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.
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
Considering that CO2 has NO effect on climate you Americans should stop the EPA in its tracks.
old44 said: 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.
I think you should mean Willis, not Anthony, but correct me if I’m wrong. Anyway, your arithmetic is wrong.
P.A. in 2100 = 1.045^88 = 48.01; (78 billion)(48.01) = 3.7518 trillion
88-year sum = (78 billion)(1.045^88-1)/(0.045) = 81.657 trillion
Those are roughly 1/1000 of your figures. Besides, the average rate of inflation over the 20th century was 3%, so it’s not clear why you’re assuming 4.5% for the 21st century.
Now even labor in the US has seen the fallacy of CO2 Taxes
http://online.wsj.com/article/SB10001424052748704076804576180384094409812.html?mod=WSJEurope_hps_MIDDLE_Video_Top
Gary Mount said: If you go back 6000 generations, thats 2 ^6000 ancestors (assuming perfect pairing, for genetic diversity 😉 ) My calculator throws out this number, 1.5e+1806 as the number of ancestors, or, if you like, the percent of blood one has from one of the year zero ancestors is 6.6e-1807. These are very large, and very small numbers, which obviously aren’t real world numbers.
They’re not only not real world. They’re illogical. Any given ancestor may be your ancestor in more than one way, and any given ancestor, except a very near ancestor, is the ancestor of other people living today as well.
If you divide the accumulated debt, even if it reached 1 Quatloo Quadrilion, by the total number of descendants, well you get a small number.
That contradicts your argument that the population shrinks over time.
40 shades said: “Could I suggest that you calculate how long the catastrophe would be delayed rather than the reduction in temperature. ”
The annual increase in CO2 is currently about 2 ppm/year, so this is about a year and a half’s worth. Of course, we probably *should* use the rate of 2100, however we have no real idea about what this would be; projections over this sort of time span are merely wild guesses.
Alexander Harvey’s observation of a mis-quote in the Senate document seems to be correct. It would be very unusual for the EPA/NHTSA to write “0.006 to 0.0015” — that is, giving the smaller figure first. Using the correct range [0.006 to .015 ], the average is .0105, so the figure you compute for dollars per degree, while remaining huge, is reduced to approximately a third of what’s currently there.
During transitional phases from one level of magnitude to the next it can be helpful to the lesser informed to emphasize the previous magnitude. For example in computing, we are currently transitioning (in everyday use) from Gigabyte to Terabyte size drives. Someone who is familiar with 80 GB and 250 GB drives scratches their head over 2 TB. I explain that it’s just moving up to the next comma: it’s easy dude, 80 gig, 250 gig, 2,000 gig. The danger is that moving to the next prefix of magnitude actually minimizes the impact of this thousand unit step.
Needless to say, this can be an expensive step in federal budgeting. I dare say that if we just dutifully make the verbal switch from billion to trillion then we may be cutting our own throats by increasing the citizens numbness to large numbers. To use a metaphor, regarding the citizens ability to fight the infection of socialist over-spending, by seamlessly transitioning to the next prefix we are whacking the body politics’ immune system.
I had a space junkie relative tell me: “NASA only spends 10 or 15 billion a year”. I quickly said: “That’s 10 thousand million to 15 thousand million EACH year!”, and it helps to hit the right words to make the point (see Cheers episode with Johnny Carson).
Today, it is utterly painless for a talking head to say: ‘Last year in 1010 the deficit was 1.294 Trillion’. Although that is accurate we can be far more descriptive: ‘The deficit for JUST last year in 2010, the red ink overcharge on your kids credit card was almost ONE THOUSAND THREE HUNDRED BILLION dollars’. I believe that the proper use of language will help stir up the natives which is the only way that this disaster will be stopped. [References: FY 2010: In – Out]
This can be applied to what Willis has calculated above …
Willis uses $78 billion which I think is way low because the UN would like a steady wealth re-distributing contribution of $100 billion each year (no source, just from reading a lot). So my favorite argument is just to simplify and say this:
😉
Someone needs to explain the concept of “significant digits” to EPA. The fact that a calculator will display the numbers does not imply significance.
Also, EPA ignores the fact that significant funds would be required to be invested in new facilities and equipment which do not emit carbon. That investment, in the US alone, would be on the order of $30 trillion. The investors would likely insist on a return of ~10%, or $3 trillion per year once all of the investment was in place.
That investment would all be for several “naughts” to the right of the decimal point, unless the rest of the notions on the globe invested their ~$120 trillion in zero-carbon facilities and equipment; and, perhaps even then.
I am having a hard time getting the image of the Chinese “digging a hole” with power equipment, while the rest of the world tries to fill the hole with teaspoons. Too bad I can’t draw.
