A near-term to net zero alternative to the social cost of carbon for setting carbon prices

The social cost of carbon (SCC) is commonly described and used as the optimal CO(2)price. However, the wide range of SCC estimates provides limited practical assistance to policymakers setting specific CO(2)prices. Here we describe an alternate near-term to net zero (NT2NZ) approach, estimating CO(2)prices needed in the near term for consistency with a net-zero CO(2)emissions target. This approach dovetails with the emissions-target-focused approach that frames climate policy discussions around the world, avoids uncertainties in estimates of climate damages and long-term decarbonization costs, offers transparency about sensitivities and enables the consideration of CO(2)prices alongside a portfolio of policies. We estimate illustrative NT2NZ CO(2)prices for the United States; for a 2050 net-zero CO(2)emission target, prices are US$34 to US$64 per metric ton in 2025 and US$77 to US$124 in 2030. These results are most influenced by assumptions about complementary policies and oil prices. Wide-ranging estimates of the social cost of carbon limit its usefulness in setting carbon prices. Near-term to net zero is an alternative modelling approach that focuses on the prices, combined with other policies, needed to set an economy on a pathway consistent with a net-zero emissions target.