1

Technical Support Document: -

Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis -

Under Executive Order 12866 -

Interagency Working Group on Social Cost of Carbon, United States Government

With participation by

Council of Economic Advisers

Council on Environmental Quality

Department of Agriculture

Department of Commerce

Department of Energy

Department of Transportation

Domestic Policy Council

Environmental Protection Agency

National Economic Council

Office of Management and Budget

Office of Science and Technology Policy

Department of the Treasury

May 2013

Revised November 2013

See Appendix B for Details on Revision
2

Executive Summary 

Under Executive Order 12866, agencies are required, to the extent permitted by law, “to assess both 

the costs and the benefits of the intended regulation and, recognizing that some costs and benefits are 

difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the 

benefits of the intended regulation justify its costs.” The purpose of the “social cost of carbon” (SCC) 

estimates presented here is to allow agencies to incorporate the social benefits of reducing carbon 

dioxide (CO2) emissions into cost-benefit analyses of regulatory actions that impact cumulative global 

emissions. The SCC is an estimate of the monetized damages associated with an incremental increase in 

carbon emissions in a given year. It is intended to include (but is not limited to) changes in net 

agricultural productivity, human health, property damages from increased flood risk, and the value of 

ecosystem services due to climate change.

The interagency process that developed the original U.S. government’s SCC estimates is described in the 

2010 interagency technical support document (TSD) (Interagency Working Group on Social Cost of 

Carbon 2010). Through that process the interagency group selected four SCC values for use in 

regulatory analyses. Three values are based on the average SCC from three integrated assessment 

models (IAMs), at discount rates of 2.5, 3, and 5 percent. The fourth value, which represents the 95th 

percentile SCC estimate across all three models at a 3 percent discount rate, is included to represent 

higher-than-expected impacts from temperature change further out in the tails of the SCC distribution.

While acknowledging the continued limitations of the approach taken by the interagency group in 2010, 

this document provides an update of the SCC estimates based on new versions of each IAM (DICE, PAGE, 

and FUND). It does not revisit other interagency modeling decisions (e.g., with regard to the discount 

rate, reference case socioeconomic and emission scenarios, or equilibrium climate sensitivity). 

Improvements in the way damages are modeled are confined to those that have been incorporated into 

the latest versions of the models by the developers themselves in the peer-reviewed literature. 

The SCC estimates using the updated versions of the models are higher than those reported in the 2010 

TSD. By way of comparison, the four 2020 SCC estimates reported in the 2010 TSD were $7, $26, $42 

and $81 (2007$). The corresponding four updated SCC estimates for 2020 are $12, $43, $64, and $128

(2007$). The model updates that are relevant to the SCC estimates include: an explicit representation of 

sea level rise damages in the DICE and PAGE models; updated adaptation assumptions, revisions to

ensure damages are constrained by GDP, updated regional scaling of damages, and a revised treatment

of potentially abrupt shifts in climate damages in the PAGE model; an updated carbon cycle in the DICE

model; and updated damage functions for sea level rise impacts, the agricultural sector, and reduced 

space heating requirements, as well as changes to the transient response of temperature to the buildup 

of GHG concentrations and the inclusion of indirect effects of methane emissions in the FUND model. 

The SCC estimates vary by year, and the following table summarizes the revised SCC estimates from 

2010 through 2050.
3

Revised Social Cost of CO2, 2010 – 2050 (in 2007 dollars per metric ton of CO2)

Discount Rate 5.0% 3.0% 2.5% 3.0%

Year Avg Avg Avg 95th

2010 11 32 51 89

2015 11 37 57 109

2020 12 43 64 128

2025 14 47 69 143

2030 16 52 75 159

2035 19 56 80 175

2040 21 61 86 191

2045 24 66 92 206

2050 26 71 97 220
4

I. Purpose 

The purpose of this document is to update the schedule of social cost of carbon (SCC) estimates from 

the 2010 interagency technical support document (TSD) (Interagency Working Group on Social Cost of 

Carbon 2010).

1

E.O. 13563 commits the Administration to regulatory decision making “based on the best 

available science.”

2

 Additionally, the interagency group recommended in 2010 that the SCC estimates 

be revisited on a regular basis or as model updates that reflect the growing body of scientific and 

economic knowledge become available.

3

 New versions of the three integrated assessment models used 

by the U.S. government to estimate the SCC (DICE, FUND, and PAGE), are now available and have been 

published in the peer reviewed literature. While acknowledging the continued limitations of the 

approach taken by the interagency group in 2010 (documented in the original 2010 TSD), this document

provides an update of the SCC estimates based on the latest peer-reviewed version of the models, 

replacing model versions that were developed up to ten years ago in a rapidly evolving field. It does not 

revisit other assumptions with regard to the discount rate, reference case socioeconomic and emission 

scenarios, or equilibrium climate sensitivity. Improvements in the way damages are modeled are 

confined to those that have been incorporated into the latest versions of the models by the developers 

themselves in the peer-reviewed literature. The agencies participating in the interagency working group

continue to investigate potential improvements to the way in which economic damages associated with 

changes in CO2 emissions are quantified. 

Section II summarizes the major updates relevant to SCC estimation that are contained in the new 

versions of the integrated assessment models released since the 2010 interagency report. Section III

presents the updated schedule of SCC estimates for 2010 – 2050 based on these versions of the models. 

Section IV provides a discussion of other model limitations and research gaps.

