Over the past decade, if you took one long-haul flight annually, the global community would eventually incur a cost of approximately $25,000. Although this expense won’t appear on your credit card, its impact manifests in various ways—perhaps through reduced rice yields in hotter fields, intensified hurricanes, or factories shutting down on excessively hot days. This estimation stems from a Nature study published in March 2026 by Stanford and the University of California, Berkeley researchers. They developed a novel approach to associate specific emissions damage with distinct locations and time periods.
The $25,000 estimate is grounded in the social cost of carbon, which quantifies the financial damage caused by emitting one ton of carbon dioxide into the atmosphere. While this concept might seem abstract, it holds significant sway in American policy, influencing decisions on fuel-economy regulations and permits for pipelines and power plants. Throughout the last four presidential administrations, this number has fluctuated, reflecting changes in how much the nation is prepared to tackle climate change based on current carbon cost perceptions.
The authors of the Nature study liken the cost of carbon to a garbage bill. Just as someone collects, transports, and disposes of your trash for a fee, carbon dioxide has to be managed, albeit without an immediate invoice. Instead, it’s akin to a credit card charge that future generations will eventually settle.
As carbon dioxide lingers in the atmosphere for centuries, it gradually heats the planet, damages crops, intensifies storms, and burdens economies. Ultimately, someone bears the cost, and the social cost of carbon seeks to quantify this burden.
This cost is derived by integrating climate science with economics. Researchers assess how an additional ton of CO₂ influences global temperatures over the next century or two, then estimate how these temperature shifts impact human health, agricultural yields, labor productivity, property, and economic growth. The resultant losses are expressed in today’s dollars.
Two technical considerations fuel most disagreements over the final figure:
- Global versus domestic damages. Should the U.S. account for damages occurring in countries like India, Brazil, or Bangladesh due to American emissions? Since carbon disperses uniformly in the atmosphere, the economic rationale for global accounting is strong, while the political argument for domestic-only accounting is that the U.S. government serves Americans.
- The discount rate. This complex factor involves economists “discounting” future damages to present-day values. A higher discount rate minimizes future harm’s present cost, whereas a lower one inflates it. At a 7% discount rate, $1 trillion in climate damage in 2100 equates to about $4 billion today. At 3%, the same damage is valued at approximately $86 billion. Identical science, identical damage, but a twentyfold difference in present value.
This second choice—balancing your own savings against future generations’ losses—turns climate economics into a moral issue.
2008: A Court Forces the Issue
Federal agencies largely ignored carbon pricing in the modern regulatory era until the Center for Biological Diversity sued the Bush administration for inadequate fuel-economy standards for light trucks and SUVs. In 2008, the Ninth Circuit Court of Appeals deemed assigning zero value to carbon emissions in cost-benefit analyses “arbitrary and capricious,” asserting: “the value of carbon emissions reduction is certainly not zero.”
This ruling imposed a legal obligation: to craft rules that withstand court scrutiny, federal agencies must price carbon. However, they initially lacked a consensus on how to do so.
2009–2016: The Obama Administration Sets the Framework
In 2009, President Obama established an Interagency Working Group of federal economists and scientists. By 2010, the group released its first official social cost of carbon estimate: $21 per ton of COâ‚‚.
As climate models evolved, this estimate increased, reaching about $50 per ton (2020 dollars) by the end of Obama’s tenure. This figure was based on a 3% discount rate and global damages.
This framework, incorporating interagency processes and peer-reviewed models with a global perspective, informed more than 65 federal rules and 81 subrules between 2008 and 2016. It influenced appliance efficiency standards, power plant emission limits, fuel-economy requirements, and methane leak regulations from oil and gas infrastructures. Stricter rules were justified by a higher social cost of carbon, while a lower cost did not.
2017–2020: The First Trump Administration Rewrites the Math
Shortly after assuming office, President Trump issued Executive Order 13783, dismantling the Interagency Working Group and retracting its estimates. The Trump EPA recalculated the social cost of carbon by accounting for only U.S. damages and increasing the discount rate to 3%-7%. Consequently, Obama’s $52 per ton estimate plummeted to between $1 and $7 per ton.
As Resources for the Future noted, this lower figure was “too low to make climate policies economically justifiable.” The cost-benefit analysis that had supported stringent emissions rules under Obama no longer held. The Clean Power Plan, central to Obama’s climate policy, was repealed partly because the recalculated climate benefits no longer outweighed the costs. Scientific American reported that this change in the social cost of carbon was “determinative” in reversing at least six petroleum-sector regulations during Trump’s first term, effectively providing emitters with an easy exit.
2021–2024: Biden Restores, Then Raises, The Price Sharply
Biden reinstated the working group, setting an interim social cost of carbon value of approximately $51 per ton, adjusted for inflation. Legal challenges from some states were dismissed.
