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Damage function uncertainty increases the social cost of methane and nitrous oxide

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  • Tianpeng Wang

    (Tsinghua University)

  • Fei Teng

    (Tsinghua University)

Abstract

The social cost of greenhouse gases (SC-GHGs), indicating marginal damage from GHG emissions, is a valuable and informative metric for policymaking. However, existing social cost estimates for methane (SC-CH4) and nitrous oxide (SC-N2O) have not kept pace with the latest scientific findings in damage functions, climate models and socioeconomic projections. We applied a multimodel assessment framework, incorporating recent advances that are neglected by past studies to re-estimate SC-CH4 and SC-N2O. Models of gross domestic product (GDP) level effects reveal US$2,900 per t-CH4 (in 2020 US dollars) for SC-CH4 and US$49,600 per t-N2O for SC-N2O for the emissions year 2020, indicating a 2-fold increase over previous estimates. Models incorporating GDP growth effects over time present a further 15–25-fold increase in estimates, dominating the uncertainty in social cost estimates. Although substantial uncertainty remains, our findings suggest greater benefits from CH4 and N2O mitigation policies compared with those of previous studies.

Suggested Citation

  • Tianpeng Wang & Fei Teng, 2023. "Damage function uncertainty increases the social cost of methane and nitrous oxide," Nature Climate Change, Nature, vol. 13(11), pages 1258-1265, November.
    • Handle: RePEc:nat:natcli:v:13:y:2023:i:11:d:10.1038_s41558-023-01803-4
    DOI: 10.1038/s41558-023-01803-4
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