II. Summary of Model Updates

This section briefly summarizes changes to the most recent versions of the three integrated assessment 

models (IAMs) used by the interagency group in 2010. We focus on describing those model updates that 

are relevant to estimating the social cost of carbon, as summarized in Table 1. For example, both the 

DICE and PAGE models now include an explicit representation of sea level rise damages. Other revisions 

to PAGE include: updated adaptation assumptions, revisions to ensure damages are constrained by GDP,

updated regional scaling of damages, and a revised treatment of potentially abrupt shifts in climate 

damages. The DICE model’s simple carbon cycle has been updated to be more consistent with a more 

complex climate model. The FUND model includes updated damage functions for sea level rise impacts, 

the agricultural sector, and reduced space heating requirements, as well as changes to the transient 

response of temperature to the buildup of GHG concentrations and the inclusion of indirect effects of 

 

1

 In this document, we present all values of the SCC as the cost per metric ton of CO2 emissions. Alternatively, one 

could report the SCC as the cost per metric ton of carbon emissions. The multiplier for translating between mass of 

CO2 and the mass of carbon is 3.67 (the molecular weight of CO2 divided by the molecular weight of carbon = 

44/12 = 3.67).

2 http://www.whitehouse.gov/sites/default/files/omb/inforeg/eo12866/eo13563_01182011.pdf

3

See p. 1, 3, 4, 29, and 33 (Interagency Working Group on Social Cost of Carbon 2010).
5

methane emissions. Changes made to parts of the models that are superseded by the interagency 

working group’s modeling assumptions – regarding equilibrium climate sensitivity, discounting, and 

socioeconomic variables – are not discussed here but can be found in the references provided in each 

section below.

Table 1: Summary of Key Model Revisions Relevant to the Interagency SCC

IAM Version used in 

2010 Interagency 

Analysis 

New 

Version 

Key changes relevant to interagency SCC 

DICE 2007 2010 Updated calibration of the carbon cycle model and 

explicit representation of sea level rise (SLR) and 

associated damages. 

FUND 3.5 

(2009) 

3.8 

(2012) 

Updated damage functions for space heating, SLR, 

agricultural impacts, changes to transient response of 

temperature to buildup of GHG concentrations, and

inclusion of indirect climate effects of methane. 

PAGE 2002 2009 Explicit representation of SLR damages, revisions to 

damage function to ensure damages do not exceed 

100% of GDP, change in regional scaling of damages, 

revised treatment of potential abrupt damages, and 

updated adaptation assumptions. 

A. DICE

DICE 2010 includes a number of changes over the previous 2007 version used in the 2010 interagency 

report. The model changes that are relevant for the SCC estimates developed by the interagency 

working group include: 1) updated parameter values for the carbon cycle model, 2) an explicit 

representation of sea level dynamics, and 3) a re-calibrated damage function that includes an explicit 

representation of economic damages from sea level rise. Changes were also made to other parts of the 

DICE model—including the equilibrium climate sensitivity parameter, the rate of change of total factor 

productivity, and the elasticity of the marginal utility of consumption—but these components of DICE 

are superseded by the interagency working group’s assumptions and so will not be discussed here. More 

details on DICE2007 can be found in Nordhaus (2008) and on DICE2010 in Nordhaus (2010). The 

DICE2010 model and documentation is also available for download from the homepage of William 

Nordhaus.

Carbon Cycle Parameters

DICE uses a three-box model of carbon stocks and flows to represent the accumulation and transfer of 

carbon among the atmosphere, the shallow ocean and terrestrial biosphere, and the deep ocean. These 

parameters are “calibrated to match the carbon cycle in the Model for the Assessment of Greenhouse 
6

Gas Induced Climate Change (MAGICC)” (Nordhaus 2008 p 44).

4 Carbon cycle transfer coefficient values 

in DICE2010 are based on re-calibration of the model to match the newer 2009 version of MAGICC 

(Nordhaus 2010 p 2). For example, in DICE2010, in each decade, 12 percent of the carbon in the 

atmosphere is transferred to the shallow ocean, 4.7 percent of the carbon in the shallow ocean is 

transferred to the atmosphere, 94.8 percent remains in the shallow ocean, and 0.5 percent is 

transferred to the deep ocean. For comparison, in DICE 2007, 18.9 percent of the carbon in the 

atmosphere is transferred to the shallow ocean each decade, 9.7 percent of the carbon in the shallow 

ocean is transferred to the atmosphere, 85.3 percent remains in the shallow ocean, and 5 percent is 

transferred to the deep ocean.

The implication of these changes for DICE2010 is in general a weakening of the ocean as a carbon sink 

and therefore a higher concentration of carbon in the atmosphere than in DICE2007, for a given path of 

emissions. All else equal, these changes will generally increase the level of warming and therefore the 

SCC estimates in DICE2010 relative to those from DICE2007.

Sea Level Dynamics

A new feature of DICE2010 is an explicit representation of the dynamics of the global average sea level 

anomaly to be used in the updated damage function (discussed below). This section contains a brief 

description of the sea level rise (SLR) module; a more detailed description can be found on the model 

developer’s website.5 The average global sea level anomaly is modeled as the sum of four terms that 

represent contributions from: 1) thermal expansion of the oceans, 2) melting of glaciers and small ice 

caps, 3) melting of the Greenland ice sheet, and 4) melting of the Antarctic ice sheet. 

The parameters of the four components of the SLR module are calibrated to match consensus results 

from the IPCC’s Fourth Assessment Report (AR4).

6

The rise in sea level from thermal expansion in each 

time period (decade) is 2 percent of the difference between the sea level in the previous period and the 

long run equilibrium sea level, which is 0.5 meters per degree Celsius (°C) above the average global 

temperature in 1900. The rise in sea level from the melting of glaciers and small ice caps occurs at a rate 

of 0.008 meters per decade per °C above the average global temperature in 1900. 

The contribution to sea level rise from melting of the Greenland ice sheet is more complex. The 

equilibrium contribution to SLR is 0 meters for temperature anomalies less than 1 oC and increases 

linearly from 0 meters to a maximum of 7.3 meters for temperature anomalies between 1 oC and 3.5 °C. 