Because this is a political agenda, tax payers should have the choice to fund carbon reduction, be it carbon dioxide, bioxide, singleoxide, or any other lifestyle form carbon comes in, just like we are given the choice to fund campaigns through a $3.00 tax donation. Whatever the greenies are willing to fund through their taxes, let it be so. Their generosity can help put scrubbers on cows and whoever else wants one. Our guvmnt can buy credits from foreign countries who are wanting to sell, waiting to sell, and willing to sell themselves and their prosperity. Or the whitehouse could replace all its lightfixtures with curly bulbs. But leave the rest of us alone. Stay out of my house and its lightfixtures, my business, and my gas tank.
My first gut reaction is to point out that doubling nuclear power would reduce carbon emissions by many times the feeble capacity of the beloved favorites of the green coalition, wind and solar.
Recent events in Japan will make tis practical solution unpallatable for many. My second thouught is to replcae the 40% of oil usage for gasoline with the recently developable 250 year supply of natural gas. That would reduce carbon emissions by 20%, cut the imported oil trade imbalance by $350 billion (the trade deficit with China is 40% of this) and cut imports in half.
Either of these would reduce carbon emissions by many times the possibity of wind or solar at a small fraction of the cost and would supply power at affoordable rates and most of the time less cost than current technology.
We have the resources to be 100% enrgy independent. We have the technolgy and choice of fuels to reduce carbon emissions and pollution by huge amounts at affordable cost. What we lack are politicians that can understand this or that can wean themselves away from the political support of special interests proposing unworkable and unaffordable “solutions”
The added bonus of either of these technlogies is that real pollution would be greatly reduced rather than the immeasurabl amount that wind or solar could possibly obtain.
I apologize for my two-fingered typos and laziness in proof reading.
Some time ago I saw some calculations to show what just a BILLION looks like (never mind a trillion). It went like this, as far as I recall…
A billion seconds ago it was 1959.
A billion hours ago, Christ was on earth.
A billion days ago, no animal walked upright…
This does emphasize the point that at the end of the day, it doesn’t matter who’s right on the science because economic solutions are completely untenable.
You have to see it from the govenments point of view.
If the temperature drops a bit relative to forecast (that could always be figured out) , then it works and all is good.
If the temperature still rises, then it is because we have not done enough, and even harder regulations must be put in effect.
So no matter reality, it is a win win situation for the government.
Politicians have nevered cared very much for reality anyway. It’s disturbing the political process with all those facts.
Between March 11, 2010 and March 11, 2011 global average temperature as measured by the satellites dropped 0.83 deg C and now hovers only 0.09 deg C above the coldest average temperature ever recorded on that date by the satellites (see http://discover.itsc.uah.edu/amsutemps/ and select “14,000 feet”). I believe we’ve just wiped out 100 years worth of “manmade global warming” without having lifted a finger (come to think of it, I think I WILL “lift a finger”). According to Willis’ straightforward, cost-versus-benefits, that decline is worth about a gazillion dollars. I say we credit our accounts with that windfall, declare the federal budget balanced and let the carbon fly! Economics is easy when you apply “new math”.
Somebody help me –
“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.”
Isn’t the current rate of CO2 increase per year just under 3 ppm? Is the EPA saying that taking the measures they endorse, the USA itself will effectively negate the entire planets CO2 yearly increase?
Otherwise, I do not believe that Warmists here in the US want anyone to see how little the excessive EPA measures will effect “saving the world”.
AusieDan
Yep Australia will bankrupt itself, but it has nothing to do with climate, Julia just needs the money, after all she already paid out a large ransom to buy her independents and then spent another 400 to 500 million to buy one independent vote – she needs this moolah so bad and it won’t be spent on carbon dioxide mitigation, it will be spent on buying enough votes to get re-elected in her own right (left).
Messers Windsor and Oakeshott should wake up the game is on and they won’t be re-elected when they go to the polls with Julia. A sucker is born every minute!
Good post Willis, hope the USA rises up in anger at the deceit and blatent waste.
This has a couple of errors that render the premise and central proposition unsupported.
1. As pointed out above, the actual estimated range of temperature change from the vehicle regulations is .006 to .015, not .0015. See 75 Federal Register 25495.
2. The $68 billion figure in the cited document is not attributable to the vehicle rule. Instead, it is the avoided costs saved by what EPA calls the “regulatory relief” of the Tailoring Rule, which applies to stationary sources in contrast to the vehicle rule which applies to light duty vehicles. (This is a bit of newspeak – a new regulation of GHG’s from stationary sources which will cost billions is called “regulatory relief”).
3. In the final Tailoring Rule, the avoided costs from”Regulatory Relief” are claimed to be $70 billion. See 75 Federal Register 31598.
In light of the foregoing, the premise and central proposition are incorrect.
Where’s an economist to give us the opportunity cost of the EPA expenditure, for example what is the net job loss/creation of spending the money on climate change combat rather than other desirable programmes, such as better education or physical infrastrcture? I have seen references to a British report that claims one job created in “sustainable” energy means 3.7 jobs lost in the rest of the economy.
