The research team’s key finding: Every extra ton of carbon dioxide that cars, power plants and other sources add to the atmosphere costs society $185, more than triple the government’s current figure federal.
The new study calculating the economic cost of climate change – known as the “social cost of carbon” – could renew pressure on President Biden to increase the federal government’s own estimate, a crucial number used by officials to assess the potential costs and benefits of government regulations.
“The bottom line is that our results show that when you fully update the social cost of carbon methodology to the state of the science, it suggests that the existing estimates used by the federal government grossly underestimate the damages,” Kevin said. Rennert, researcher at the Resources for the Future think tank and co-author of the paper.
Learn more about what it all means:
With wildfires burning more ferociously, droughts lasting longer and hurricanes becoming more intense, scientists agree that the monetary cost of climate change will be enormous. The social cost of carbon is an attempt to put a dollar figure on this destruction.
The idea of the metric came to fruition under the administration of President Barack Obama, who at some point agreed on a Cost around $51 per tonne after adjusting for inflation. With nations releasing billions of tons of carbon dioxide into the air every year, the toll adds up pretty quickly.
But many experts thought the Obama-era figure may have underestimated the true costs. In early 2017, the National Academy of Sciences advised a major update to the metric to make the calculation more transparent and scientifically grounded.
Donald Trump became president a week after the NAS report was released, and his administration was quick to disband the Interagency Carbon Pricing Task Force. By excluding climate change damages overseas, the Trump team reduced the estimated cost of each ton of carbon pollution to between $1 and $7 per ton.
After Joe Biden took office, the White House reinstated the task force and told federal agencies to revert to using the Obama-era price of $51 a ton — at least temporarily, promising to update the cost. In May, the Supreme Court allowed Biden lawmakers to continue using that higher interim estimate.
What are the main costs of climate change?
Temperature-related mortality comes at a particularly high cost, according to the 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, with hundreds of Americans losing their lives last summer. Any additional hospitalizations or deaths as temperatures rise is, of course, a tragedy – but it is also a tragedy that economists are able to put a monetary value to.
Another major concern is crop failure. Altered yields of rice, soybeans, corn and wheat as weather patterns change could disrupt global trade and have a far worse economic impact than previously thought, the team says.
In Thursday’s analysis, the researchers also lowered the ‘discount rate’ – a method of measuring future costs and benefits – on the dangers of sea level rise and other effects of climate change. . A lower discount rate implies a higher cost of inaction.
Whatever number is used by policymakers, the idea is to provide them with a measure to account for the ongoing costs and benefits of a regulation or infrastructure project years or decades into the future. Ideally, the calculations offer a valid roadmap of whether implementing certain policies will pay off down the road.
To perform the dizzying set of calculations behind Thursday’s article, the researchers brought together specialists – including climatologists, economists and statisticians – from a dozen institutions to assess the latest scientific findings.
“When we started this project, we knew we would only be successful by bringing together a team of leading researchers in every discipline to contribute their expertise,” said David Anthoff, environmental economist at UC-Berkeley and co-author of the paper. ‘study.
The team pointed out that there was still a wide range of uncertainties in their estimate. And there are plenty of negative impacts they haven’t assessed, including the potential decline of ecosystems, loss of labor productivity, and the outbreak of war.
Is the social cost of carbon controversial?
For more than a decade, many elected officials and academics have debated how to properly quantify the economic costs of greenhouse gas emissions — and how much government should trust those estimates.
At one end of the spectrum are people who completely reject the usefulness of such an approach. When President Biden raised the figure to $51, Sen. John Barrasso (R-Wyo.) called the move a “backdoor carbon tax.”
“Since the president cannot rationalize the crippling costs of his climate policies,” Barrasso said in a statement, “he must exaggerate the benefits.”
This summer, a group of conservative lawmakers on Capitol Hill introduced a bill that would prohibit the federal government from using the social cost of carbon in the rule-making process.
Nick Loris, vice president of public policy for the conservative Coalition for Climate Solutions, or C3 Solutions, raised a more nuanced set of concerns.
“I believe there is a social cost of carbon and that increasing carbon in the atmosphere increases the costs to the economy, our ecology and the planet, and this damage is likely to worsen in the future. if we don’t mitigate emissions,” Loris said. . He also said the team behind Thursday’s paper is thorough and credible.
But the problem, he said, is that even the peer-reviewed academic literature contains a range of different estimates of actual costs, depending on assumptions and methodologies and possibilities for wild swings in policies between jurisdictions. , potentially creating uncertainty among regulated industries.
It’s important to analyze the potential future economic damage posed by global warming and an interesting data point for policymakers and regulators, Loris said. But, he added, “it cannot be relied upon as a singular number to justify regulation or policy action.”
Why is the social cost of carbon important?
Value is a critical input into many federal policies — whether it’s to drill for oil, to increase the energy efficiency of appliances, to keep a power plant burning coal. Setting the cost of carbon high would encourage clean energy projects, deter new coal leases on federal acreage, and influence the type of steel used in taxpayer-funded infrastructure.
“Getting the right number is key,” Tamma Carleton said in an email. Carleton is an assistant professor of economics at the Bren School of Environmental Science and Management at the University of California, Santa Barbara.
“Too low a value means we face excessive climate change risks, but too high a value imposes unjustified emissions mitigation costs on the economy.”
She said Thursday’s paper includes the most recent scientific data and “marks a substantial improvement” over estimates previously developed by the US government.
The Biden administration “remains committed to accounting for the costs of greenhouse gas emissions as accurately as possible,” a spokeswoman for the White House Office of Management and Budget said. But the bureau did not say when it would update the figure.
Even as the Trump administration dramatically reduced the social cost of carbon, Democratic-leaning states pursued their own policies.
At the end of 2020, for example, New York adopted a “carbon orientation value» varying between $79 and $125 that it will apply to future policies and programs. And other states such as Illinois, Colorado, Washington, and Minnesota use the metric for various types of policy analysis or implementation, including in the electricity sector.
The city of Minneapolis also voted to impose a $42-per-ton estimate for climate change costs several years ago, though, as Mayor Jacob Frey told The Washington Post in an interview last year , “carbon does not respect borders”.
Emissions from Phoenix, Baltimore or Texas, he said, impact life in Minneapolis and elsewhere. That’s why a federal standard that takes into account the true costs of climate change is essential, he said.
“It really should be factored into every decision.”