Search Climate Insights Directory

This research paper by the Stockholm Environment Institute uses the Climate and Regional Economics of Development (CRED) model to analyze the gap between current climate-economic policy recommendations and the emission reductions required to limit global warming to 2°C. The authors argue that conventional models, such as DICE, often underestimate climate damages and ignore international equity and the needs of future generations. By incorporating updated science, lower discount rates, and cross-regional investments from rich to poor countries, the CRED Optimal scenario demonstrates that it is possible to achieve a high probability of staying below 2°C while simultaneously reducing global income inequality.

This report by the Stockholm Environment Institute evaluates the current state of climate economics, arguing that economic modeling has lagged behind climate science. The authors advocate for a precautionary, standards-based approach to policy—such as maintaining a 2°C warming limit—rather than relying on traditional cost-benefit frameworks that often underestimate catastrophic risks and the importance of future generations.

This report by the Stockholm Environment Institute critiques the UK Department for Environment, Food and Rural Affairs (DEFRA) for its 2007 approach to setting the shadow price of carbon (SPC). The authors argue that DEFRA's methodology is fundamentally flawed because it bases the carbon price on an assumed optimistic future stabilization trajectory rather than current emissions trends, resulting in a price that is too low to incentivize necessary abatement.

This white paper by the Stockholm Environment Institute critiques the U.S. government's use of the 'social cost of carbon' (SCC) to guide climate regulations. The authors argue that the administration's 'central' estimate of $21 per ton of CO2 is dangerously low due to a reliance on flawed economic models, inappropriately high discount rates, and the omission of catastrophic climate risks. They advocate for a shift toward science-based targets and cost-effectiveness analysis rather than narrow cost-benefit calculations.