| # Acronym Glossary For Social Cost Of Carbon Proposals | |
| ### Glossary for Social Cost of Carbon Reporting (Alphabetical Order) | |
| This glossary provides key terms, acronyms, and formulas commonly used in the context of social cost of carbon (SCC) reporting and climate economics. | |
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| #### **Carbon Dioxide (CO₂)** | |
| - **Definition**: A greenhouse gas that is a primary driver of global warming. It is emitted through activities such as burning fossil fuels, deforestation, and industrial processes. | |
| - **Units**: Measured in tonnes (metric tons). | |
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| #### **Carbon Dioxide Equivalent (CO₂e)** | |
| - **Definition**: A standard unit for measuring the global warming potential (GWP) of greenhouse gases relative to CO₂. It allows for comparison across different gases by converting them into an equivalent amount of CO₂ based on their GWP. | |
| - **Formula**: | |
| $$ | |
| CO₂e = \text{Mass of Gas} \times \text{GWP of Gas} | |
| $$ | |
| - **Units**: Measured in tonnes or millions of tonnes (MtCO₂e). | |
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| #### **Discount Rate** | |
| - **Definition**: A percentage used to calculate the present value of future costs and benefits. In SCC calculations, it reflects how much weight is placed on future climate damages compared to immediate costs. | |
| - **Formula**: | |
| $$ | |
| PV = \frac{FV}{(1 + r)^t} | |
| $$ | |
| Where: | |
| - $$ PV $$: Present value | |
| - $$ FV $$: Future value | |
| - $$ r $$: Discount rate | |
| - $$ t $$: Time in years | |
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| #### **Global Warming Potential (GWP)** | |
| - **Definition**: A measure of how much heat a greenhouse gas traps in the atmosphere over a specific time period (usually 100 years), relative to CO₂. For example, methane (CH₄) has a GWP of about 25, meaning it is 25 times more potent than CO₂ over the same period. | |
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| #### **Greenhouse Gases (GHGs)** | |
| - **Definition**: Gases that trap heat in the Earth's atmosphere and contribute to global warming. Common GHGs include: | |
| - Carbon dioxide (CO₂) | |
| - Methane (CH₄) | |
| - Nitrous oxide (N₂O) | |
| - Fluorinated gases (e.g., HFCs, PFCs) | |
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| #### **Marginal Abatement Cost (MAC)** | |
| - **Definition**: The cost of reducing one additional unit of greenhouse gas emissions. It is often used in cost-benefit analyses to compare mitigation strategies. | |
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| #### **Millions of Tonnes of Carbon Dioxide Equivalent (MtCO₂e)** | |
| - **Definition**: A unit representing one million metric tons of CO₂ or its equivalent. It is commonly used for large-scale emissions reporting. | |
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| #### **Net Present Value (NPV)** | |
| - **Definition**: The difference between the present value of benefits and costs over time. In SCC reporting, NPV helps evaluate the economic efficiency of climate policies. | |
| - **Formula**: | |
| $$ | |
| NPV = \sum_{t=0}^{T} \frac{B_t - C_t}{(1 + r)^t} | |
| $$ | |
| Where: | |
| - $$ B_t $$: Benefits in year $$ t $$ | |
| - $$ C_t $$: Costs in year $$ t $$ | |
| - $$ r $$: Discount rate | |
| - $$ T $$: Time horizon | |
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| #### **Social Cost of Carbon (SCC)** | |
| - **Definition**: The monetary estimate of the economic damages associated with emitting one additional tonne of CO₂ or its equivalent into the atmosphere. It accounts for impacts such as reduced agricultural productivity, health effects, and property damage from extreme weather. | |
| - **Formula**: | |
| $$ | |
| SCC = \frac{\partial W}{\partial C} \cdot \Delta E | |
| $$ | |
| Where: | |
| - $$ W $$: Economic welfare | |
| - $$ C $$: Consumption | |
| - $$ \Delta E $$: Incremental emissions | |
| - **Units**: Typically expressed as dollars per tonne (\$/tCO₂). | |
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| #### **Tonnes of Carbon Dioxide Equivalent (tCO₂e)** | |
| - **Definition**: A unit measuring the emissions or reductions of greenhouse gases expressed as an equivalent amount of CO₂ based on their global warming potential. | |