The contribution to SLR in each period is proportional to the difference between the previous period’s 

sea level anomaly and the equilibrium sea level anomaly, where the constant of proportionality 

increases with the temperature anomaly in the current period.

 

4 MAGICC is a simple climate model initially developed by the U.S. National Center for Atmospheric Research that 

has been used heavily by the Intergovernmental Panel on Climate Change (IPCC) to emulate projections from more 

sophisticated state of the art earth system simulation models (Randall et al. 2007).

5 Documentation on the new sea level rise module of DICE is available on William Nordhaus’ website at: 

http://nordhaus.econ.yale.edu/documents/SLR_021910.pdf.

6

For a review of post-IPCC AR4 research on sea level rise, see Nicholls et al. (2011) and NAS (2011). 
7

The contribution to SLR from the melting of the Antarctic ice sheet is -0.001 meters per decade when 

the temperature anomaly is below 3 °C and increases linearly between 3 °C and 6 °C to a maximum rate 

of 0.025 meters per decade at a temperature anomaly of 6 °C.

Re-calibrated Damage Function

Economic damages from climate change in the DICE model are represented by a fractional loss of gross 

economic output in each period. A portion of the remaining economic output in each period (net of 

climate change damages) is consumed and the remainder is invested in the physical capital stock to 

support future economic production, so each period’s climate damages will reduce consumption in that 

period and in all future periods due to the lost investment. The fraction of output in each period that is 

lost due to climate change impacts is represented as one minus a fraction, which is one divided by a 

quadratic function of the temperature anomaly, producing a sigmoid (“S”-shaped) function.

7

The loss 

function in DICE2010 has been expanded by adding a quadratic function of SLR to the quadratic function 

of temperature. In DICE2010 the temperature anomaly coefficients have been recalibrated to avoid 

double-counting damages from sea level rise that were implicitly included in these parameters in 

DICE2007. 

The aggregate damages in DICE2010 are illustrated by Nordhaus (2010 p 3), who notes that “...damages 

in the uncontrolled (baseline) [i.e., reference] case ... in 2095 are $12 trillion, or 2.8 percent of global 

output, for a global temperature increase of 3.4 oC above 1900 levels.” This compares to a loss of 3.2 

percent of global output at 3.4 oC in DICE2007. However, in DICE2010, annual damages are lower in

most of the early periods of the modeling horizon but higher in later periods than would be calculated 

using the DICE2007 damage function. Specifically, the percent difference between damages in the base 

run of DICE2010 and those that would be calculated using the DICE2007 damage function starts at +7 

percent in 2005, decreases to a low of -14 percent in 2065, then continuously increases to +20 percent 

by 2300 (the end of the interagency analysis time horizon), and to +160 percent by the end of the model 

time horizon in 2595. The large increases in the far future years of the time horizon are due to the 

permanence associated with damages from sea level rise, along with the assumption that the sea level is 

projected to continue to rise long after the global average temperature begins to decrease. The changes 

to the loss function generally decrease the interagency working group SCC estimates slightly given that 

relative increases in damages in later periods are discounted more heavily, all else equal.

B. FUND

FUND version 3.8 includes a number of changes over the previous version 3.5 (Narita et al. 2010) used in 

the 2010 interagency report. Documentation supporting FUND and the model’s source code for all 

versions of the model is available from the model authors.8 Notable changes, due to their impact on the 

 

7 The model and documentation, including formulas, are available on the author’s

webpage at http://www.econ.yale.edu/~nordhaus/homepage/RICEmodels.htm.

8 http://www.fund-model.org/. This report uses version 3.8 of the FUND model, which represents a modest update 

to the most recent version of the model to appear in the literature (version 3.7) (Anthoff and Tol, 2013a). For the 

purpose of computing the SCC, the relevant changes (between 3.7 to 3.8) are associated with improving 
8

SCC estimates, are adjustments to the space heating, agriculture, and sea level rise damage functions in 

addition to changes to the temperature response function and the inclusion of indirect effects from 

methane emissions.

9 We discuss each of these in turn.

Space Heating

In FUND, the damages associated with the change in energy needs for space heating are based on the 

estimated impact due to one degree of warming. These baseline damages are scaled based on the 

forecasted temperature anomaly’s deviation from the one degree benchmark and adjusted for changes 

in vulnerability due to economic and energy efficiency growth. In FUND 3.5, the function that scales the 

base year damages adjusted for vulnerability allows for the possibility that in some simulations the 

benefits associated with reduced heating needs may be an unbounded convex function of the 

temperature anomaly. In FUND 3.8, the form of the scaling has been modified to ensure that the 

function is everywhere concave and that there will exist an upper bound on the benefits a region may 

receive from reduced space heating needs. The new formulation approaches a value of two in the limit 

of large temperature anomalies, or in other words, assuming no decrease in vulnerability, the reduced 

expenditures on space heating at any level of warming will not exceed two times the reductions 

experienced at one degree of warming. Since the reduced need for space heating represents a benefit of 

climate change in the model, or a negative damage, this change will increase the estimated SCC. This 

update accounts for a significant portion of the difference in the expected SCC estimates reported by 

the two versions of the model when run probabilistically.

Sea Level Rise and Land Loss

The FUND model explicitly includes damages associated with the inundation of dry land due to sea level 

rise. The amount of land lost within a region is dependent upon the proportion of the coastline being 

protected by adequate sea walls and the amount of sea level rise. In FUND 3.5 the function defining the 

potential land lost in a given year due to sea level rise is linear in the rate of sea level rise for that year. 

