The social cost of carbon (SCC), tries to add up all the monetary value of quantifiable benefits and costs of emitting one additional tonne of CO2. This value can then be used to weigh the benefits of reduced warming against the costs of cutting emissions.
According to OECD, The Social Cost of Carbon is usually estimated as the net present value of climate change impacts over the next 100 years (or longer) of one additional tonne of carbon emitted to the atmosphere today.
Use of Social Cost of Carbon measure
Society at large bears the costs of emitting CO2, whereas those burning fossil fuels accrue benefits from CO2 emission. In order to correct the market failure – for instance, with a carbon tax – we need to know the social cost of those CO2 emissions.