Thanks for showing the absurdity of this whole affair.
The undeniable fact of carbon credits is that the funds will do nothing more than enrich governments in the same way that gasoline taxes do. Gas taxes do not reduce consumption except for the poor, limiting the ability of the unskilled to travel independently for more lucrative work or education. Carbon taxes will further limit the mobility of the unskilled as well as their ability to feed, warm and house themselves without government programs.
“Total Cost = US$78 billion per year times 90 years = US$7 trillion dollars.”
Slow down Willis. You need to use a discount rate to get the present value. However, I think it’s a moot point anyway, because their figures are way too low.
Everyone is missing the point:
The EPA is a bureaucracy.
Any bureaucracy needs reasons to justify their existence, but much more important to justify its growth.
Over time, bureaucracies always create their own teams of highly paid super-bureaucrats, who spend most of their time dreaming up growth strategies and new ways of avoiding budgetary or political control.
Willis’ example is just another classic example of a bureaucracy that needs to be culled, especially in its upper echelon fat cat levels.
If you give governments a dollar, you may get back – if you’re lucky – around 70 cents in value. Give the EPA a dollar and you’ll likely get back less than one cent.
Please check my number[s] of a cost benefit analysis.
A recent NASA-GISS paper in Env. Sci. Tech., co-authored by James E. Hansen calls for the shutting down of all coal-fired power plants in the USA by 2030, in order to avoid the global warming caused by the emitted CO2.
http://pubs.giss.nasa.gov/docs/2010/2010_Kharecha_etal.pdf
What effect would this specific actionable step actually have on global warming?
The paper tells us that 1,994 billion kWh/year were generated from coal in 2009 and that the average CO2 emission is 1,000 tons CO2 per GWh generated.
So by 2030 Hansen’s plan would reduce CO2 emissions by roughly 2 GtCO2 per year.
Roughly half of this “stays” in the atmosphere (with the rest disappearing into the ocean, the biosphere or outer space) so the annual reduction after 2030 will be around 1 GtCO2/year and over the period from today to year 2100 the cumulative reduction would be 80.5 GtCO2.
The mass of the atmosphere is 5,140,000 Gt.
So the net reduction in atmospheric CO2 would be around 16 ppm(mass) or 10 ppmv.
If we assume (as IPCC does) that by year 2100 the atmospheric CO2 level (without Hansen’s plan) will be around 600 ppmv (“scenario B1”), this means that with Hansen’s plan it will be 590 ppmv.
Today we have 390 ppmv.
Using IPCC’s 2xCO2 climate sensitivity of 3.2C we have:
Case 1 – no Hansen plan
600 ppmv CO2
ln(600/390) = 0.431
ln(2) = 0.693
dT (warming from today to 2100) = 3.2 * 0.431 / 0.693 = 1.99
Case 2 – Hansen plan implemented
590 ppmv CO2
ln(590/390) = 0.414
ln(2) = 0.693
dT (warming from today to 2100) = 3.2 * 0.414 / 0.693 = 1.91C
So Hansen’s plan will result in a total reduction of global temperature by year 2100 of 0.08C.
But what will this non-measurable reduction of global temperature cost?
The total, all-in capital cost investment to replace 1,994 billion kWh/year capacity with the least expensive alternate (current nuclear fission technology) is between $4,000 and $8,000 per installed kW (say $6,000 on average). [Note: If we replace it with wind or solar, it will cost several times this amount per generated kWh, due in part to the low on-line factor.]
1,994 billion kWh/year at a 90% on-line factor represents an installed capacity of:
1994 / 8760 * .9 = 0.251 billion kWh
This equals an investment cost of 0.251 * 6,000 = $1.5 trillion
Globally some 6,700 billion kWh/year are generated from coal (around 3.4 times as much as in the USA).
So shutting down all the world’s coal-fired plants by 2030 would cost $5 trillion and result in 0.27C reduced warming by year 2100.
Out here in CA our leaders seem to be aware that our efforts to reduce the states carbon dioxide footprint may not do much of anything-
“California emits only one percent of the world’s greenhouse gases. In fact, in the United States all 300 million Americans today can stop driving, get on bicycles, turn off their lights and in the long run it would not make much difference because ten times that many people around the world are just getting off of bicycles,and into cars and into homes and flipping on the lights.”
David Crane, Special Assistant to Governor Schwarzenegger
Speaking at AB 32 Forum sponsored by the San Mateo County Economic Development Association, May 2008
“California acting alone cannot reduce emissions sufficiently to change the course of climate change worldwide.”
California Air Resources Board
Updated Economic Analysis of California’s Climate Change Scoping Plan, March 24, 2010 Page ES-3
http://www.arb.ca.gov/cc/scopingplan/economics-sp/updated-analysis/updated_sp_analysis