This assumption implicitly assumes that all regions are well represented by a homogeneous coastline in 

length and a constant uniform slope moving inland. In FUND 3.8 the function defining the potential land 

lost has been changed to be a convex function of sea level rise, thereby assuming that the slope of the 

shore line increases moving inland. The effect of this change is to typically reduce the vulnerability of 

some regions to sea level rise based land loss, thereby lowering the expected SCC estimate. 10 

Agriculture

 

consistency with IPCC AR4 by adjusting the atmospheric lifetimes of CH4 and N2O and incorporating the indirect 

forcing effects of CH4, along with making minor stability improvements in the sea wall construction algorithm.

9 The other damage sectors (water resources, space cooling, land loss, migration, ecosystems, human health, and 

extreme weather) were not significantly updated.

10 For stability purposes this report also uses an update to the model which assumes that regional coastal 

protection measures will be built to protect the most valuable land first, such that the marginal benefits of coastal 

protection is decreasing in the level of protection following Fankhauser (1995).
9

In FUND, the damages associated with the agricultural sector are measured as proportional to the 

sector’s value. The fraction is bounded from above by one and is made up of three additive components 

that represent the effects from carbon fertilization, the rate of temperature change, and the level of the 

temperature anomaly. In both FUND 3.5 and FUND 3.8, the fraction of the sector’s value lost due to the 

level of the temperature anomaly is modeled as a quadratic function with an intercept of zero. In FUND 

3.5, the coefficients of this loss function are modeled as the ratio of two random normal variables. This 

specification had the potential for unintended extreme behavior as draws from the parameter in the 

denominator approached zero or went negative. In FUND 3.8, the coefficients are drawn directly from 

truncated normal distributions so that they remain in the range 

[0,)

and 

(,0]

, respectively,

ensuring the correct sign and eliminating the potential for divide by zero errors. The means for the new 

distributions are set equal to the ratio of the means from the normal distributions used in the previous 

version. In general the impact of this change has been to decrease the range of the distribution while 

spreading out the distributions’ mass over the remaining range relative to the previous version. The net 

effect of this change on the SCC estimates is difficult to predict.

Transient Temperature Response 

The temperature response model translates changes in global levels of radiative forcing into the current 

expected temperature anomaly. In FUND, a given year’s increase in the temperature anomaly is based 

on a mean reverting function where the mean equals the equilibrium temperature anomaly that would 

eventually be reached if that year’s level of radiative forcing were sustained. The rate of mean reversion 

defines the rate at which the transient temperature approaches the equilibrium. In FUND 3.5, the rate 

of temperature response is defined as a decreasing linear function of equilibrium climate sensitivity to 

capture the fact that the progressive heat uptake of the deep ocean causes the rate to slow at higher 

values of the equilibrium climate sensitivity. In FUND 3.8, the rate of temperature response has been 

updated to a quadratic function of the equilibrium climate sensitivity. This change reduces the sensitivity 

of the rate of temperature response to the level of the equilibrium climate sensitivity, a relationship first 

noted by Hansen et al. (1985) based on the heat uptake of the deep ocean. Therefore in FUND 3.8, the 

temperature response will typically be faster than in the previous version. The overall effect of this 

change is likely to increase estimates of the SCC as higher temperatures are reached during the 

timeframe analyzed and as the same damages experienced in the previous version of the model are now

experienced earlier and therefore discounted less.

Methane

The IPCC AR4 notes a series of indirect effects of methane emissions, and has developed methods for 

proxying such effects when computing the global warming potential of methane (Forster et al. 2007). 

FUND 3.8 now includes the same methods for incorporating the indirect effects of methane emissions. 

Specifically, the average atmospheric lifetime of methane has been set to 12 years to account for the 

feedback of methane emissions on its own lifetime. The radiative forcing associated with atmospheric 

methane has also been increased by 40% to account for its net impact on ozone production and 

stratospheric water vapor. All else equal, the effect of this increased radiative forcing will be to increase 

the estimated SCC values, due to greater projected temperature anomaly.
10

C. PAGE

PAGE09 (Hope 2013) includes a number of changes from PAGE2002, the version used in the 2010 SCC 

interagency report. The changes that most directly affect the SCC estimates include: explicitly modeling 

the impacts from sea level rise, revisions to the damage function to ensure damages are constrained by

GDP, a change in the regional scaling of damages, a revised treatment for the probability of a 

discontinuity within the damage function, and revised assumptions on adaptation. The model also 

includes revisions to the carbon cycle feedback and the calculation of regional temperatures.

11 More 

details on PAGE09 can be found in Hope (2011a, 2011b, 2011c). A description of PAGE2002 can be found 

in Hope (2006). 

Sea Level Rise

While PAGE2002 aggregates all damages into two categories – economic and non-economic impacts -,

PAGE09 adds a third explicit category: damages from sea level rise. In the previous version of the model, 

damages from sea level rise were subsumed by the other damage categories. In PAGE09 sea level 

damages increase less than linearly with sea level under the assumption that land, people, and GDP are 

more concentrated in low-lying shoreline areas. Damages from the economic and non-economic sector 

were adjusted to account for the introduction of this new category. 

Revised Damage Function to Account for Saturation 

In PAGE09, small initial economic and non-economic benefits (negative damages) are modeled for small 

temperature increases, but all regions eventually experience economic damages from climate change,

where damages are the sum of additively separable polynomial functions of temperature and sea level 

rise. Damages transition from this polynomial function to a logistic path once they exceed a certain 

proportion of remaining Gross Domestic Product (GDP) to ensure that damages do not exceed 100 

percent of GDP. This differs from PAGE2002, which allowed Eastern Europe to potentially experience 

large benefits from temperature increases, and which also did not bound the possible damages that 

could be experienced.

Regional Scaling Factors

As in the previous version of PAGE, the PAGE09 model calculates the damages for the European Union 

(EU) and then, assumes that damages for other regions are proportional based on a given scaling factor. 

