The Berkeley Rausser College of Natural Resources held a discussion Wednesday on the social cost of carbon as part of the Breakthroughs Magazine Virtual Series.
Campus professor Maximilian Auffhammer moderated the series’s inaugural discussion, which also featured campus professor David Anthoff and campus doctoral candidate Lisa Rennels. The speakers answered questions related to the Breakthroughs Magazine article on the social cost of carbon.
Auffhammer began the event by asking panelists to elaborate on the social cost of carbon, which Anthoff described as an economic estimate of the harm done by emitting one extra ton of carbon dioxide into the atmosphere.
“From the moment you put the carbon dioxide into the atmosphere, for many centuries, the temperature will be a little bit higher,” Anthoff said at the event. “We try to quantify all the changes that affect human well-being, and we try to put dollar signs onto that. Once we have estimates of the dollar signs, over all the places and all the years, we add it all up and that’s the social cost of carbon.”
According to Rennels, the social cost of carbon is prevalent in the academic world of climate economics.
The estimate is also used often in cost-benefit analysis when trying to judge the usefulness of a policy, Anthoff noted.
“From a policy perspective, we are seeing a lot of incorporations of the social cost of carbon into the evaluation of policies and decision-making,” Rennels said at the event. “We’ve seen this used in several states, including California.”
Auffhammer then asked panelists about how equity factors into calculating the social cost of carbon.
While equity is not a factor in the standard framework for a cost-benefit analysis, equity weighting tries to account for how the impact of carbon differs across economic situations, according to Anthoff.
“The idea is that before we add everything together, before we add all the harms, we apply weights to account for the wealth situation for the person who is actually affected,” Anthoff said at the event.
The speakers were then asked about the models used to estimate the social cost of carbon, and they elaborated on Mimi, the software package they helped create to improve those models.
According to Rennels, the platform would let multiple models run simultaneously, helping policymakers understand the uncertainties around which of the models are correct.
As an open-source model, anyone is able to build on the Mimi platform, according to Anthoff.
“Where the quality control comes in is where we write papers that we publish in peer-reviewed journals, then we pick and choose what components we want to use,” Anthoff said at the event. “We provide a platform where everyone can go crazy, and my hope is that people will build things that we didn’t think of.”