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If someone was tallying up all the benefits of energy efficiency programs, you'd want them to include reducing climate pollution, right? That's just common sense.

Thankfully, that's what our government does when it designs energy efficiency programs-as well as other policies that impact greenhouse gas emissions. And just this month, this approach got an important seal of approval: For the first time, a federal court upheld using the social cost of carbon to inform vital protections against the harmful impacts of climate change.

So what is the social cost of carbon and why does it matter? It's a crucial part of the development of climate safeguards and essential to our understanding of the full costs of climate pollution. We know that climate change is a clear and present danger now and for future generations-one that will result in enormous costs to our economy, human health and the environment. And yet, these social†costs are not accounted for in our markets, and therefore in decision making. It is a classic Economics 101 market failure. Every ton of carbon dioxide pollution that is emitted when we burn fossil fuels to light our homes or drive our cars has a cost associated with it, a hidden one that is additional to what we pay on our utility bills or at the gas pump. These costs affect us all and future generations and are a result of the negative impacts of climate change. If we don't recognize these hidden costs-we aren't properly protecting ourselves against the dangers of climate pollution.

The social cost of carbon (or SCC) is an estimate of the total economic harm associated with emitting one additional ton of carbon dioxide pollution into the atmosphere. To reach the current estimate, several federal agencies came together to determine the range and central price point roughly $40 per ton through a transparent and rigorous interagency process that was based on the latest peer-reviewed science and economics available, and which allowed for repeated public comments.

In Win for Environment, Court Recognizes Social Cost of Carbon
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It's critical that we protect against the damages and costs caused by climate pollution. So it's a no-brainer that when considering the costs and benefits of climate safeguards, we must take into account all benefits and costs and that means including the social cost of carbon.

In their court opinion, the Federal Court of Appeals for the Seventh Circuit agreed wholehear...