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Uncle Sam’s estimate of the damage caused by each ton of carbon dioxide is fundamentally flawed and “grossly understates” the potential impacts of climate change, according to an analysis released Tuesday by a group of economists.

The study found the true cost of those emissions to be far beyond the $21 per ton derived by the federal government.

The figure, commonly known as the “social cost of carbon,” is used by federal agencies when weighing the costs and benefits of emissions-cutting regulations, such as air conditioner efficiency standards and greenhouse gas emissions limits for light trucks.

A truer value, according to the Economics for Equity and the Environment Network, an organization of economists who advocate for environmental protection, could be as high as $900 per ton – equivalent to adding $9 to each gallon of gas. Viewed another way, with the United States emitting the equivalent of close to 6 million tons of carbon dioxide annually, the higher figure suggests that avoiding those emissions could save the nation $5.3 trillion annually, one-third of the nation’s economic output. ‘Dramatic simplifications’

A second, separate report released Tuesday buttressed the argument, finding that the government routinely underestimates the benefits of avoiding climate change when conducting cost-benefit analysis on regulations aimed at reducing greenhouse gas emissions.

This second report, published jointly by the World Resources Institute, an environmental think tank, and the Environmental Law Institute, found that government models on climate impacts often contain “dramatic simplifications and assumptions” – such as when calculating the social cost of carbon – that underplay the benefits society gains by curbing emissions.

Together, the two reports suggest policy makers are looking at a distorted picture as they assess the economic impacts of climate regulations.