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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The figures that Willis mentions come from a Senate report (SR). He doesn’t seem to have checked the references in it. SR appears to draw the $78Billion cost from a legal brief filed by the Chamber of Commerce. However, the legal brief isn’t available at the Chamber’s website. Did the EPA actually give such a figure? To what did it apply? Let’s have a reference to an EPA document, so that we can know.
The temperature change of “0.006 to 0.0015 °C” is a misquote from page 4-101 of http://www.epa.gov/oms/climate/regulations/420r10012a.pdf. The full context is this:
“With regard to the light duty motor vehicle rule, EPA’s analysis determined that the rule would reduce GHG emissions over the lifetime of MY2012-2016 passenger cars and light trucks in the amount of 962.0 million metric tons of CO2 equivalent. RIA Table 5-3. Based on these reductions, EPA modeled the anticipated potential effect on climate change and found that in year 2100, the rule would reduce temperature increases by 0.006-0.015 degrees Celsius…” One can see that the EPA estimate is for the temperature of regulating light vehicles between 2012 and 2016. The correct average of the range is 0.0105 °C, not 0.00375 °C.
We don’t know what the $78B figure applies to; it is certainly not the cost of regulating light vehicles for five years. Dividing $78B by 0.00375 °C (or even 0.0105 °C) makes no sense.
It is unwise to quote partisan Senate reports and not check the references.
Please note “temperature of regulating ” in my previous post should read “temperature effect of regulating “
Excellent post, I hope the news media sees the numbers.
What if one were to take the same numbers and, instead of throwing 78 billion/year away to achieve basically nothing, devoted the same mount to tax credits for US companies who manufacture products which are actually energy efficient and set the bar very high.
Would we see point of use hot water heaters, washer/dryers and dishwashers that actually generate the power they need — only generate when in us? My guess is yes and it would deliver an exportable US product that was manufactured at a discount in the US thus eliminating unnecessary transportation costs.
We are never likely to see anything of merit coming from government until they decide to stop the tax and spend and embrace an insightful approach. Sadly, they don’t have an insight.
Probability of an intelligent approach is nearly zero until government gets out of the solutions business and stops the unnecessary taxation.
Is that why we guaranteed a half a billion dollar loan to a solar energy panel company that can not turn a profit? It’s almost as bad as FNM and FRE.
ShrNfr says:
March 14, 2011 at 8:43 am
Is that why we guaranteed a half a billion dollar loan to a solar energy panel company that can not turn a profit? It’s almost as bad as FNM and FRE.
=======
No, its actually worse then this — that was just “doll”.
Yes, FNM and FRE should be Nationalized, broken up, assets sold, and anything left dumped into the FHA for disposition. Any benefit should pay down the national debt.
When one sees amendments to a national health care bill that include lifting a ban on wooden arrow manufacture, one understands just how screwed up the situation is. The tragic loons can’t even pass a solid piece of budget that gets us back on track without once again turning the exercise into partisan foolishness.
The American people are completely fed up with this nonsense and will vote again in 2 years.
sorry “doll” = “dole” in my last post though both are equally useless in a real sense.
$1900 trillion per 1 degree C. (That’s more than 100 times the current GDP of the US.)
More proof that our government is run by morons.
And by the way, given the cold and snow we had this winter I wouldn’t give you a nickel to make it colder. Now if you could make it warmer we might have something to talk about.
‘US$1,900 trillion dollars for each measly degree of cooling.’
These people are absolutely INSANE!
@Rob Starkey (March 14, 2011 at 7:56 am) —
Unfortunately, I haven’t time to look more deeply at this, which seems an excellent topic.
But one thing which is apparent is that the existing coal plants have a finite lifetime, and would need to be replaced in any case. Although I haven’t read Hansen’s paper, that might account for the 2030 sunsetting date. The main point is that the cost side of the analysis should show the incremental cost of building an alternative (read nuclear) plant vs. a coal plant.
