The research team’s key finding: Each tonne of carbon dioxide added to the atmosphere by cars, power plants, and other sources costs society $185. That’s more than three times his current figure for the federal government.
A new study calculating the economic losses of climate change (known as the ‘social cost of carbon’) is a key figure used by officials when assessing the potential costs and benefits of government regulation. It could put renewed pressure on President Biden to raise the federal government’s own estimates.
“In short, our results, fully updating the social cost of carbon methodology to the state of science, suggest that existing estimates used by the federal government grossly underestimate the harm. It means that they are,” Kevin said. Lennart is a research fellow and co-author of the paper at the think tank Resources for the Future.
Here are more details on what this means:
As wildfires burn harder, droughts last longer and hurricanes get more intense, scientists agree that the financial costs of climate change will be enormous. The public cost is an attempt to put a price on its destruction.
The idea for this indicator came to fruition during President Barack Obama’s administration, and at one point the inflation-adjusted cost settled at about $51 per tonne. With countries releasing billions of tons of carbon dioxide into the atmosphere each year, the burden is quickly mounting.
But many experts wondered if the Obama-era figures underestimated the real costs. In early 2017, the National Academy of Sciences (NAS) recommended a major update to metrics to make calculations more transparent and scientifically sound.
Donald Trump took office a week after the release of the NAS report, and his administration wasted little time disbanding an interagency working group on carbon pricing. By excluding climate change damage abroad, Trump’s team reduced the estimated cost of carbon pollution from $1 to $7 per tonne.
After Joe Biden takes office, the White House resumes working groups, tells federal agencies to return to using the Obama-era price of $51 per tonne, and promises to update costs, at least temporarily. In May, the Supreme Court allowed Biden’s attorneys to continue using that higher interim estimate.
What are the big costs of climate change?
Temperature-related mortality elicits particularly high costs, according to a research group led by experts from Resources for the Future and the University of California, Berkeley.
In the United States, extreme heat is the deadliest form of weather disaster, killing hundreds of Americans last summer. But it is also what economists can assign a dollar value to.
Another major concern is crop failure. According to the team, changes in rice, soybean, corn and wheat yields as weather patterns change could disrupt global trade and have far worse economic impacts than previously thought.
In Thursday’s analysis, researchers also lowered the “discount rate,” a way of measuring future costs and benefits for the risk of rising sea levels and other climate change impacts. A lower discount rate means a higher cost of inaction.
Whatever numbers policymakers use, the idea is to provide a metric for aggregating ongoing costs and benefits of regulatory or infrastructure projects years or decades ahead. Ideally, the computation provides a worthwhile road map of whether implementing a particular policy will pay off in the future.
To perform the dizzying series of calculations behind Thursday’s paper, researchers brought together experts, including climate scientists, economists and statisticians from a dozen institutions to evaluate the latest science. rice field.
“When we started this project, we knew that it would only be successful if we brought together a team of leading researchers in their respective fields to contribute their expertise,” said UC Berkeley environmental economist, Another study co-author, David Anthoff, said:
The team stressed that there are still wide-ranging uncertainties in their estimates. There are many influences.
Is the social cost of carbon debatable?
For over a decade, many elected officials and academics have debated how to adequately quantify the economic costs of greenhouse gas emissions, and how much governments should rely on such estimates. .
At one end of the spectrum are those who outright reject the usefulness of such an approach. He called the move a “back door carbon tax.”
“The president cannot justify the devastating costs of climate policy, so the benefits need to be exaggerated,” Barrasso said in a statement.
This summer, a group of conservative lawmakers on the Capitol introduced a bill that would ban the federal government from using the social cost of carbon in its rulemaking process.
Nick Loris, vice president of public policy at the Conservative Coalition for Climate Solutions (C3 Solutions), raised a more nuanced set of concerns.
“Carbon has a social cost, and I believe that increasing atmospheric carbon will increase costs to the economy and to our ecosystems and the planet. could get worse in the future,” Loris said. He also said the team behind Thursday’s paper was rigorous and credible.
The problem, however, is that even the peer-reviewed academic literature contains varying estimates of the true costs, depending on assumptions and methodologies, and the potential for wide policy variability between management risks. , brings uncertainty to the regulated industry.
Loris says it’s important to analyze the potential future economic damage wrought by a warming planet and the data points that will be valuable to policymakers and regulators. But “it cannot be relied upon as a singular number to justify regulation or policy measures,” he added.
Why is the social cost of carbon important?
This value is a key input in many federal policy decisions. Whether it will drill for oil, whether it will make appliances more energy efficient, whether it will allow power plants to keep burning coal, and so on. Setting the cost of carbon higher encourages clean energy projects, discourages new coal leases on federal land, and limits the types of steel used in taxpayer-funded infrastructure. Make an impact.
“It’s important to get the numbers right,” Tama Carlton said in an email. Carlton is an assistant professor of economics at the Bren School of Environmental Science and Management at the University of California, Santa Barbara.
“Too low means we face undue climate change risks, but too high means the economy is being charged an unjustifiable cost of reducing emissions.”
She said Thursday’s paper contained the latest science and “demonstrates a significant improvement” over estimates previously made by the US government.
A White House Office of Management and Budget spokeswoman said the Biden administration “remains committed to accounting for the cost of greenhouse gas emissions as accurately as possible.” However, the office has not clarified when it will update the figures.
Democrat-leaning states have pushed their own policies, even as the Trump administration has slashed the social cost of carbon.
For example, in late 2020, New York will adopt “Carbon Emissions Guidance” ranging from $79 to $125 to apply to future policies and programs. Also, other states such as Illinois, Colorado, Washington, and Minnesota use the metric for various types of policy analysis or implementation involving the power sector.
The city of Minneapolis also passed a climate change cost estimate of $42 a ton years ago, but as Mayor Jacob Frey told The Washington Post in an interview last year, “Carbon respects borders. I won’t.”
Emissions from Phoenix, Baltimore or Texas will affect life in Minneapolis and elsewhere, he said. That’s why federal standards that consider the true costs of climate change are essential, he said.
“It really should be built into every decision.”
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