Guest Post by Willis Eschenbach
In the US, the Environmental Protection Agency (EPA) is imposing the first US rules on CO2. I thought I’d take a look at the EPA’s own estimates of cost and benefit of CO2 regulation, to see if the new rules make sense.
Figure 1. Danger, high costs ahead. Photo Source
There’s two numbers of interest – how much will it cost to reduce CO2 emissions, and how much will the decreased CO2 reduce the temperature?
First, the cost … truth is, no one knows. These things are hard to estimate. I took the EPA figures. They say that the new regulations will cost US$78 billion per year. Considering that’s only a tenth of the size of the recent “Stimulus”, that doesn’t seem like too much. Other analysts have put larger numbers on the cost, but I’ll take the EPA’s low estimate.
And how much will it reduce the temperature?
Again, no one knows … so I’ll take the EPA figures from the same source. They say
Based on the reanalysis the results for projected atmospheric CO2 concentrations are estimated to be reduced by an average of 2.9 ppm (previously 3.0 ppm), global mean temperature is estimated to be reduced by 0.006 to 0.0015 °C by 2100.
Whoa, be still my beating heart. I’ll take their average estimate, 0.00375°C (about four thousandths) of a degree cooling by 2100.
OK, now to run the numbers:
Total Cost = US$78 billion per year times 90 years = US$7 trillion dollars with a “t”, or about half a years GDP for the US.
Total Cooling = 0.00375° C in 90 years
That gets us to where we can make the final calculation …
US$7 trillion divided by 0.00375°C gives us … wait for it …
US$1,900 trillion dollars for each measly degree of cooling.
I’ve heard of air conditioners that were expensive to run, but that’s gotta take the cake, almost two quadrillion dollars running cost per degree of cooling …
The usual explanation is that this is because only the US is involved, and if the rest of the world got with the picture everything would be fine.
However, the cost per degree will not change based on the number of countries involved. It’s still almost two quadrillion ($1,900,000,000,000,000) bucks per degree. So that explanation won’t wash. And although the US economy might be able to take the hit, poorer countries like China and India won’t do well. Finally, those are EPA estimates, the cost may well be higher. Government estimates of the costs of their own programs are notoriously way below what they actually turn out costing.
In any case, my question is, given that the EPA says that cooling costs two quadrillion dollars per degree … how much cooling would you suggest we buy at that price?
Regards to all,
w.
PS – How big is a trillion? Almost unimaginably big. We think a million dollars is big money, and it is. Suppose my family had started a business in the year zero, a couple thousand years ago. Suppose we ran the business like a government, and we lost a million dollars.
To make it more like a government, let’s make my losses a million dollars a day.
Suppose I lost a million dollars a day, every day for the last 2,011 years. Generation after generation of the family, call it three generations per century, reaching down sixty generations. And every one of them, for their entire lives, losing a million dollars a day.
If we had done that, lost a million dollars a day, every single day since Biblical times, not taking a single day off, we still wouldn’t have lost a trillion dollars. We wouldn’t even have reached three-quarters of a trillion dollars.
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That makes carbon credits look like a bargain.
On second thought, at a nickel a ton, we could buy 40 quadrillion tons of carbon credits and save the earth.
Politicians with their snouts in the trough.
That can buy a lot of votes.
Put me down for my 2 cents worth. What we need here are climate philanthropists – surely saving the planet should attract them. Oh right, they are already bankrolling the alarmists to get us to commit economic and the egular kind of suicide.
When is the “scientific community” going to start to heed what the data says?
The data says human emission of carbon does not cause additional warming as shown in the following data:
http://bit.ly/eUXTX2
The above data shows no change in the global warming rate of about 0.15 deg C per decade with increase in human emission of carbon.
Here is the data on the increase in human emission of carbon:
http://1.usa.gov/gIkojx
1) Total human carbon emission until 1910 was about 18 Gton
2) Total human carbon emission until 1970 was about 112 Gton
3) Total human carbon emission for the 30-years period from 1910 to 1940 was about 30 Gton
4) Total human carbon emission for the 30-years period from 1970 to 2000 was about 172 Gton
Note that in the warming period from 1970 to 2000 compared to the period from 1910 to 1940, the human carbon emission increased by 172/30=5.7 times.
Note also that at the start of the second warming period in 1970 compared to the start of the first warming period in 1910, the human carbon emission increased by 112/18=6.2 times.
CONCLUSION
With increase in carbon emission by about 6-times during the most recent warming compared to the previous warming, and with increase in carbon emission by about 6-times at the start of the most recent warming compared to the previous warming, there was no change in the global warming rate. Which invalidates the claim that human carbon emission causes global warming.
Can I buy carbon short on the Chicago oops… European carbon exchange :-)?
/sarc
No thanks. I’ve already got some.
Cooling that is.
Short and to the point.
One suggestion: change it to $1900 trillion per def C of cooling.
Or approximately 1.3 times the U.S. GNP for each year forever. To combat “global warming” we must become slaves to the EPA. I’d much rather combat the EPA.
“Finally, those are EPA estimates, the cost may well be higher.”
Lesseee, when was the last time the government overestimated the costs of a planned implementation and the completed project ended up being much cheaper than they initially thought?
This idea of putting actual numbers on the cost is critical so people can get a sense for what we are talking about. Jo Nova has been making similar points in Australia lately — let’s talk real numbers. This is a key to keeping an eye on the thimble, so to speak.
The kicker is that this is the cost *if* everything the warmists are saying is true. If they are underestimating the costs or the temperature isn’t going to go up as much as feared anyway (both very likely possibilities), then the whole expenditure becomes even more absurd.