The scaling factor in PAGE09 is based on the length of a region’s coastline relative to the EU (Hope 

2011b). Because of the long coastline in the EU, other regions are, on average, less vulnerable than the 

EU for the same sea level and temperature increase, but all regions have a positive scaling factor. 

PAGE2002 based its scaling factors on four studies reported in the IPCC’s third assessment report, and

allowed for benefits from temperature increase in Eastern Europe, smaller impacts in developed

countries, and higher damages in developing countries. 

 

11 Because several changes in the PAGE model are structural (e.g., the addition of sea level rise and treatment of 

discontinuity), it is not possible to assess the direct impact of each change on the SCC in isolation as done for the 

other two models above.
11

Probability of a Discontinuity

In PAGE2002, the damages associated with a “discontinuity” (nonlinear extreme event) were modeled 

as an expected value. Specifically, a stochastic probability of a discontinuity was multiplied by the 

damages associated with a discontinuity to obtain an expected value, and this was added to the 

economic and non-economic impacts. That is, additional damages from an extreme event, such as 

extreme melting of the Greenland ice sheet, were multiplied by the probability of the event occurring 

and added to the damage estimate. In PAGE09, the probability of discontinuity is treated as a discrete 

event for each year in the model. The damages for each model run are estimated either with or without 

a discontinuity occurring, rather than as an expected value. A large‐scale discontinuity becomes possible 

when the temperature rises beyond some threshold value between 2 and 4°C. The probability that a 

discontinuity will occur beyond this threshold then increases by between 10 and 30 percent for every 

1°C rise in temperature beyond the threshold. If a discontinuity occurs, the EU loses an additional 5 to 

25 percent of its GDP (drawn from a triangular distribution with a mean of 15 percent) in addition to 

other damages, and other regions lose an amount determined by the regional scaling factor. The 

threshold value for a possible discontinuity is lower than in PAGE2002, while the rate at which the 

probability of a discontinuity increases with the temperature anomaly and the damages that result from 

a discontinuity are both higher than in PAGE2002. The model assumes that only one discontinuity can 

occur and that the impact is phased in over a period of time, but once it occurs, its effect is permanent.

Adaptation

As in PAGE2002, adaptation is available to help mitigate any climate change impacts that occur. In PAGE 

this adaptation is the same regardless of the temperature change or sea level rise and is therefore akin 

to what is more commonly considered a reduction in vulnerability. It is modeled by reducing the 

damages by some percentage. PAGE09 assumes a smaller decrease in vulnerability than the previous 

version of the model and assumes that it will take longer for this change in vulnerability to be realized. 

In the aggregated economic sector, at the time of full implementation, this adaptation will mitigate all 

damages up to a temperature increase of 1°C, and for temperature anomalies between 1°C and 2°C, it 

will reduce damages by 15-30 percent (depending on the region). However, it takes 20 years to fully 

implement this adaptation. In PAGE2002, adaptation was assumed to reduce economic sector damages 

up to 2°C by 50-90 percent after 20 years. Beyond 2°C, no adaptation is assumed to be available to 

mitigate the impacts of climate change. For the non-economic sector, in PAGE09 adaptation is available 

to reduce 15 percent of the damages due to a temperature increase between 0°C and 2°C and is 

assumed to take 40 years to fully implement, instead of 25 percent of the damages over 20 years 

assumed in PAGE2002. Similarly, adaptation is assumed to alleviate 25-50 percent of the damages from 

the first 0.20 to 0.25 meters of sea level rise but is assumed to be ineffective thereafter. Hope (2011c) 

estimates that the less optimistic assumptions regarding the ability to offset impacts of temperature and 

sea level rise via adaptation increase the SCC by approximately 30 percent.

Other Noteworthy Changes
12

Two other changes in the model are worth noting. There is a change in the way the model accounts for 

decreased CO2 absorption on land and in the ocean as temperature rises. PAGE09 introduces a linear 

feedback from global mean temperature to the percentage gain in the excess concentration of CO2, 

capped at a maximum level. In PAGE2002, an additional amount was added to the CO2 emissions each 

period to account for a decrease in ocean absorption and a loss of soil carbon. Also updated is the 

method by which the average global and annual temperature anomaly is downscaled to determine 

annual average regional temperature anomalies to be used in the regional damage functions. In 

PAGE2002, the scaling was determined solely based on regional difference in emissions of sulfate 

aerosols. In PAGE09, this regional temperature anomaly is further adjusted using an additive factor that 

is based on the average absolute latitude of a region relative to the area weighted average absolute 

latitude of the Earth’s landmass, to capture relatively greater changes in temperature forecast to be 

experienced at higher latitudes.

III. Revised SCC Estimates

The updated versions of the three integrated assessment models were run using the same methodology 

detailed in the 2010 TSD (Interagency Working Group on Social Cost of Carbon 2010). The approach 

along with the inputs for the socioeconomic emissions scenarios, equilibrium climate sensitivity 

distribution, and discount rate remains the same. This includes the five reference scenarios based on the 

EMF-22 modeling exercise, the Roe and Baker equilibrium climate sensitivity distribution calibrated to 

the IPCC AR4, and three constant discount rates of 2.5, 3, and 5 percent.

As was previously the case, the use of three models, three discount rates, and five scenarios produces 

45 separate distributions for the global SCC. The approach laid out in the 2010 TSD applied equal weight 

to each model and socioeconomic scenario in order to reduce the dimensionality down to three 

separate distributions representative of the three discount rates. The interagency group selected four 

values from these distributions for use in regulatory analysis. Three values are based on the average SCC 

across models and socio-economic-emissions scenarios at the 2.5, 3, and 5 percent discount rates, 

respectively. The fourth value was chosen to represent the higher-than-expected economic impacts 

from climate change further out in the tails of the SCC distribution. For this purpose, the 95th percentile 

of the SCC estimates at a 3 percent discount rate was chosen. (A detailed set of percentiles by model 

and scenario combination and additional summary statistics for the 2020 values is available in the 

Appendix.) As noted in the 2010 TSD, “the 3 percent discount rate is the central value, and so the 

central value that emerges is the average SCC across models at the 3 percent discount rate”

(Interagency Working Group on Social Cost of Carbon 2010, p. 25). However, for purposes of capturing 

the uncertainties involved in regulatory impact analysis, the interagency group emphasizes the 

importance and value of including all four SCC values.

