Trends and Biases in the Social Cost of Carbon

Richard Tol provides an updated meta-analysis of the social cost of carbon (SCC), a central statistic used to justify climate policies by measuring the benefit of reducing CO2 emissions. The study explores how various ethical assumptions and model parameters, such as the pure rate of time preference, influence the final estimates. Tol notes that the literature is dominated by a relatively small, concentrated network of authors from a few specific countries. This concentration may introduce publication and citation biases that have historically pushed SCC estimates upward. The paper aims to refine the meta-database to provide a more accurate characterization of uncertainty in these economic projections.

The meta-analysis confirms that while SCC estimates have trended upward over time, they are characterized by a large and right-skewed uncertainty. This "thick tail" in the distribution means there is a non-negligible possibility of extremely high costs. Interestingly, the study finds that the social cost is much higher when climate change is assumed to affect economic growth rates rather than just the levels of output and welfare. Tol argues that while the total impact of a 2.5 °C warming is a factor, it is less influential than the underlying ethical views and discount rates chosen by researchers. The findings suggest a need for more diverse perspectives in the production of these influential climate-economy figures.

The central estimate of the social cost of carbon identified in this updated meta-analysis is approximately $200–250 per ton of carbon. When converted to carbon dioxide, this range equates to $700–900 per tCO2. The study specifically looks at the economic impact of a 2.5 °C warming as a benchmark for comparison. Furthermore, Tol examines the influence of citation networks, noting that the field's focus on a "small network of authors" can lead to biases that have pushed the social cost up beyond what a broader literature might suggest. These values provide a stark contrast to the lower estimates often used in older government policy assessments.

Tol, Richard S. J. "Trends and Biases in the Social Cost of Carbon." *Annals of the New York Academy of Sciences* (2025). https://doi.org/10.1111/nyas.15340