The ‘social cost’ of carbon dioxide emissions may not be $37, as previously estimated by a recent US government study, but $220. From the Stanford School of Engineering
The economic damage caused by a ton of CO2 emissions-often referred to as the “social cost of carbon-could actually be six times higher than the value that the United States uses to guide current energy regulations, and possibly future mitigation policies, Stanford scientists say.
A recent U.S. government study concluded, based on the results of three widely used economic impact models, that an additional ton of CO2 emitted in 2015 would cause US$37 worth of economic damages. These damages are expected to take various forms, including decreased agricultural yields and harm to human health related to climate change.
But according to a new study, published online this week in the journal Nature Climate Change, the actual cost could be much higher. “We estimate that the social cost of carbon is not $37, as previously estimated, but $220,” said study coauthor Frances Moore, a PhD candidate in the Emmett Interdisciplinary Program in Environment and Resources in Stanford’s School of Earth Sciences.
Based on the findings, countries may want to increase their efforts to curb greenhouse gas emissions, said study coauthor Delavane Diaz, a PhD candidate in the Department of Management Science and Engineering. “If the social cost of carbon is higher, many more mitigation measures will pass a cost-benefit analysis,” Diaz said. “Because carbon emissions are so harmful to society, even costly means of reducing emissions would be worthwhile.”
For their study, Moore and Diaz modified a well-known model for calculating the economic impacts of climate change, known as an integrated assessment model, or IAM. Their alternative formulation incorporated recent empirical findings suggesting that climate change could substantially slow economic growth rates, particularly in poor countries.
IAMs are important policy tools. Because they include both the costs and benefits of reducing emissions, they can inform governments about the optimal level of investment in emission reduction. The U.S. Environmental Protection Agency, for example, uses the $37 average value from three IAMs to evaluate greenhouse gas regulations. Canada, Mexico, the United Kingdom, France, Germany and Norway have also used IAMs to analyze climate and energy policy proposals.
While useful, IAMs have to make numerous simplifying assumptions. One limitation, for example, is that they fail to account for how the damages associated with climate change might persist through time. “For 20 years now, the models have assumed that climate change can’t affect the basic growth-rate of the economy,” Moore said. “But a number of new studies suggest this may not be true. If climate change affects not only a country’s economic output, but also its growth, then that has a permanent effect that accumulates over time, leading to a much higher social cost of carbon.”
In the new study, Moore and Diaz took a widely used IAM, called the Dynamic Integrated Climate-Economy (DICE) model, and modified it in three ways: they allowed climate change to affect the growth rate of the economy; they accounted for adaptation to climate change; and they divided the model into two regions to represent high- and low-income countries.
“There have been many studies that suggest rich and poor countries will fare very differently when dealing with future climate change effects, and we wanted to explore that,” Diaz said.
One major finding of the new study is that the damages associated with reductions in economic growth rates justify very rapid and very early mitigation that is sufficient to limit the rise of global temperature to two degrees Celsius above pre-industrial levels. This is the target that some experts say is necessary to avert the worst effects of global warming.
“This effect is not included in the standard IAMs,” Moore said, “so until now it’s been very difficult to justify aggressive and potentially expensive mitigation measures because the damages just aren’t large enough.”
The pair’s IAM also shows that developing countries may suffer the most from climate change effects. “If poor countries become less vulnerable to climate change as they become richer, then delaying some emissions reductions until they are more fully developed may in fact be the best policy,” Diaz said. “Our model shows that this is a major uncertainty in mitigation policy, and one not explored much in previous work.”
The pair notes two important caveats to their work, however. First, the DICE model’s representation of mitigation is limited. It doesn’t take into account, for example, the fact that low-carbon technologies take time to develop and deploy.
Secondly, while it explores the effects of temperature on economic growth, the model does not factor in the potential for mitigation efforts to also impact growth.
“For these two reasons, the rapid, near-term mitigation level found in our study may not necessarily be economically optimal”, Diaz said. “But this does not change the overall result that if temperature affects economic growth-rates, society could face much larger climate damages than previously thought, and this would justify more stringent mitigation policy.”
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All of this only means something in a warming world. If the world is not warming it ia a total waste of physical and human resources. And guess what? The world is not warming. It has not warmed for 18 years. The only recent true warming was the short-lived super El Nino of 1998 which had absolutely nothing to do with atmospheric carbon dioxide these guys are talking about. And prior to the arrival of the super El Nino there was yet another eighteen year period of no-warming in the eighties and nineties that the global warming gang is hiding by showing a fake warming in its place. Fortunately they still don’t control the satellites and you can see this no-warming period in satellite data sets. ENSO was also active in the eighties and nineties and created five El Nino peaks there. To determine global mean temperature in the presence of ENSO draw a line from rhe tip of an El Nino peak to the bottom of the adjacent valley and mark its center point. Doing that for the eighties and nineties you find that the dots line up as a horizontal straight line, 18 years long, the same as the current hiatus is. These two hiatuses together give us 35 years of no-warming, This is over two-thirds of the time since 1988 when IPCC was first organized. They have done all tyey can to suppress any knowledge of hiatuses during their existence They are plenty worried about the current hiatus and have written over 50 peer reviewed articles in an attempt to get rid of it. It gets comical when they start looking for the lost heat in the ocean bottom. They have not succeeded so far and they have not even acknowledged that there is another hiarus hiding in the eighties and nineties. To see it clearly look at figure 15 in my book “What Warming?”