Table 2 shows the four selected SCC estimates in five year increments from 2010 to 2050. Values for 

2010, 2020, 2030, 2040, and 2050 are calculated by first combining all outputs (10,000 estimates per 
13

model run) from all scenarios and models for a given discount rate. Values for the years in between are 

calculated using linear interpolation. The full set of revised annual SCC estimates between 2010 and 

2050 is reported in the Appendix. 

Table 2: Revised Social Cost of CO2, 2010 – 2050 (in 2007 dollars per metric ton of CO2)

Discount Rate 5.0% 3.0% 2.5% 3.0%

Year Avg Avg Avg 95th

2010 11 32 51 89

2015 11 37 57 109

2020 12 43 64 128

2025 14 47 69 143

2030 16 52 75 159

2035 19 56 80 175

2040 21 61 86 191

2045 24 66 92 206

2050 26 71 97 220

The SCC estimates using the updated versions of the models are higher than those reported in the 2010 

TSD due to the changes to the models outlined in the previous section. By way of comparison, the 2020 

SCC estimates reported in the original TSD were $7, $26, $42 and $81 (2007$) (Interagency Working 

Group on Social Cost of Carbon 2010). Figure 1 illustrates where the four SCC values for 2020 fall within 

the full distribution for each discount rate based on the combined set of runs for each model and 

scenario (150,000 estimates in total for each discount rate). In general, the distributions are skewed to 

the right and have long tails. The Figure also shows that the lower the discount rate, the longer the right 

tail of the distribution.

Figure 1: Distribution of SCC Estimates for 2020 (in 2007$ per metric ton CO2)
14

As was the case in the 2010 TSD, the SCC increases over time because future emissions are expected to 

produce larger incremental damages as physical and economic systems become more stressed in 

response to greater climatic change. The approach taken by the interagency group is to compute the 

cost of a marginal ton emitted in the future by running the models for a set of perturbation years out to 

2050. Table 3 illustrates how the growth rate for these four SCC estimates varies over time. 

Table 3: Average Annual Growth Rates of SCC Estimates between 2010 and 2050

Average Annual Growth 5.0% 3.0% 2.5% 3.0%

Rate (%) Avg Avg Avg 95th

2010-2020 1.2% 3.3% 2.4% 4.4%

2020-2030 3.4% 2.1% 1.7% 2.4%

2030-2040 3.0% 1.9% 1.5% 2.1%

2040-2050 2.6% 1.6% 1.3% 1.5%

The future monetized value of emission reductions in each year (the SCC in year t multiplied by the 

change in emissions in year t) must be discounted to the present to determine its total net present value 

for use in regulatory analysis. As previously discussed in the 2010 TSD, damages from future emissions 

should be discounted at the same rate as that used to calculate the SCC estimates themselves to ensure 

internal consistency – i.e., future damages from climate change, whether they result from emissions 

today or emissions in a later year, should be discounted using the same rate. 

Under current OMB guidance contained in Circular A-4, analysis of economically significant proposed 

and final regulations from the domestic perspective is required, while analysis from the international 

perspective is optional. However, the climate change problem is highly unusual in at least two respects. 

First, it involves a global externality: emissions of most greenhouse gases contribute to damages around 
15

the world even when they are emitted in the United States. Consequently, to address the global nature 

of the problem, the SCC must incorporate the full (global) damages caused by GHG emissions. Second, 

climate change presents a problem that the United States alone cannot solve. Even if the United States 

were to reduce its greenhouse gas emissions to zero, that step would be far from enough to avoid 

substantial climate change. Other countries would also need to take action to reduce emissions if 

significant changes in the global climate are to be avoided. Emphasizing the need for a global solution to 

a global problem, the United States has been actively involved in seeking international agreements to 

reduce emissions and in encouraging other nations, including emerging major economies, to take 

significant steps to reduce emissions. When these considerations are taken as a whole, the interagency 

group concluded that a global measure of the benefits from reducing U.S. emissions is preferable. For 

additional discussion, see the 2010 TSD.

IV. Other Model Limitations and Research Gaps

The 2010 interagency SCC TSD discusses a number of important limitations for which additional research 

is needed. In particular, the document highlights the need to improve the quantification of both noncatastrophic and catastrophic damages, the treatment of adaptation and technological change, and the 

way in which inter-regional and inter-sectoral linkages are modeled. While the new version of the 

models discussed above offer some improvements in these areas, further work remains warranted. The 

2010 TSD also discusses the need to more carefully assess the implications of risk aversion for SCC 

estimation as well as the inability to perfectly substitute between climate and non-climate goods at 

higher temperature increases, both of which have implications for the discount rate used. EPA, DOE, and 

other agencies continue to engage in research on modeling and valuation of climate impacts that can 

potentially improve SCC estimation in the future. 

References

Anthoff, D. and Tol, R.S.J. 2013a. The uncertainty about the social cost of carbon: a decomposition 

analysis using FUND. Climatic Change 117: 515–530.

Anthoff, D. and Tol, R.S.J. 2013b. Erratum to: The uncertainty about the social cost of carbon: A 

decomposition analysis using FUND. Climatic Change. Advance online publication. doi: 10.1007/s10584-

013-0959-1.