But I digress from your question . . . I wouldn’t pay a dime to keep the temperature from rising a degree. I haven’t seen any decent evidence whatsoever to think that an increase of a degree would be a net detriment.
I’ll have to pass this on to fellow Aussies.
Just an observation Willis.
The temperature is the temperature whether today or in the year 2100. But the $$$s is in TODAYS dollars isn’t it?
What is todays dollar worth in relation to the year 1900? What will todays dollar be worth in the year 2100?
Now you see the kind of thinking I discovered during the environmental review process for my proposed power plants. The Endangered Species Act specifically prohibits “cost versus benefits” even being brought into the environmental review process as an argument. If it’s even marginally good for the critters, you gotta’ fork it over regardless of the cost and no matter how minute the benefit..
The EPA received almost unlimited license to go wild when the Supreme Court ruled that CO2 was a harmful gas subject to regulation. Only the Supreme Court or Congress can stop the madness.
I vote for spending $0.
With that much money I would build domes over all major cities in the US and provide air conditioning for the folks in the domes. Might even be able to afford some big sea walls around coastal cities too.
My only caveat would be that those who live in the domes cities would have to stay inside. That way I, and all the others outside of the cities, would finally have peace from their silly bleating.
I think that many of you people who are not true blue Ausies, do not realise how inportant our country is to your future.
The goos Australian government intends to tax and tax and tax the wicked CO2 until the pips squeel and we all give up our evil emitting ways.
Willis may well be right that your small US economy may not be able to do much to save the earth from its doom by your own.
BUT with we mighty Ausies on your side (As our great PM Julia has recently told your Congress) we will,single handedly make all the difference.
Yanks please stand aside.
Australia can alone of all nations save the world from this most dreases pestilance called CO2.
Our controbution will be at least 0.00000000000000000000000000000000000
to the nearest whevers.
And you can beleive me.
IAM NOT A SCIENTIST.
Obama’s golf budget should do it. The Alfred E. Newman Presidency can solve anything.
Edited version:
Willis – if you think that the best efforts of the mighty USA will be quite insignificant, then please think how little difference we few Ausies can make.
But that will not stop us trying.
Putting all logic aside, we are prepared to harm our economy and our people’s wellbeing, in a futile attempt to look significant in our politicians eyes.
Thanks Willis
A brilliant cost/benefit analysis. Send this one to the House, so the Republicans can deregulate these corrupt bankrupting jokers even further.
You could also argue that this number would be even higher, once you link it to the millions in industry and the economy that will be lost once another useless tax is implemented and the US finds its jobs flying overseas.
projected atmospheric CO2 concentrations are estimated to be reduced by an average of 2.9 ppm
Mmmm…
Most CO2 emissions are from natural sources…
Many countries are not reducing CO2 emissions…
Sounds more like:
US$ 1.9 quadrillion dollars for diddly-squat
Stephen Rasey says:
March 13, 2011 at 9:36 pm
Done. Thanks for the suggestion. I also added a description of what a trillion dollars is at the end of the post.
w.
Baa Humbug says:
March 13, 2011 at 9:40 pm
Baa, you’re right, but part of the art of writing is to know what to include and what to leave out. In this kind of “back of the envelope” calculation, I wanted to provide as little for people to dispute as possible. That’s why I used EPA figures, for example. Now, I can discourse all day on discount rates and the net present value of a future income stream and the concept of opportunity cost of money. My last job was Chief Financial Officer for a company with $40 million in sales per year. I’ve kept the books for a variety of different businesses and non-profits.
However, I know that if I talk about that stuff, two things will happen.
1. I’ll lose some readers entirely, and
2. Other readers will dispute my specific choices of values for the opportunity cost and the future inflation and the like.
So I left that question out, it’d just confuse things. All downside and no upside to including it.
w.
Willis,
I am sure that the climatic dynamics which gives the average estimate of 0.00375°C reduction in 90 years is wrong. It is even worse than wrong. But let us keep this figure, as it is fun.
However, the economic/monetary dynamics is wrong too. You cannot multiply the annual amount by number of years. This is not the way to find a cumulative amount in 90 years. You should consider an interest rate, a typical value of which used in assessment of engineering projects or measures is 6%.
So assuming an annual amount A = 78 x 10^9 $ and an interest i = 0.06, the ratio of the final, cumulative amount, F, will be given by (e.g. http://www.ajdesigner.com/phpdiscountfactors/uniform_series_compound_amount_equation.php):
F/A = [(1+i)^n – 1]/i = (1.06^90 – 1)/0.06 = 3141.
So, we should multiply the annual amount by 3141, not by 90. This makes
F = 78 x 10^9 x 3141 = 245 x 10^12 $
And if you divide that with 0.00375°C you find 65.3 x 10^15 $/°C or 65,300 trillion dollars per degree of cooling. So, your 1,900 trillion dollars is a severe underestimate. 🙂
Let’s see, world GDP according to the CIA is about $66 trillion times 90 years is about $6,000 trillion. The $1,900 trillion cost of that degree cooling is about one third the world economy. What a bargain.
Anthony, I believe your mathematics are grossly inaccurate, starting in 2012 at $78 billion P.A. it will increase with an inflation rate of 4.5% to 3,752 trillion P.A. by 2100, this of course excludes any price in (Carbon), the wonders of compound interest.
Total: $84.402 thousand trillion for the 88 years.
I am open to correction on my arithmatic.
“Suppose I lost a million dollars a day, every day for the last 2,011 years. Generation after generation of the family, call it three generations per century, reaching down six thousand generations. And every one of them, for their entire lives losing a million dollars a day.”
Where do you get six thousand generations? I only get sixty. Three per century times 20 centuries = 60
What does one TRILLION dollars look like?
http://www.pagetutor.com/trillion/index.html