In November 2023, the EPA established a new central estimate for the social cost of carbon: $190 per ton for 2020 emissions, with projections rising to $230 by 2030 and $308 by 2050. This increase was driven by updated climate science, new economic models, a reduced 2% discount rate, and two decades of scientific advancements elucidating warming’s effects on economic growth, climate-related mortality, and previously underestimated risks.
Other countries took notice. Canada adopted the updated EPA figure in 2023, and Germany adapted the underlying model for its analyses in 2024.
2025: The Second Trump Administration Tries to Erase It
On January 20, 2025, President Trump signed Executive Order 14154, “Unleashing American Energy,” which disbanded the Interagency Working Group, retracted its estimates, and directed the EPA to consider removing the social cost of carbon from federal permitting and regulatory decisions entirely. The order criticized the metric for being “marked by logical deficiencies, a poor basis in empirical science, politicization, and lacking legislative foundation.”
In March 2025, EPA Administrator Lee Zeldin announced plans to “overhaul” the social cost of carbon. By May 2025, an executive memorandum instructed federal agencies to exclude climate-related economic damage from their regulations and permitting decisions unless legally required.
In cases where agencies must assign a value, the administration settled on an interim estimate of as low as $1 per ton of CO₂, reverting to the first Trump administration’s methodology with domestic-only damages and higher discount rates. The social cost of methane plummeted from $1,470 per ton to $58. By July 2025, White House guidance further directed agencies to limit required analysis to “the minimum consideration required to meet a statutory requirement” and, where feasible, avoid monetizing it altogether. The practical result: $1 per ton on paper, $0 in most decisions.
The cycle has now undergone its third complete reversal since 2008. Each change in the number alters the federal government’s readiness to regulate emissions.
The new study in Nature achieves what federal estimates have struggled with: it distinguishes past damage from future damage and attributes both to specific emitters. Their framework treats every ton of CO₂ as an asset yielding negative returns; it’s a garbage bill that continually accrues interest. Using this approach, they uncovered three insights that redefine the discussion.
A ton of CO₂ emitted in 1990 has already inflicted approximately $180 in global damages by 2020. That same ton will cause an additional $1,840 in damages by 2100—ten times more. Employing the authors’ conservative assumptions, which incorporate a 2% discount rate with damages capped at 2100, the social cost of carbon for a ton emitted today is roughly $1,013. This is over five times the Biden EPA’s $190 estimate, with higher estimates feasible under extended timeframes or lower discount rates.
Paying off the climate damage already incurred would cover only a small portion of the damage yet to come from the same emissions. Past payments don’t eliminate past debts.
Individuals and Corporations Run Up the Carbon Bill
The study also quantifies the impact of everyday choices.
- One additional long-haul flight each year for a decade incurs about $25,000 in future discounted damages by 2100.
- Adopting a vegetarian diet for a decade saves approximately $6,000 in future damages.
- Installing and using a heat pump for ten years results in an extra $6,000 in avoided damage.
- Reducing driving by 10% cuts another $6,000 in future costs.
On a corporate scale, the figures are staggering. Emissions from Saudi Aramco’s fossil fuel production between 1988 and 2015 are projected to cause $64 trillion in cumulative discounted damages through 2100. ExxonMobil’s share is comparable at $29 trillion. These amounts surpass the GDPs of many nations.
The social cost of carbon may appear as a mere number in regulatory documents, but it represents a bridge between the present world and the one future generations will inherit.
When the federal government opts for a low social cost of carbon, or none at all, it crafts regulations that permit more emissions. Increased emissions lead to a hotter atmosphere, translating to stronger storms, prolonged fire seasons, reduced crop yields, elevated air conditioning costs, and more days when outdoor work becomes hazardous. These consequences don’t materialize as a single event in 2100.
They unfold gradually, starting now, accumulating as flood and wildfire damage, biodiversity loss, and even defense spending to curb immigration. The Nature researchers caution that their estimates likely underestimate the true costs, as GDP damage models fail to capture biodiversity loss, cultural homeland destruction, mental health impacts, and slow-moving effects like sea level rise.
Conversely, when the federal government employs a high social cost of carbon, it enacts regulations to curb emissions. These regulations entail costs today, affecting workers in fossil fuel industries, consumers adjusting to new standards, and companies retooling their operations. The social cost of carbon doesn’t negate these costs; it weighs them against costs that would otherwise be borne by others, in different locations, at different times. This weighing represents a choice about who counts.
The history outlined here is, in essence, a record of that choice, and none of these decisions are definitive. Courts have consistently ruled that federal agencies cannot disregard the value of carbon-emissions reductions as zero. The 2008 ruling that established this framework remains in effect. Regardless of the current administration’s actions, the legal requirement to incorporate climate damages in cost-benefit analysis persists, and the science supporting newer, higher estimates continues to strengthen.
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