Fankhauser, S. 1995. Valuing climate change: The economics of the greenhouse. London, England: 

Earthscan.

Forster, P., V. Ramaswamy, P. Artaxo, T. Berntsen, R. Betts, D.W. Fahey, J. Haywood, J. Lean, D.C. Lowe, 

G. Myhre, J. Nganga, R. Prinn, G. Raga, M. Schulz and R. Van Dorland. 2007. Changes in Atmospheric 

Constituents and in Radiative Forcing. In: Climate Change 2007: The Physical Science Basis. Contribution 

of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change 

[Solomon, S., D. Qin, M. Manning, Z. Chen, M. Marquis, K.B. Averyt, M.Tignor and H.L. Miller (eds.)]. 

Cambridge University Press, Cambridge, United Kingdom and New York, NY, USA.
16

Hope, Chris. 2006. “The Marginal Impact of CO2 from PAGE2002: An Integrated Assessment Model 

Incorporating the IPCC’s Five Reasons for Concern.” The Integrated Assessment Journal. 6(1): 19–56.

Hope, Chris. 2011a “The PAGE09 Integrated Assessment Model: A Technical Description” Cambridge 

Judge Business School Working Paper No. 4/2011 (April). Accessed November 23, 2011: 

http://www.jbs.cam.ac.uk/research/working_papers/2011/wp1104.pdf.

Hope, Chris. 2011b “The Social Cost of CO2 from the PAGE09 Model” Cambridge Judge Business School 

Working Paper No. 5/2011 (June). Accessed November 23, 2011: 

http://www.jbs.cam.ac.uk/research/working_papers/2011/wp1105.pdf.

Hope, Chris. 2011c “New Insights from the PAGE09 Model: The Social Cost of CO2” Cambridge Judge 

Business School Working Paper No. 8/2011 (July). Accessed November 23, 2011: 

http://www.jbs.cam.ac.uk/research/working_papers/2011/wp1108.pdf.

Hope, C. 2013. Critical issues for the calculation of the social cost of CO2: why the estimates from 

PAGE09 are higher than those from PAGE2002. Climatic Change 117: 531–543.

Interagency Working Group on Social Cost of Carbon. 2010. Social Cost of Carbon for Regulatory Impact 

Analysis under Executive Order 12866. February. United States Government. 

http://www.whitehouse.gov/sites/default/files/omb/inforeg/for-agencies/Social-Cost-of-Carbon-forRIA.pdf.

Meehl, G.A., T.F. Stocker, W.D. Collins, P. Friedlingstein, A.T. Gaye, J.M. Gregory, A. Kitoh, R. Knutti, J.M. 

Murphy, A. Noda, S.C.B. Raper, I.G. Watterson, A.J. Weaver and Z.-C. Zhao. 2007. Global Climate 

Projections. In: Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the 

Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. 

Manning, Z. Chen, M. Marquis, K.B. Averyt, M. Tignor and H.L. Miller (eds.)]. Cambridge University Press, 

Cambridge, United Kingdom and New York, NY, USA.

Narita, D., R. S. J. Tol and D. Anthoff. 2010. Economic costs of extratropical storms under climate change: 

an application of FUND. Journal of Environmental Planning and Management 53(3): 371-384.

National Academy of Sciences. 2011. Climate Stabilization Targets: Emissions, Concentrations, and 

Impacts over Decades to Millennia. Washington, DC: National Academies Press, Inc. 

Nicholls, R.J., N. Marinova, J.A. Lowe, S. Brown, P. Vellinga, D. de Gusmão, J. Hinkel and R.S.J. Tol. 2011. 

Sea-level rise and its possible impacts given a ‘beyond 4°C world’ in the twenty-first century. Phil. Trans. 

R. Soc. A 369(1934): 161-181.

Nordhaus, W. 2010. Economic aspects of global warming in a post-Copenhagen environment. 

Proceedings of the National Academy of Sciences 107(26): 11721-11726.

Nordhaus, W. 2008. A Question of Balance: Weighing the Options on Global Warming Policies. New 

Haven, CT: Yale University Press.
17

Randall, D.A., R.A. Wood, S. Bony, R. Colman, T. Fichefet, J. Fyfe, V. Kattsov, A. Pitman, J. Shukla, J. 

Srinivasan, R.J. Stouffer, A. Sumi and K.E. Taylor. 2007. Climate Models and Their Evaluation. In: Climate 

Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment 

Report of the Intergovernmental Panel on Climate Change [Solomon, S., D. Qin, M. Manning, Z. Chen, M. 

Marquis, K.B. Averyt, M.Tignor and H.L. Miller (eds.)]. Cambridge University Press, Cambridge, United 

Kingdom and New York, NY, USA.
18

Appendix A

Table A1: Annual SCC Values: 2010-2050 (2007$/metric ton CO2)

Discount Rate 5.0% 3.0% 2.5% 3.0%

Year Avg Avg Avg 95th

2010 11 32 51 89

2011 11 33 52 93

2012 11 34 54 97

2013 11 35 55 101

2014 11 36 56 105

2015 11 37 57 109

2016 12 38 59 112

2017 12 39 60 116

2018 12 40 61 120

2019 12 42 62 124

2020 12 43 64 128

2021 12 43 65 131

2022 13 44 66 134

2023 13 45 67 137

2024 14 46 68 140

2025 14 47 69 143

2026 15 48 70 146

2027 15 49 71 149

2028 15 50 72 152

2029 16 51 73 155

2030 16 52 75 159

2031 17 52 76 162

2032 17 53 77 165

2033 18 54 78 168

2034 18 55 79 172

2035 19 56 80 175

2036 19 57 81 178

2037 20 58 83 181

2038 20 59 84 185

2039 21 60 85 188

2040 21 61 86 191

2041 22 62 87 194

2042 22 63 88 197

2043 23 64 89 200

2044 23 65 90 203

2045 24 66 92 206

2046 24 67 93 209

2047 25 68 94 211

2048 25 69 95 214

2049 26 70 96 217

2050 26 71 97 220
19

Table A2: 2020 Global SCC Estimates at 2.5 Percent Discount Rate (2007$/metric ton CO2)

