The social cost of carbon is about to get an update

The social cost of carbon, a crucial metric that helps shape government regulations on everything from methane emissions regulations to fuel economy standards, is set to be updated by the end of February.

Why it matters: It's expected to be adjusted upwards — which will have ripple effects throughout the federal government and economy at large, making high-polluting activities more expensive and regulations that crack down on emissions economically justifiable.

The big picture: The social cost of carbon is a dollar estimate of the damages caused by emitting one additional metric ton of greenhouse gases into the air.

• It provides policy makers with a way of factoring future climate damage into present-day decision-making.
• The higher the social cost of carbon, the greater the economic benefits associated with cutting carbon emissions.

Flashback: The Trump administration dramatically lowered the social cost of carbon by greatly increasing the discount rate — which measures the value of preventing future damage from climate change relative to the costs of taking action today to avoid such a toll.

• The Trump-era change helped justify policies policies that increased emissions by lowering the estimated harms of carbon.

The latest: On his first day in office, President Biden issued an executive order that revived an interagency working group on the social cost of carbon, and temporarily pegged it at the pre-2017 level, which was $51 per metric ton, according to the White House Office of Management and Budget.

• Many economists view this as too low, considering the climate damages already occurring today in the form of extreme weather and climate events.
• In a paper published this week, prominent economists Joseph Stiglitz and Nicholas Stern argue that such a model-generated figure won't help meet the White House's climate targets, including net-zero emissions by 2050.

• Instead, they argue for a far higher social cost of carbon, tailored to meet the administration's goals.

What's next: Biden's executive order called for an updated social cost of carbon to be put in place by the end of this month. That timetable is now the end of February.

• "This Administration is committed to accounting for the costs of greenhouse gas emissions as accurately as possible, and we remain on track to provide a more complete revision of the estimates on a timeline consistent with what we had outlined to the public in February 2021,” an OMB spokesperson told Axios.

Go deeper: The cost of last year's "relentless" climate and weather disasters