This approach and the values it recommends have subsequently been superseded following a review during 2008 and early 2009.
In December 2007, the approach to carbon valuation adopted the use of the Shadow Price of Carbon (SPC) as the basis for incorporating carbon emissions in cost-benefit analysis and impact assessments. However, it takes more account of uncertainty, and is based on a stabilisation trajectory.
The SPC is based on estimates of the lifetime damage costs associated with greenhouse gas emissions, known as the Social Cost of Carbon (SCC).
The Social Cost of Carbon and the Shadow Price of Carbon: what they are, and how to use them in economic appraisal in the UK examines the difference between the two methodologies and explains the rationale for adopting SPC values.
Peer reviews
Peer reviews by leading academic experts commenting on an earlier draft of the paper were submitted. These and the response by DECC economists are available here:
Copyright for these peer reviews resides with the authors.