Choosing a monetary value of greenhouse gases in assessment tools: A comprehensive review

Abstract

a b s t r a c tThere is a societal need for using monetary estimates of social impacts of CO 2 and other greenhouse gases in different assessment tools, such as cost-benefit analysis and life-cycle assessment. A number of estimates are available in the literature. Since these differ by several orders of magnitude, there is ambiguity and confusion about which to use. This review aims to give some guidance on this issue. The variation in carbon value estimates depends on several uncertain aspects e which will remain uncertain e including climate sensitivity, assumptions about future emissions, and decision makers' ethical standpoints. Hence, there is no single correct monetary value for CO 2 : it will depend on the ethical standpoint of the user. Due to this, estimates of social costs of CO 2 emissions cannot be used for calculating an optimal emission level, although they can inform such assessments. It is suggested that marginal abatement cost values are used for emissions capped by binding targets in short-term assessments, and that social cost of carbon values should be used for all other emissions. Benchmark principles for choosing a monetary carbon value are suggested along with associated estimates. Depending on the choices made with regard to ethical standpoints and assumptions about future emissions and climate sensitivity, estimates can be significantly higher than the ones typically used in assessment tools today. The estimates need continuous updating, and there is need for better understanding and communication around the limitations and uncertainties involved.

Taking the Time Characteristic into Account of Life Cycle Assessment: Method and Application for Buildings

“…According to the WTP method, Li et al put forward the carbon emission and energy damage costs of China, with 0.22 Yuan/kg CO 2 -e and 3.79 × 10 −3 Yuan/kgce, respectively [27]. By reviewing the existing literature, Isacs et al [28] give some guidance to practitioners who want to-or must-apply a monetary value of CO 2 and other greenhouse gases in tools, such as cost-benefit analysis (CBA) and LCA. For example, the minimum level of the Swedish tax on carbon emissions in 2015 is 72 EUR/ton CO 2 .…”

Assessing GHG Benefits Induced by ICT Services in Practice: A Case Study and Resulting Challenges

“…The price of natural gas in the US has been $3-$13 per thousand cubic feet for the last 15 years. 11 For the sake of this calculation, we set the value $5 per cubic foot, corresponding to $0.128 per kg of NG, yielding a direct saving of $310,000 per year.…”

“…12 But several much higher estimates exist, such as in the model calculation by Moore and Diaz who estimate the cost to $220 per tonne [10]. And in a paper by Isacs et al [11], many different ways of estimating GHG-values are discussed. One conclusion is that the value ultimately depends on the ethical standpoint of the user -a low value, down €6 per tonne can be used if the importance of future generations is low, whereas the value is much higher, up to €1200 per ton, when long-term considerations are included.…”

“…One conclusion is that the value ultimately depends on the ethical standpoint of the user -a low value, down €6 per tonne can be used if the importance of future generations is low, whereas the value is much higher, up to €1200 per ton, when long-term considerations are included. [11] suggests using an intermediate value of €365 per tonne. This corresponds to $412 per tonne; a factor of 10 higher than the current US government value.…”

The Share of Agriculture in Greenhouse Gas Emissions in European Union Countries – Valuation

“…However GHG belongs to externalities, which means there is no direct cost analysis of its emission. Only indirect methods are available (Adaman et al, 2011;Isacs, 2016;Dequiedt and Moran, 2015;Vermont and De Cara, 2010).…”