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  Social Costs of Carbon and Air Quality Externalities

The Social Cost of Carbon 

The marginal economic cost of greenhouse gas emissions, often known as the Social Cost of Carbon (SCC), is an estimate of the extra (or marginal) impact caused by the emission of one additional tonne of carbon (or CO2). 

Paul Watkiss Associates has undertaken a large number of studies on the SCC, and the use of these values and aggregate economic estimates in policy, with a particular focus in the UK. 

The most recent publications are summarised below.

Air Quality Externalities and Damage Costs

Paul Watkiss Associates has expertise in air quality externalities, and the application to policy appraisal in the UK and Europe.  


Recent studies are summarised below.



Watkiss, P. and Hope, C. (2011).  Using the social cost of carbon in regulatory deliberations. Wiley Interdisciplinary Reviews - Climate Change. Vol 2, Issue 6. WIREs Clim Change 2011, 2:886–901. doi: 10.1002/wcc.140



Watkiss, P. (2011).  Aggregate Economic Measures of Climate Change Damages: Explaining the Differences and Implications. Wiley Interdisciplinary Reviews - Climate Change. Vol 2, Issue 3, start page 356.  Published online. 2 May 2011. DOI: 10.1002/wcc.111



Monetary Valuation of Greenhouse Gases.  Encyclopaedia of Environmental Health.



Watkiss, P and Downing, T (2008). The Social Cost of Carbon: Valuation Estimates and Their Use in UK Policy.  Integrated Assessment Journal.  Vol. 8, Iss. 1 (2008), Pp. 85–105





Air Quality Co-Benefits of Mitigation Policy in Europe – ClimateCost – FP7 RTD

This study assessed the benefits of air quality improvements from mitigation policy in Europe, assessing the physical impacts and economic costs.

Holland, M., Amann, M., Heyes, C., Rafaj, P., Schöpp, W.  Hunt, A., and Watkiss, P. (2011). The Reduction in Air Quality Impacts and Associated Economic Benefits of Mitigation Policy. Summary of Results from the EC RTD ClimateCost Project.  In Watkiss, P (Editor), 2011.  The ClimateCost Project. Final Report. Volume 1: Europe. Published by the Stockholm Environment Institute, Sweden, 2011. ISBN 978-91-86125-35-6.

Available at:



For a summary of the application of the CAFE cost-benefit analysis in Europe , see:

Watkiss, P., Holland, M., Hurley, F., Hunt, A., and Pye, S. (2007).  Assessing the Costs and Benefits of the European Air Pollution Policy (CAFE): Results and Lessons from Experience. p175-199.  In.  Economic Appraisal of Environmental Legislation.  Scottish Environmental Protection Agency (SEPA).  Jean Le Roux, Tshering Sherpa and Evan Williams (Eds). Published by the Stationary Office (TSO). 

Available at www.sepa.org.uk/about_us/what_we_do/regulating.aspx 


Economic Analysis to inform the Air Quality Strategy.  Inter-Department Group on Costs and Benefits – UK Air Quality Strategy

PWA has provided support to IGCB for developing damage costs, as well work undertaking expert support and Monte Carlo analysis for the IGCB Economic Assessment of the UK Air Quality Strategy.

See Annex 3 (Damage Costs) and 7 (Monte Carlo Analysis)

Watkiss and Holland (2007).

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