Current (2020) UK government guidance on the social value of carbon
Current UK government guidance (DBEIS, 2019b) on what social values to apply in policy appraisal and how to apply them includes central estimates for 2020 of:
- £14/tCO2e (£51/tC) for sectors covered by the EU Emissions trading scheme (ETS) and
- £69/tCO2e (£254/tC) for non-ETS sectors
- Both are set to rise over time to £355/tCO2e (£1303/tC) in 2075-2078 at 2018 prices, thereafter declining.
The guidance is based upon a ‘target consistent’ approach which takes account of the marginal abatement cost required to reach a specified emissions reduction target (DECC, 2009). Values were initially estimated based upon target reductions of 34% compared to 1990 levels by 2020 and 80% by 2050, considered consistent with the UK’s contribution to limiting global temperature increase to 2°C above pre-industrial levels (HM Treasury & DECC, 2012). Recent adoption of a net zero emissions target by 2050 could affect future guidance.
The effect of applying Treasury Green Book (declining) discount rates (Treasury, 2018) is shown in the table below for selected years, illustrating how present values of future benefits in non-ETS sectors (for example; what a tonne of CO2 sequestered by a forest in a future year is estimated to be worth currently) initially declines to 2030, before increasing to a peak in 2052-57, thereafter declining again.
Table: Social Values of carbon (£/tCO 2e at 2018 prices)
Year |
Sectors covered by EU ETS |
Sectors not covered by EU ETS |
||||
Central Price of Carbon |
Discounted Price of Carbon |
Index (2020 Discounted Price =100) |
Central Price of Carbon |
Discounted Price of Carbon |
Index (2020 Discounted Price =100) |
|
2020 |
14 |
14 |
100 |
69 |
69 |
100 |
2030 |
81 |
57 |
414 |
81 |
57 |
83 |
2040 |
156 |
78 |
566 |
156 |
78 |
113 |
2050 |
231 |
82 |
594 |
231 |
82 |
119 |
2060 |
307 |
81 |
588 |
307 |
81 |
118 |
2070 |
348 |
69 |
495 |
348 |
69 |
99 |
2080 |
353 |
52 |
374 |
353 |
52 |
75 |
2090 |
338 |
37 |
266 |
338 |
37 |
53 |
2100 |
309 |
26 |
186 |
309 |
26 |
37 |
The impact of tighter targets
Were tighter targets to be adopted (e.g. due to: accelerating global emissions; more severe than anticipated impacts; greater likelihood of catastrophic impacts; or a desire for greater certainty that critical thresholds will not be exceeded), the estimates of the social value of carbon would need to be revised upwards.
Downloads

Forests and carbon: valuation, discounting and risk management (PDF, 760.9kB) Reviewing methods to value carbon over time, examining approaches for dealing with risk and considering approaches that could be used in extending standards to forestry more generally in voluntary carbon markets in the UK.
The EU Emissions Trading System: Opportunities for Forests (PDF, 119.4kB) Brief research summary including background, objectives, methods, findings and recommendations.