The Social Cost of Methane Emily Wimberger Chief
Description: The Social Cost of Methane Emily Wimberger Chief Economist California air Resources Board California Air Resources Board 1 Social Cost of Greenhouse Gases Since 2008, federal agencies have been incorporating the social cost of GHGs
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slide1. The Social Cost of Methane Emily Wimberger
Chief Economist
California air Resources Board California Air Resources Board 1<br>
slide2. Social Cost of Greenhouse Gases Since 2008, federal agencies have been incorporating the social cost of GHGs including carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) into regulatory impact assessment
U.S. EPA
Department of Transportation
Department of Energy
In 2009, the Interagency Working Group (IWG) was convened to develop a methodology for estimating the social cost of carbon (SCC)
Standardized assumptions
Based on estimates from three Integrated Assessment Models (IAMs) California Air Resources Board 2<br>
slide3. Social Cost of Methane The social cost of methane (SCM) for a given year is an estimate, in dollars, of the present discounted value of future damage caused by a one metric ton increase in CH4 emissions into the atmosphere in that year, or equivalently, the benefits of reducing CH4 emissions by the same amount in that year.
Provides a comprehensive measure of the net damages – the monetized value of net impacts from global climate change that result from an additional ton of CH4
Damages include
Changes in net agricultural productivity
Energy use
Human health
Property damage from increased flood risk
Water availability
Costal communities
Biodiversity California Air Resources Board 3<br>
slide4. SCM Details IAMs estimate the environmental damages from a given year in the future and discount the value of the damages back to the present
Increases over time as systems become stressed
Highly sensitive to discount rates
The value placed on future environmental damages
Higher rate discounts the value placed on future damages
IWG standardized range from 2.5% to 5% California Air Resources Board 4<br>
slide5. Social Cost of Methane (2007$ per tonne) California Air Resources Board 5<br>
slide6. Social Cost of Carbon (2007$ per tonne) California Air Resources Board 6<br>
slide7. AB 197 Consider the social costs of the emissions of greenhouse gases
Consider the cost-effectiveness, including avoided social costs, of measures in the Scoping Plan
Defines social costs as “an estimate of the economic damages, including but not limited to, changes in net agricultural productivity; impacts to public health; climate adaptation impacts, such as property damages from increased flood risk; and changes in energy system costs, per metric ton of greenhouse gas emissions per year” California Air Resources Board 7<br>
slide8. Federal Action on Social Costs Withdrew reports related to social cost of greenhouse gases
Revised estimates of the social cost of greenhouse gases
Federal valuation
Discount rates
California will rely on IWG social cost values
In line with best available science
National Academies recommendations
Estimates are most robust, reliable, and appropriate California Air Resources Board 8<br>
Chief Economist
California air Resources Board California Air Resources Board 1<br>
slide2. Social Cost of Greenhouse Gases Since 2008, federal agencies have been incorporating the social cost of GHGs including carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) into regulatory impact assessment
U.S. EPA
Department of Transportation
Department of Energy
In 2009, the Interagency Working Group (IWG) was convened to develop a methodology for estimating the social cost of carbon (SCC)
Standardized assumptions
Based on estimates from three Integrated Assessment Models (IAMs) California Air Resources Board 2<br>
slide3. Social Cost of Methane The social cost of methane (SCM) for a given year is an estimate, in dollars, of the present discounted value of future damage caused by a one metric ton increase in CH4 emissions into the atmosphere in that year, or equivalently, the benefits of reducing CH4 emissions by the same amount in that year.
Provides a comprehensive measure of the net damages – the monetized value of net impacts from global climate change that result from an additional ton of CH4
Damages include
Changes in net agricultural productivity
Energy use
Human health
Property damage from increased flood risk
Water availability
Costal communities
Biodiversity California Air Resources Board 3<br>
slide4. SCM Details IAMs estimate the environmental damages from a given year in the future and discount the value of the damages back to the present
Increases over time as systems become stressed
Highly sensitive to discount rates
The value placed on future environmental damages
Higher rate discounts the value placed on future damages
IWG standardized range from 2.5% to 5% California Air Resources Board 4<br>
slide5. Social Cost of Methane (2007$ per tonne) California Air Resources Board 5<br>
slide6. Social Cost of Carbon (2007$ per tonne) California Air Resources Board 6<br>
slide7. AB 197 Consider the social costs of the emissions of greenhouse gases
Consider the cost-effectiveness, including avoided social costs, of measures in the Scoping Plan
Defines social costs as “an estimate of the economic damages, including but not limited to, changes in net agricultural productivity; impacts to public health; climate adaptation impacts, such as property damages from increased flood risk; and changes in energy system costs, per metric ton of greenhouse gas emissions per year” California Air Resources Board 7<br>
slide8. Federal Action on Social Costs Withdrew reports related to social cost of greenhouse gases
Revised estimates of the social cost of greenhouse gases
Federal valuation
Discount rates
California will rely on IWG social cost values
In line with best available science
National Academies recommendations
Estimates are most robust, reliable, and appropriate California Air Resources Board 8<br>