I haven’t looked at the “benefit” side (reduction of pCO2), but the calculation approach seems correct. There’s some danger in a blanket assumption that natural absorption of additional CO2 remains at 50% [the 50% figure comes from the IPCC carbon cycle estimates], but I think that’s preferable to making assumptions which probably not provable about how the carbon cycle might change over time.
I’ve never understood the reason behind ‘combating’ climate change. Surely we should be ‘adapting’ to climate change.
The first is impossible – the second can happen naturally (if we let it) but easily if we embrace it.
Far easier, cheaper, productive, beneficial….. etc
Cold Canada should find a way to sue!
The Hobbs End Martian says:
That kind of money would allow us to totally eliminate hunger and all disease, create a world where every single person is valued and tutored, make the human race a space faring society and a welcome member of the Galactic Council.
More likely the Solar Federation, with Father Brown and his Great Computers in charge.
According to the EPA if we just follow their advice we will all be rich and live forever.
Sounds like a bargain to me, but I always was a sucker for a good sales pitch!
I’ll go ahead and buy a degree of cooling… Will you take a check?
“And how much will it reduce the temperature?”
Perhaps we should all wait and see what is happening without any expenditure. The GISS number for February just came out at 0.44. See http://data.giss.nasa.gov/gistemp/tabledata/GLB.Ts+dSST.txt
Continuing at this rate, 2011 will only come in at 11th warmest, even according to GISS.
Listen to Sen. Rand Paul skewer Kathleen Hogan, “US deputy assistant secretary for energy efficiency” about government “busybodies”:
JohnWho says:
March 14, 2011 at 6:13 am
No, they’re saying it will reduce the CO2 by 3 ppmv over the next 90 years.
w.
Quinn the Eskimo says:
March 14, 2011 at 6:35 am
That’s not all that clear, Quinn. Could you cut to the chase and tell us how much a degree will cost us?
Thanks,
w.
JeffT says:
March 14, 2011 at 8:14 am
I’m easy, pick the numbers you like and let us know the cost per degree using your figures.
w.
JeffT says:
March 14, 2011 at 8:14 am
… It is unwise to quote partisan Senate reports and not check the references.
And it does limited good to check the references in congress. The health care bill has hundreds of references, Many of them refer to another reference, and a few of those to yet another. (attorney paradice)
Quinn, can you splain your poast please?
I’m having trouble answering you question. After going through Dr. Miskolczi’s work thoroughly, I now realize that such question is abstract complete. If temperature can not change at all due to components of this atmosphere then you would have to divide by zero. But, by approaching this problem as a limit as delta T approaches zero, the answer to your question would converge on infinity…
so, $∞(infinite) per degree.
Smoking Frog says:
March 14, 2011 at 3:55 am
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 arithmetic.
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.
YOU GOT ME on the arithmetic, too many zero’s, it was ONLY 81.657 trillion
however I love your optimism on the inflation rate for the future, in the 60 years from 1913-1973 the U.S. CPI went from 9.8 to 42.6 (434% increase) this period included the two greatest wars in history that left the US untouched and the greatest depression which didn’t, however in the last 38 years it progressed to 220.2 (517% for 38 years). With the current lunatic rate of spending there is no way that 3% is achievable in the future.
Australian de facto P.M. Bob Brown stated last year that a carbon tax should be linked to the CPI PLUS 4%. We will all meet in the poorhouse.
old44 said however I love your optimism on the inflation rate for the future, in the 60 years from 1913-1973 the U.S. CPI went from 9.8 to 42.6 (434% increase) this period included the two greatest wars in history that left the US untouched and the greatest depression which didn’t, however in the last 38 years it progressed to 220.2 (517% for 38 years). With the current lunatic rate of spending there is no way that 3% is achievable in the future.
I’m not optimistic for the near and medium term, but you were talking about 2100. For that length of time, I’m neither optimistic nor pessimistic. The only thing I really have is history.
It’s true that average inflation over the past 38 years was 4-point-something percent, but this doesn’t mean that it just wobbled a little around that rate. For example, split the period into halves:
1971-1990 : 6.4%/year
1990-2009 : 2.6%/year
(I used the Westegg Inflation Calculator, which only goes to 2009.)