Periodically, the Office of Competition and Economic Analysis provides recent updates about Industry Regulation and its economic impacts.

April, 2010: Social Costs of Carbon

Regulations aimed at reducing greenhouse gas emissions try to balance compliance costs of a given rule with the incremental benefits from reducing the U.S. contribution to climate change. In order to balance the costs and benefits explicitly, rulemaking agencies need some estimate of the climate change related damage associated with one extra ton of emissions, commonly known as the “Social Cost of Carbon.” An interagency team of experts led by the Council of Economic Advisors met on a regular basis to consider public comments, explore the technical literature in relevant fields, and discuss key model inputs and assumptions. The team ultimately produced four estimates of the cost of a ton of carbon dioxide emissions, with a central value of $21.40 per ton of carbon dioxide for 2010. These estimates will be used in cost benefit analyses by all U.S. agencies that promulgate regulations that affect U.S. carbon dioxide emissions.