The cost inflicted on the world by carbon pollution could be nearly four times higher than recent estimates, a the study said Thursday (September 1), highlighting how climate action could save this generation and future generations.
The “social cost of carbon” is a way to assess the negative economic, social and health consequences of CO2 emissions, calculated as the difference between the cost of reducing these emissions and the damage avoided by the reductions.
Arrive at a precise cost price per ton of CO2 is vital to the viability of a carbon tax, which is widely seen as one of the simplest ways to fund decarbonization efforts.
In the United States, the figure has for years been part of cost-benefit analyzes for everything from power plant regulations to efficiency standards for cars and appliances.
Lead author Kevin Rennert, of the Washington-based research center Resources for the Future, said the study represented a “comprehensive revision” of the US government’s current carbon cost calculations.
He said the cost had been underestimated in previous methodologies in various ways, but no more so than in the excess mortality caused by carbon pollution and on crop losses.
“The greatest damage from climate change is due to higher mortality rates from rising temperatures and impacts on the agricultural sector,” Rennert told AFP.
Last year, a task force of experts under the Biden administration came with a place holding figure for the social cost of carbon of $51 per metric ton.
But they pointed out that their estimates – which include separate measurements for methane and nitrous oxide – “likely underestimate the societal harm”, suggesting the final figure could be significantly higher.
Write in the journal NatureRennert and his colleagues – climate and economics experts – argued that the $51 figure was nearly four times lower than the true social cost of carbon.
They have created a tool to estimate the true cost of carbon pollution using the latest research on socio-economic projections, climate modelling, climate impact assessments and economic discounting – which determines how much the value of future climate damage is reduced due to expected growth.
They calculated that the company paid a bill of $185 for each metric ton of CO2 issued.
The International Energy Agency said that carbon emissions from the electricity sector alone amounted to some 36.3 billion tonnes in 2021.
Rennert said he hopes the research will inform policymakers when it comes to setting carbon taxes at an appropriate level.
“The social cost of carbon tells you the price of an economically efficient carbon tax valued at an optimal emissions trajectory,” he said.
© Agence France-Presse