The Uneven Price of Pollution: How Global Attitudes Impact the Social Cost of Carbon

Nico Varela in Climate & Environment December 2025 • 4 min read.

"New research reveals a stark divide in how the world values climate action, challenging current approaches to environmental policy."

The social cost of carbon (SCC) is a critical metric used to estimate the economic damages resulting from each ton of carbon dioxide emitted into the atmosphere. It's a figure that guides policy decisions, informs regulations, and shapes international agreements aimed at mitigating climate change. However, the SCC isn't just a number; it's a reflection of our values, priorities, and beliefs about the future.

Traditionally, SCC estimates have been heavily influenced by data and perspectives from North America and Western Europe. This raises a fundamental question: Does a carbon price shaped by Western values fairly represent the global community, especially when the impacts of climate change are felt differently across various regions? New research is challenging this established norm, revealing significant disparities in how different cultures perceive the urgency and importance of climate action.

This article explores the groundbreaking findings of a recent study that recalibrates the social cost of carbon using data from 76 countries, capturing a broader range of attitudes towards time, risk, and economic development. The results expose a striking divide, highlighting the ethical and practical implications of using a one-size-fits-all approach to global climate policy.

Why Your Location Matters: Unveiling the Geographical Bias in Climate Economics

Fractured world map symbolizing differing attitudes to climate change.

Imagine trying to set a global price on pollution when people in different parts of the world have vastly different ideas about its impact. That's the challenge at the heart of the social cost of carbon. Traditionally, the experts calculating this cost have been primarily based in North America and Western Europe. While these researchers bring expertise and sophisticated models, their perspectives may not fully capture the values and priorities of the entire world.

A new study digs into this issue by analyzing how people in 76 countries view the future and how much risk they're willing to accept. What they found is that these views vary significantly across the globe, and these differences have a big impact on how we should price carbon emissions.

The "Western" Standard: Most existing estimates rely on economic models calibrated with data from North America and Europe. This means the assumptions about how much we value future benefits versus current costs are based on Western preferences.
Global Disparities: The study reveals that people in different countries have significantly different attitudes toward time and risk, which directly affects their perception of the social cost of carbon.
The Ethical Question: Is it fair to impose a carbon price based on one set of values onto the entire world, especially when the consequences of climate change are unevenly distributed?

The implications are clear: A social cost of carbon derived primarily from Western perspectives may not accurately reflect the values and priorities of the global community. This can lead to policies that are perceived as unfair or ineffective, particularly in developing nations where economic growth and immediate needs may take precedence over long-term climate considerations.

Moving Towards a Fairer Climate Policy

The path forward requires a more inclusive and representative approach to calculating the social cost of carbon. By incorporating a wider range of values and priorities, we can create climate policies that are not only effective but also perceived as fair and equitable across the globe. This means listening to diverse voices, considering regional differences, and recognizing that the fight against climate change is a shared responsibility that demands a truly global perspective.

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This article is based on research published under:

DOI-LINK: https://doi.org/10.48550/arXiv.2404.04989,

Title: Towards A Representative Social Cost Of Carbon

Subject: econ.gn q-fin.ec

Authors: Jinchi Dong, Richard S. J. Tol, Fangzhi Wang

Published: 07-04-2024

Everything You Need To Know

What is the social cost of carbon (SCC) and why is it important?

The social cost of carbon (SCC) is a crucial metric representing the economic damages expected from each ton of carbon dioxide emitted. It serves as a basis for informing policy decisions, shaping regulations, and guiding international agreements focused on mitigating climate change. The SCC helps quantify the costs of climate change, enabling policymakers to make informed decisions about carbon pricing, emission reduction targets, and other climate-related policies. Without an accurate SCC, climate policies may be ineffective or perceived as unfair, particularly when the impacts of climate change are felt differently across various regions.

How do cultural values impact the calculation of the social cost of carbon?

Cultural values significantly influence the calculation of the social cost of carbon (SCC). The study reveals that different cultures and economic realities dramatically impact the perceived SCC. Traditional SCC estimates have been heavily influenced by data and perspectives from North America and Western Europe. However, the study recalibrates the SCC using data from 76 countries, capturing a broader range of attitudes towards time, risk, and economic development. It highlights how attitudes toward risk, time, and economic development, which vary greatly across the globe, directly affect the perception of the SCC. This means that the price placed on carbon emissions could vary widely depending on the cultural values used to calculate it.

Why is the geographical bias in current climate economics a concern?

The geographical bias in current climate economics is concerning because the social cost of carbon (SCC) is traditionally calculated using data primarily from North America and Western Europe. This means that the assumptions about how much we value future benefits versus current costs are based on Western preferences. This approach may not accurately reflect the values and priorities of the global community. The consequences of climate change are not evenly distributed, and using a one-size-fits-all approach can lead to policies perceived as unfair or ineffective, especially in developing nations where economic growth and immediate needs are prioritized. The ethical question is whether it is fair to impose a carbon price based on one set of values onto the entire world.

How can we move toward a fairer and more effective global climate policy?

Moving toward a fairer and more effective global climate policy requires a more inclusive and representative approach to calculating the social cost of carbon (SCC). This involves incorporating a wider range of values and priorities from different cultures and regions. It means listening to diverse voices and considering regional differences in attitudes toward time, risk, and economic development. By doing so, we can create climate policies that are not only effective in mitigating climate change but also perceived as fair and equitable across the globe. This approach recognizes that the fight against climate change is a shared responsibility that demands a truly global perspective.

What are the implications of using a social cost of carbon (SCC) derived primarily from Western perspectives?

Using a social cost of carbon (SCC) derived primarily from Western perspectives has several implications. It may not accurately reflect the values and priorities of the global community, leading to policies that are perceived as unfair or ineffective. This is particularly true in developing nations, where economic growth and immediate needs may take precedence over long-term climate considerations. The study shows that the assumptions about how much we value future benefits versus current costs are based on Western preferences. This can result in a misrepresentation of the global community's willingness to invest in climate action and can hinder the development and implementation of effective global climate strategies. It could lead to policies that are not universally adopted or supported, undermining global efforts to combat climate change.