There of reason why you should not implement mitigation policies even if we assume that catastrophic global warming is a very real possibility and the revised social cost of carbon is correct.
1. They recognize climate change will retard economic growth (with little evidence of this actually happening) but do not recognize the effects of policy on economic growth.
2. Assumptions about the effectiveness of policy have been shown by experience to be wrong.
3. There have been a huge number of policy failures, and there are no proper procedures to stop useless and harmful policies being implemented in the future.
3. Not all major emitters are introducing emissions reduction policies. The emerging economies (China, India, Brazil, Indonesia, etc. etc.) are not doing anything to reduce emissions. These countries alone will soon be producing enough emissions to exceed the 2 degree threshold.
Factor in these elements and future generations will be poorer due to policy, and will still have most of the harms of climate change in the future.
http://manicbeancounter.com/2014/02/23/why-climate-change-mitigation-policies-will-always-fail/
But in economics, you need to look at the assumptions.
First is the discount rate. I do not know what it is. Mainstream climate economists use 3%. Use 1% or 0.1% like Stern did and the long-term costs are magnified.
Second is adaptation. Like the high-cost estimates of the past, this paper assumes people do not adapt very well. It depends on the context. If warming throws the climate into chaos, then people cannot adapt – but this is highly speculative. If it is sea levels rising by 3-30mm a year, then slow, and low-cost, adaptation is feasible. If is slow changes to climate (like becoming drier & warmer) then changes to crops and water supplies are possible.
If a person is of a “progressive mindset”, then your #3, “Assumptions about the effectiveness of policy have been shown by experience to be wrong”, only means that in the next policy cycle, more resources and tighter controls must be allocated.
With Progressives there is fundamentally no Limiting Principle, ever. For example, If 30% of a nation’s GDP doesn’t solve poverty, then in the next policy cycle try 35%. Of course when 35% of GDP still doesn’t “solve” poverty, it was because it should have been 40% of GDP. The cycle continues until the economic conditions bring about the entire societal collapse. It will be the same for climate change whereby they have declared that CO2 is the climate control knob, thus by simply turning the dial they can fix the “climate.” All it takes is assigning a value to the increments on the knob, extracting that value from the economy to re-distribute, and thus Viola!, climate change solved.
Of course when it doesn’t it only meant they assigned too low a value to the CO2, and so they continue.
No limiting Principle… ever, for Progressives and their watermelon friends.
manic, correction, your #2 reason.
Mr. McGuire: I want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Models.
Benjamin: Exactly how do you mean?
Mr. McGuire: There’s a great future in models. Think about it. Will you think about it?
I had to play “Mrs. Robinson” after reading that, followed it up with “So Long FLW” and “America”.
Another idiotic scientist basing claims based on AGW theory which has been busted not only by the climatic data for the past 18 years but even more importantly by the atmospheric processes AGW theory stated would occur due to this theory.
Most notable is the lower tropospheric hot spot and more El Nino or El Nino like patterns which has not occurred , not to mention the other wrong call for a more zonal atmospheric circulation which has not occurred.
They then try to cover themselves by saying the lack of Arctic Sea Ice due to global warming is the explanation for the more meridional atmospheric circulation(opposite of what they called for originally) which is more BS and one can prove this by looking at the atmospheric circulation versus Arctic Sea Ice values in the 1970’s.
Not to mention the fact that while Arctic Sea Ice has declined Antarctic Sea Ice has risen even faster resulting in overall global Sea Ice being above normal. Their great wrong theory said both poles would exhibit Sea Ice loss due to AGW theory.
.
Every where you look, there are Grubers.
And goobers too.
Nothing will slow economic development of poor countries more than lack of reliable, inexpensive energy.
A computer model of this sort is nothing more, and I mean nothing, than the assumptions baked-in early. There is no physics involved at all.
“Social Cost.”
Talk about a meaningless, made-up, impossible to weight “statistic.” It’s like trying to asses the true value of “pain and personal suffering” like they end up with in lawsuits.
Never under esteem the ‘value’ of the impossible to weight “statistic to those looking to work in an area that requires no real ‘proof’ to actual base your claims on.
Doesn’t really matter.
Saudi holding oil production high, and price per barrel diving to $30 for a decade if not longer the “social cost” arguments are moot.
Saudi just became the IPCC killer; Tesla Motors will burn through cash and be bankrupt before the next year and GM wont be a buyer as it ditches it’s own electric car plans. ’15 will be tough year for Musk.
