# Potential Benefit of Carbon Benchmarking: Analysis of Semiconductor Industry in Taiwan
## 2 Evaluation Method
### Social Cost of Carbon  
An examination of the methods used in this field shows that, currently, the most widely used environment/cost benefit indicator for measuring reductions in greenhouse gas emissions is the social cost of carbon (SCC). In methodological terms, the SCC mainly employs a climate module integrated assessment model (IAM) to implement assessment. The IAM model makes various assumptions with respect to the impact of climate change on the economy, e.g., assumptions regarding trends in greenhouse gas emissions, changes in global temperatures, and other possible effects of climate change, such as rising sea levels, changes in the intensity of precipitation, increased incidence of extreme weather events, etc. The IAM model can be used to gauge the losses that climate change from greenhouse gas emissions causes to society; this in turn can be used to provide a quantitative measurement of the costs incurred from every ton of CO\({}_{2}\) emissions, and the environmental benefits arising from every ton by which CO\({}_{2}\) emissions are reduced.  
As regards the practical implementation of the SCC concept in relation to government policy, the United States (U.S.) government established an Interagency Working Group on the Social Cost of Carbon in 2009. The purpose of this working group was to calculate the monetary benefits for every ton by which CO\({}_{2}\) emissions are reduced; the working group published its first SCC Assessment Report in 2010 [30], followed by a second report in 2013, and a revised third report in July 2015 [31].  
The working group's reports mainly utilize the world's three mostly widely used IAM models--the Policy Analysis of the Greenhouse Effect (PAGE) model [32], the Dynamic Integrated model of Climate and the Economy (DICE) model [33], and the Climate Framework for Uncertainty, Negotiation, and Distribution (FUND) model [34]--to calculate the amount of harm caused globally by every ton of CO\({}_{2}\) emissions on the basis of a \"global yardstick.\"  
As the basis of the calculation is global, and as the effects of CO\({}_{2}\) emissions are non-segmented, the figures given in the working group reports for the harm caused by CO\({}_{2}\) emissions are applicable globally (i.e., the impact on the Earth of one ton of emissions originating in Taiwan is the same as one ton of emissions originating in the U.S.). This means that \"harm\" in this case should not be taken to mean harm caused to any specific locality; rather, it represents the harm caused to the planet as a whole by excessively high emissions. Similarly, the social benefits deriving from efforts to reduce emissions are also global in scope, rather than being limited to a specific country. In calculating SCC, the working group first determines the values for SCC obtained with each of the three IAM models listed above, i.e., DICE, PAGE, and FUND, and then calculates the average of these values.  
Calculation of the environmental benefits from the total amount of emission reduction is the multiplication of emissions reduction and its corresponding SCC value. SCC is not only widely used by the U.S. government when calculating the environmental benefits from emissions reduction policies, it is also used by many government agencies such as in the United Kingdom (U.K.) for assessing the effectiveness of government policies [35] (according to this report, British government agencies that use SCC for policy evaluation include the Department for Environment, Food and Rural Affairs (DEFRA), the Department for Transport (DFT), the Department for Trade and Industry (DTI), the Office of Gas and Electricity markets (OFGEM), the Office of the Deputy Prime Minister (OPDM), and the Environment Agency (EA)). On the basis of the method outlined above, this study uses the SCC method to evaluate the environmental benefits from carbon reduction from the implementation of benchmarking in the semiconductor industry in Taiwan.