Detailed Explanation:

Answer: Option 1 — Long-term damage done by a tonne of CO2 emissions in a given year.

The Social Cost of Carbon (SCC) is an economic metric that estimates the long-term economic damage caused by emitting one additional tonne of carbon dioxide in a given year. It encompasses various climate-related damages such as impacts on human health, agricultural productivity, property damage from extreme weather events, and ecosystem services. This measure is used by policymakers to assess the economic benefits of reducing CO₂ emissions and to inform cost-benefit analyses of climate policies.

📝 Short Notes: Social Cost of Carbon (SCC)

• Definition: The Social Cost of Carbon represents the monetary value of the total damage caused by emitting one additional tonne of CO₂ in a particular year, measured over the lifetime of that emission.
• Components: Includes damages from sea-level rise, agricultural losses, human health impacts, property damage from increased extreme weather events, and ecosystem disruption.
• Time Horizon: Typically calculated over 100-300 years, as CO₂ remains in the atmosphere for centuries.
• Discount Rate: Uses economic discount rates to convert future damages into present-day monetary values, with rates typically ranging from 2.5% to 5%.
• Policy Application: Used by governments (especially in the US and EU) for regulatory impact assessments, carbon pricing mechanisms, and evaluating climate mitigation projects.
• Variability: SCC estimates vary widely (from $10 to over $400 per tonne of CO₂) depending on assumptions about climate sensitivity, economic models, and discount rates used.