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The social cost of carbon – or marginal damage caused by an additional ton of carbon dioxide emissions – has been estimated by a U.S. government working group at $21/tCO 2  in 2010. That calculation, however, omits many of the biggest risks associated with climate change, and downplays the impact of current emissions on future generations. Our reanalysis explores the effects of uncertainty about climate sensitivity, the shape of the damage function, and the discount rate. We show that the social cost of carbon is uncertain across a broad range, and could be much higher than $21/tCO 2 . In our case combining high climate sensitivity, high damages, and a low discount rate, the social cost of carbon could be almost $900/tCO 2  in 2010, rising to $1,500/tCO 2  in 2050.

Climate Risks and Carbon Prices: Revising the Social Cost of Carbon