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

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.