Percentile 1st 5th 10th 25th 50th Avg 75th 90th 95th 99th

Scenario12 PAGE

IMAGE 6 11 15 27 58 129 139 327 515 991

MERGE 

Optimistic

4 6 9 16 34 78 82 196 317 649

MESSAGE 4 8 11 20 42 108 107 278 483 918

MiniCAM Base 5 9 12 22 47 107 113 266 431 872

5th Scenario 2 4 6 11 25 85 68 200 387 955

Scenario DICE

IMAGE 25 31 37 47 64 72 92 123 139 161

MERGE 

Optimistic

14 18 20 26 36 40 50 65 74 85

MESSAGE 20 24 28 37 51 58 71 95 109 221

MiniCAM Base 20 25 29 38 53 61 76 102 117 135

5th Scenario 17 22 25 33 45 52 65 91 106 126

Scenario FUND

IMAGE -14 -2 4 15 31 39 55 86 107 157

MERGE 

Optimistic

-6 1 6 14 27 35 46 70 87 141

MESSAGE -16 -5 1 11 24 31 43 67 83 126

MiniCAM Base -7 2 7 16 32 39 55 83 103 158

5th Scenario -29 -13 -6 4 16 21 32 53 69 103

Table A3: 2020 Global SCC Estimates at 3 Percent Discount Rate (2007$/metric ton CO2)

Percentile 1st 5th 10th 25th 50th Avg 75th 90th 95th 99th

Scenario PAGE

IMAGE 4 7 10 18 38 91 95 238 385 727

MERGE 

Optimistic

2 4 6 11 23 56 58 142 232 481

MESSAGE 3 5 7 13 29 75 74 197 330 641

MiniCAM Base 3 5 8 14 30 73 75 184 300 623

5th Scenario 1 3 4 7 17 58 48 136 264 660

Scenario DICE

IMAGE 16 21 24 32 43 48 60 79 90 102

MERGE 

Optimistic

10 13 15 19 25 28 35 44 50 58

MESSAGE 14 18 20 26 35 40 49 64 73 83

MiniCAM Base 13 17 20 26 35 39 49 65 73 85

5th Scenario 12 15 17 22 30 34 43 58 67 79

Scenario FUND

IMAGE -13 -4 0 8 18 23 33 51 65 99

MERGE 

Optimistic

-7 -1 2 8 17 21 29 45 57 95

MESSAGE -14 -6 -2 5 14 18 26 41 52 82

MiniCAM Base -7 -1 3 9 19 23 33 50 63 101

5th Scenario -22 -11 -6 1 8 11 18 31 40 62

 

12 See 2010 TSD for a description of these scenarios.
20

Table A4: 2020 Global SCC Estimates at 5 Percent Discount Rate (2007$/metric ton CO2)

Percentile 1st 5th 10th 25th 50th Avg 75th 90th 95th 99th

Scenario PAGE

IMAGE 1 2 2 5 10 28 27 71 123 244

MERGE 

Optimistic

1 1 2 3 7 17 17 45 75 153

MESSAGE 1 1 2 4 9 24 22 60 106 216

MiniCAM Base 1 1 2 3 8 21 21 54 94 190

5th Scenario 0 1 1 2 5 18 14 41 78 208

Scenario DICE

IMAGE 6 8 9 11 14 15 18 22 25 27

MERGE 

Optimistic

4 5 6 7 9 10 12 15 16 18

MESSAGE 6 7 8 10 12 13 16 20 22 25

MiniCAM Base 5 6 7 8 11 12 14 18 20 22

5th Scenario 5 6 6 8 10 11 14 17 19 21

Scenario FUND

IMAGE -9 -5 -4 -1 2 3 6 10 14 24

MERGE 

Optimistic

-6 -4 -2 0 3 4 6 11 15 26

MESSAGE -10 -6 -4 -1 1 2 5 9 12 21

MiniCAM Base -7 -4 -2 0 3 4 6 11 14 25

5th Scenario -11 -7 -5 -3 0 0 3 5 7 13
21

Table A5: Additional Summary Statistics of 2020 Global SCC Estimates

Discount rate: 5.0% 3.0% 2.5%

Statistic: Mean Variance Skewness Kurtosis Mean Variance Skewness Kurtosis Mean Variance Skewness Kurtosis

DICE 12 26 2 15 38 409 3 24 57 1097 3 30

PAGE 22 1616 5 32 71 14953 4 22 101 29312 4 23

FUND 3 41 5 179 19 1452 -42 8727 33 6154 -73 14931
22

Appendix B

The November 2013 revision of this technical support document is based on two corrections to the runs 

based on the FUND model. First, the potential dry land loss in the algorithm that estimates regional 

coastal protections was misspecified in the model’s computer code. This correction is covered in an 

erratum to Anthoff and Tol (2013a) published in the same journal (Climatic Change) in October 2013

(Anthoff and Tol (2013b)). Second, the equilibrium climate sensitivity distribution was inadvertently 

specified as a truncated Gamma distribution (the default in FUND) as opposed to the truncated Roe and 

Baker distribution as was intended. The truncated Gamma distribution used in the FUND runs had 

approximately the same mean and upper truncation point, but lower variance and faster decay of the 

upper tail, as compared to the intended specification based on the Roe and Baker distribution. The 

difference between the original estimates reported in the May 2013 version of this technical support 

document and this revision are generally one dollar or less.