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Does the Social Cost of Carbon Matter? Evidence from US Policy

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  • Robert W. Hahn
  • Robert A. Ritz

Abstract

We evaluate a recent US initiative to include the social cost of carbon (SCC) in regulatory decisions. To our knowledge, this paper provides the first systematic analysis of the extent to which applying the SCC has affected national policy. We examine all economically significant federal regulations since 2008 and obtain an unexpected result: putting a value on changes in carbon dioxide emissions does not generally affect the ranking of the preferred policy compared with the status quo. Overall, we find little evidence that using the SCC has mattered for the choice of policy in the United States. This is true even for policies explicitly aimed at reducing carbon dioxide emissions. We offer some possible explanations for the patterns observed in the data.

Suggested Citation

  • Robert W. Hahn & Robert A. Ritz, 2015. "Does the Social Cost of Carbon Matter? Evidence from US Policy," The Journal of Legal Studies, University of Chicago Press, vol. 44(1), pages 229-248.
    • Handle: RePEc:ucp:jlstud:doi:10.1086/680990
    DOI: 10.1086/680990
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    References listed on IDEAS

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    1. Winston Harrington & Richard D. Morgenstern & Peter Nelson, 2000. "On the accuracy of regulatory cost estimates," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 19(2), pages 297-322.
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    5. Lave, Lester B, 1984. "Controlling Contradictions among Regulations," American Economic Review, American Economic Association, vol. 74(3), pages 471-475, June.
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    7. Richard S. J. Tol, 2009. "The Economic Effects of Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 29-51, Spring.
    8. Robert W. Hahn & Paul C. Tetlock, 2008. "Has Economic Analysis Improved Regulatory Decisions?," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 67-84, Winter.
    9. Elisabeth J. Moyer & Mark D. Woolley & Nathan J. Matteson & Michael J. Glotter & David A. Weisbach, 2014. "Climate Impacts on Economic Growth as Drivers of Uncertainty in the Social Cost of Carbon," The Journal of Legal Studies, University of Chicago Press, vol. 43(2), pages 401-425.
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    Cited by:

    1. Richard S.J. Tol, 2018. "The impact of climate change and the social cost of carbon," Working Paper Series 1318, Department of Economics, University of Sussex Business School.
    2. Richard S.J. Tol, 2017. "The Private Benefit of Carbon and its Social Cost," Working Paper Series 0717, Department of Economics, University of Sussex Business School.
    3. Tol, Richard S.J., 2019. "A social cost of carbon for (almost) every country," Energy Economics, Elsevier, vol. 83(C), pages 555-566.

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