Economic Models and the Real-World Social Costs of Carbon

Economic theory mandates that it is worth reducing CO2 emissions up to the point where the benefits are equal to the cost. The social cost of carbon is an estimate, in dollars, of the economic damages from emitting one additional ton of greenhouse gases into the atmosphere. This metric is inextricably tied to the Neoliberal Economics and used by the UN and most governments to determine the appropriate investment in mitigation. This cost/benefit approach to determining the value of mitigation through reduction of fossil fuels depends on the Discount Rate and accurate measures of costs. The Social Cost of Carbon is a deeply flawed tool that has stymied the progress of governments and the financial industry to address climate change.