62T). When normalized by land area, the regions were ranked: 1) South Central ($2.90 m−2), 2) Midwest ($1.32 m−2), and 3) West ($1.02 m−2). Results from this study demonstrate a new approach for assigning monetary values to SIC stocks at various scales based on their role in providing ecosystem services for climate regulation and carbon sequestration.

Quantifying Global Impacts to Society from the Consumption of Natural Resources during Environmental Remediation Activities

SummaryEnvironmental remediation activities often require the management of large volumes of water and the consumption of significant amounts of local natural resources, including energy and fossil fuels. Traditionally, proposed remedial approaches for a specific cleanup scenario are evaluated by overall project implementation cost, time frame of the cleanup, and effectiveness to meet cleanup goals. A new paradigm shift, referred to as sustainable remediation, has influenced the remediation industry to consider environmental, social, and economic impacts from cleanup activities. An environmental footprint analysis is the most common method to evaluate environmental implications of cleanup approaches. Presently, these footprint tools do not associate the environmental implications with global impacts. In this article, the method has been extended to integrate the social cost of carbon emissions to quantify global impacts. The case study site is a former aircraft parts manufacturing facility that caused chlorinated solvent contamination in soil and groundwater beneath the building. A groundwater pump‐and‐treat system was initially installed, followed by its gradual phase‐out with concurrent phase in of in situ bioremediation. The case study evaluates the monetized societal benefits from quantifying carbon emission impacts of the proposed cleanup approaches and alternative scenarios. Our results suggest that societal impacts based on monetized carbon emissions can be reduced by 27% by optimizing the remediation processes. The sensitivity analysis results elucidate how variation in carbon prices and social discount rates can influence cleanup decisions for remediation projects.

Social cost of carbon emissions in spotlight

Evidence that increasing temperatures harm productivity raises questions about the effects of warming on economic growth.

Estimating the value of carbon sequestration ecosystem services in the Mediterranean Sea: An ecological economics approach

Ocean and marine ecosystems provide a range of valuable services to humans, including benefits such as carbon sequestration, whose economic value are as yet poorly understood. This paper presents a novel contribution to the valuation of carbon sequestration services in marine ecosystems with an application to the Mediterranean Sea. We combine a state-of-the-art biogeochemical model with various estimates of the social cost of carbon emissions to provide a spatially explicit characterization of the current flow of values that are attributable to the various sequestration processes, including the biological component. Using conservative estimates of the social cost of carbon, we evaluate the carbon sequestration value flows over the entire basin to range between 127 and 1722 million €/year. Values per unit area range from −135 to 1000 €/km2 year, with the exclusive economic zone of some countries acting as net carbon sources. Whereas the contribution of physical processes can be either positive or negative, also depending on the properties of incoming Atlantic water, the contribution of biological processes to the marine “blue carbon” sequestration is always positive, and found to range between 100 to 1500 million €/year for the whole basin.

Smoking Out Red Herrings: The Cost of Living Debate

Smoking Out Red Herrings: The Cost of Living Debate

Climate Regulation and the Limits of Cost-Benefit Analysis

Over the past two years U.S. regulatory agencies have issued fourteen regulations that take into account the effect of industrial activities and products on the global climate. The regulatory activity so far has already set precedents on which future regulation will rest. Yet despite the potentially momentous consequences, it has received no comment in the law review literature. This Article examines the record of these agencies and criticizes the methods they have used to calculate the social cost of carbon emissions. We also develop a larger theme about the relationship between cost-benefit analysis and politics. The best case for cost-benefit analysis is that its recommendations are politically neutral in the sense of drawing on widely shared intuitions about human well-being. But cost-benefit analysis cannot cope with inherently political questions involving contested normative issues. Policymakers will have to find alternative tools when those questions predominate.

The social cost of carbon emissions: Seven propositions

Determining the social cost of carbon emissions (SCC) is a crucial step in the economic analysis of climate change policy as the US government’s recent decision to use a range of estimates of the SCC centered at $77/tC (or, equivalently, $21/tCO2) in cost-benefit analyses of proposed emission-control legislation underlines. This note reviews the welfare economics theory fundamental to the estimation of the SCC in both static and intertemporal contexts, examining the effects of assumptions about the typical agent’s pure rate of time preference and elasticity of marginal felicity of consumption, production and mitigation technology, and the magnitude of climate-change damage on estimates of the SCC. We highlight three key conclusions: (i) an estimate of the SCC is conditional on a specific policy scenario, the details of which must be made explicit for the estimate to be meaningful; (ii) the social discount rate relevant to intertemporal allocation decisions also depends on the policy scenario; and (iii) the SCC is uniquely defined only for policy scenarios that lead to an efficient growth path because marginal costs and benefits of emission–mitigation diverge on inefficient growth paths. We illustrate these analytical conclusions with simulations of a growth model calibrated to the world economy.