Haha not.
How many of the 10,000+ US PhD theses annually, get so much publicity so easily over so much nonsense?
“If the social cost of carbon is higher, many more mitigation measures will pass a cost-benefit analysis,” Diaz said.
And there you have it. Re-submit all those business cases because now they’re viable. Yeah right.
Let ISIS and Al- Queda win the we get instant 14th century-that low carbon enough for you Klowns?
Translation:
We are PHD candidates looking for a career. We have created a model(GIGO) to do just that, ensure adequate funding for our lifetimes. At everyone else’s expense. I wonder who is paying for their education, if it is us taxpayers, I want my money back. If it is their parents, I can only hope someone explains to them what their children are planning to do to them in the near future, and all the money they struggled to make to send them to school was apparently wasted.
Sorry, but as soon as I hit “could” in the first sentence, I realized I had better things to do, like watch the white Gorbull warming falling.
“so until now it’s been very difficult to justify aggressive and potentially expensive mitigation measures because the damages just aren’t large enough.” This says it all, the study’s purpose was to find a justification for the mitigation measures the “progressives” wish to impose on us, is it any surprise that they found that justification using a computer model as flawed as the climate models used by the IPCC?
What’s the social cost of undermining public confidence in science by using fake science to promote a political agenda?
Oh my goodness!!! There are a lot of ifs, buts, coulds, woulds, maybes and models in here. I think they have assumptions up the ying yang, and their models are based on other models that failed to predict a pause.
“Social” cost of carbon.
Hmmm….if I’m not mistaken, concrete is one of the unsung heroes in the advancement of society.
What are the ingredients of concrete? One of them is lime. Made from limestone. They take limestone and crush it then heat it to drive off a CO2 molecule from the calcium carbonate.
What would be the cost to a society if the manufacture of concrete was banned?
Anybody out there drink water? If it’s from a municipal source then there’s a good chance the water plant uses lime to treat the water. More CO2.
Part of the process in many of those water plants is adding CO2 back into the water after the lime addition and settling. (To change the remaining carbonates back into bicarbonates.)
We release about 5 tons a day, everyday where I work. Some of it escapes into the air.
How many “CO2 is pollution” promoters are willing to not have a road to drive on or mortar to bond the bricks of their houses?
Would they go back to hauling their water from the nearest stream?
Coal, gas, and oil energy production aren’t the only things that produce CO2 emissions.
PS Our current CO2 suppler gets it from ethanol production.
What goes around comes around.
This is just the same old pseudoscientific, pseudointellectual, Leftist bullshit. What about the economic GAINS – to countries rich and poor – of NOT spending trillions on the emperor’s new clothes? What about the economic GAINS of NOT taxing the f— out of natural fuels? What about the economic GAINS of every Western leader over the last 30-40 years NOT spending the Western hemisphere into irreconcilable DEBT? Angry? Moi? Doesn’t begin to describe how I feel about the sorts of useful-cretins-with-an-agenda who produce these biased reports.
Jo Nova calculated that the recently demised Australian Carbon (dioxide) tax was costing the country over $5.000 per tonne of CO2. Fortunately the Abbott government realized the problem and repealed the tax over a year ago. The economy is now rebounding.
The problem with sitting in an ivory tower playing with computers is that you aren’t out in the field exercising your common sense
These idiots have no common sense to exercise. Money, Money, Money.
This stupid paper is getting a lot of attention. Just dismiss it as Girlie Science.
Meanwhile somewhere someone is about to cite it in a paper of their own and give it credibility it does not deserve. Isn’t this how it works?
Have a look at the list of U.S. states by economic growth rate.
http://upload.wikimedia.org/wikipedia/en/d/d9/Percent_Change_in_Real_GDP_by_State%2C_2012.png
One can clearly see there is no correlation whatsoever between average temperature and economic growth rate. Is there a legitimate reason to suppose the Immortal Powers should prefer a temporal correlation to a spatial one?
BTW, does anyone still remember the thing called sanity check from olden times?
Look at the huge economic increase in North Dakota. Fracking, anyone?
You are onto something here. A famous Willi’s E graph perhaps. plot regional change in GDP vs regional change in temperature over the past century, with different colored bubbles to show the size of the region.
Social cost of carbon has to be made $221 because if not all the EPA’s regulations go out the window. They are required by law to show net benefit in their cost-benefit analysis projections, and the costs they estimated when they wrote the Regulatory Impact Analyses were way too low. At the time the costs were just guesses too (not totally legit, but that’s what they did), but over time the true costs of Carbon Capture and Sequestration have proven to be much higher than they estimated, and so they have to balance their numbers. They can only do this with a much higher social cost of carbon.
Economics. That other hard science that compliments climatology to make even more accurate models (sarc)!
The social cost of the taxes to pay these leaches to do these nonsensical studies is too high.
Did you use a computer model to come up with that conclusion?