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The social costs of hydrofluorocarbons and the benefits from their expedited phase-down

Nature Climate Change volume 14, pages 55–60 (2024)Cite this article

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Abstract

Hydrofluorocarbons are a potent greenhouse gas, yet there remains a lack of quantitative estimates of their social cost. The present study addresses this gap by directly calculating the social cost of hydrofluorocarbons (SC-HFCs) using perturbations of exogenous inputs to integrated assessment models. We first develop a set of direct estimates of the SC-HFCs using methods currently adopted by the United States Government and then derive updated estimates that incorporate recent advances in climate science and economics. We compare our estimates with commonly used social cost approximations based on global warming potentials to show that the latter is a poor proxy for direct calculation of hydrofluorocarbon emissions impacts using integrated assessment models. Applying our SC-HFCs to the Kigali Amendment, a global agreement to phase down HFCs, we estimate that it provides US$202037 trillion in climate benefits over its lifetime. Expediting the phase-down could increase the estimated climate benefits to US$202041 trillion.

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Fig. 1: Differences in estimating the SC-HFCs.
Fig. 2: The SC-HFCs.
Fig. 3: Global surface temperature anomaly from one tonne of HFC gas.
Fig. 4: The total climate benefits from phase-down of HFCs.

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Data availability

Complete data for this study are freely available via Zenodo: https://zenodo.org/records/10081241 ref. 59.

Code availability

Complete replication code for this study is freely available via Zenodo: https://zenodo.org/records/10081241 ref. 59.

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Acknowledgements

The views expressed in this paper are those of the author(s) and do not necessarily represent those of the US Environmental Protection Agency (EPA), and no official agency endorsement should be inferred. We thank F. Errickson, D. Anthoff, A. Marten, E. Kopits, C. Griffiths and D. Smith for their helpful feedback and interesting conversations.

Author information

Authors and Affiliations

  1. National Bureau of Economic Research, Cambridge, MA, USA

    Tammy Tan

  2. Energy and Resources Group, University of California, Berkeley, CA, USA

    Lisa Rennels

  3. Office of Policy, National Center for Environmental Economics, US EPA, Washington, DC, USA

    Bryan Parthum

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  1. Tammy Tan
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Contributions

T.T. and B.P. developed the study idea and the application and implemented the modifications into the three MimiIWG integrated assessment models (DICE/FUND/PAGE). B.P. and L.R. developed and implemented the modifications to the MimiGIVE integrated assessment model. B.P. estimated the integrated assessment models. B.P. and L.R. developed the replication code and data. T.T., L.R. and B.P. contributed equally to evaluating the results and writing the paper.

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Correspondence to Bryan Parthum.

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Nature Climate Change thanks Jiacan Yuan and the other, anonymous, reviewer(s) for their contribution to the peer review of this work.

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Extended data

Extended Data Fig. 1 The Social Cost of Hydrofluorocarbons by IAM.

The direct estimates developed in this study are noticeably different under the USG approach (MimiIWG) compared to the updated GIVE model (MimiGIVE). The mean SC-HFCs (lines) from each of the underlying IAMs, along with their 5th to 95th percentile ranges (shaded ribbons), are shown, representing the distribution of estimated SC-HFC values over the 10,000 Monte Carlo simulations. The SC-HFCs from MimiIWG adopt a 3% constant discount rate, the USG’s central value, while MimiGIVE adopts a calibrated Ramsey-like framework with a near-term target discount rate of 2%, the central value in Ref. 27.

Extended Data Fig. 2 The Social Cost of Hydrofluorocarbons with MimiIWG-FaIR Pairing.

The estimates using the paired approach (MimiIWG-FaIR) differ from those using the USG approach (MimiIWG), although their relationship differs noticeably by gas. The mean SC-HFCs (lines) from each underlying approach, along with their 5th to 95th percentile ranges (shaded ribbons), are shown, representing the distribution of estimated SC-HFC values over the 10,000 Monte Carlo simulations. The SC-HFCs from MimiIWG and MimiIWG-FaIR adopt a 3% constant discount rate, the USG’s central value, while MimiGIVE adopts a calibrated Ramsey-like framework with a near-term target discount rate of 2%, the central value in Ref. 27.

Extended Data Fig. 3 Additional radiative forcing from 1 tonne pulse of hydrofluorocarbons in 2030.

Paths of additional radiative forcing for under MimiIWG are the result of the one-box model. The paths shown for MimiGIVE includes the mean (solid line) and the 5th to 95th percentile ranges (shaded ribbons) across 10,000 Monte Carlo Simulations that account for uncertainty underlying its simple climate model (FaIRv1.6.2). The x-axis of this plot spans the years 2025-2300 for a pulse of emissions in 2030.

Extended Data Fig. 4 The ratio of SC-HFC to global warming potential estimation.

Direct estimation of the social cost of greenhouse gases pairs time-dependent growth, total forcing, climate warming, damages, and discounting, allowing for more integrated estimates of the SC-HFCs. The ratio of GWP-based estimates to directly estimated SC-HFCs is estimated as \({ratio}={SC}C{O}_{2}{\rm{\times }}{GW}{P}^{{HFC}}/{SC}{HFC}\) and varies by HFC species and direct estimation methodology—underscoring the importance of the direct estimation of social costs and the suite of improvements contained within our modified MimiGIVE.

Extended Data Fig. 5 Kigali Amendment Hydrofluorocarbon Phasedown Schedule.

The Kigali Amendment defines different phasedown schedules for each of the four Article 5 groupings. Article 5 Group 1 countries have their baseline HFC production/consumption levels calculated from 2020-2022 averages and are required to reduce production/consumption starting in 2029, reaching 20% of baseline levels by 2045. Article 5 Group 2 countries have their baselines calculated from 2024-2026 averages and are expected to decrease production/consumption by 85% by 2047, starting reductions in 2028. Non-Article 5 parties have their baseline levels calculated from 2011-2013 averages and must reduce production/consumption by 85% by 2036. Reductions start in 2019 for Non-Article 5 Group 1 and 2020 for Non-Article 5 Group 2.

Extended Data Fig. 6 Hydrofluorocarbon emissions projections under various scenarios from Ref. 23.

HFC emissions were projected out to 2100 as per the methodology described in Ref. 23. Three scenarios are presented: emissions under a baseline, “business-as-usual” scenario, emissions under full compliance with the Kigali Amendment phasedown schedule and emissions under a maximum technologically feasible reduction schedule.

Extended Data Table 1 The Social Cost of Hydrofluorocarbons
Full size table
Extended Data Table 2 The total climate benefits from phasedown of hydrofluorocarbons
Full size table

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Tan, T., Rennels, L. & Parthum, B. The social costs of hydrofluorocarbons and the benefits from their expedited phase-down. Nat. Clim. Chang. 14, 55–60 (2024). https://doi.org/10.1038/s41558-023-01898-9

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