Question
Which one of the following statements best describes the term social cost of carbon ?
(a) Long term damage done by a tone of CO2 emissions in a given year
(b) Requirements of fossil fuels for a country to provide a goods and services to its citizen’s based on the burning of those fuels efforts put in by a climate refugee to adapt to live in a new place.
(c) Efforts put in by the climate refugee to adapt to live in a new place.
(d) Contribution of an individual person to the carbon Footprint on the planet earth.
Answer:
A
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Explanation:
The social cost of carbon (SCC) is a measure that assigns a monetary value to the benefits and costs of emitting one additional ton of carbon dioxide (CO2) into the atmosphere. It helps in weighing the benefits of reducing global warming against the costs of cutting emissions. By estimating the net present value of climate change impacts over a long time period, the SCC accounts for the damages and costs associated with CO2 emissions. It is used to address the market failure of emissions by considering the societal costs borne by society as a whole. Incorporating the SCC into policy decisions enables better alignment of costs and benefits, guiding actions to mitigate climate change.