# IOOI analysis -based monetization

## Introduction

Upright conducts IOOI (Input, Output, Outcome, Impact) based monetization with the following two-step process:

1. **Impact pathway analysis**: The IOOI (Input, Output, Outcome, Impact) framework is applied to scope relevant *inputs* and *outputs*, and their consequences as *outcomes* and *impacts*.
2. **Monetization**: Impacts are monetized using monetization factors corresponding to the impacts defined in the impact pathway analysis.

## Example (GHG emissions)

We will demonstrate this monetization approach using *harms caused by human-emitted carbon emissions* as an example.

**Figure 1** summarizes forms of carbon emissions along with their consequences using the structure provided by the IOOI framework.

<figure><img src="https://3060305985-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2Fcrk2LeOoszEbPWlkKNws%2Fuploads%2FtrKbv0T6w7hJHM2kd1Wm%2Fimage.png?alt=media&#x26;token=7f08dd16-7d5d-4daf-87e4-5c04cf6059e6" alt=""><figcaption><p>Figure 1: Summary of the IOOI analysis conducted for costs related to <em>GHG emissions</em></p></figcaption></figure>

The monetization factor Upright uses for CO2 equivalent emissions is 417 USD per CO2 tonne, based on [*Ricke, K., Drouet, L., Caldeira, K. et al. Country-level social cost of carbon. Nature Clim Change 8, 895–900 (2018)*](https://doi.org/10.1038/s41558-018-0282-y)*.*&#x20;

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**Background on the cost of carbon figure used by Upright**

Upright has used the cost of 417 USD per CO2 tonne since 2018, when the *Ricke et al.* paper was published.&#x20;

While there has been an abundance of new research published since that, it has not provided a compelling reason to update the figure, as the 417 USD figure falls well into the (published) margins of error of also newer mainstream research, or simply reflects a slight change in assumptions, such as discount rate ([as in this article](https://doi.org/10.1038/s41586-022-05224-9)).

See references below for more information.
{% endhint %}

{% hint style="info" %}
**IOOI outputs vs impacts**

In the IOOI framework, Carbon emissions — as well as several other commonly measured impacts — are considered "outputs" rather than "impacts".

Upright uses IOOI analysis to translate outputs — like emissions — and direct impacts — like Meaning & Joy — to a common class of impacts that can be monetized consistently.
{% endhint %}

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<summary>References</summary>

* *IPCC Sixth Assessment Report*
* *OECD: Effective Carbon Rates 2021*
* *OECD: Cost-Benefit Analysis and the Environment: Further Developments and Policy Use 2018*&#x20;
* *Ricke, K., Drouet, L., Caldeira, K. et al. Country-level social cost of carbon. Nature Clim Change 8, 895–900 (2018)*
* *Carleton, Tamma and Greenstone, Michael, Updating the United States Government's Social Cost of Carbon (November 12, 2021). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2021-04*
* *Robert S. Pindyck, The social cost of carbon revisited, Journal of Environmental Economics and Management, Volume 94, 2019, Pages 140-160, ISSN 0095-0696*
* *Richard S.J. Tol, A social cost of carbon for (almost) every country, Energy Economics, Volume 83, 2019, Pages 555-566, ISSN 0140-9883*
* *Smith, S. and N. Braathen (2015), "Monetary Carbon Values in Policy Appraisal: An Overview of Current Practice and Key Issues", OECD Environment Working Papers, No. 92, OECD Publishing, Paris.*
* *Jarmo S Kikstra et al 2021 Environ. Res. Lett. 16 094037: The social cost of carbon dioxide under climate-economy feedbacks and temperature variability*
* *US: interagency working group (IWG) / Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide*&#x20;
* *Brian C. Prest, Kevin Rennert, Richard G. Newell, and Jordan Wingenroth 2022: Social cost of carbon explorer*
* *Rennert, K., Errickson, F., Prest, B.C. et al. Comprehensive evidence implies a higher social cost of CO2. Nature 610, 687–692 (2022)*

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