Guest Post by David Middleton
This is a question that is rarely asked by pollsters, but is is probably far more important of a question than “Are you now, or have you ever been a climate denier?”…
How Much Will Americans Pay to Battle Climate Change? Not Much
Sam Ori is the executive director of the Energy Policy Institute at University of Chicago.
A wide range of public opinion polls point to a clear and growing trend: Americans of all political stripes are increasingly worried about climate change. This is undoubtedly good news for those advocating for robust policies to reduce carbon emissions, the main contributor to climate change.
But here’s a less asked and probably more important question: What are Americans actually willing to pay to do something about it?
This is what researchers from the Energy Policy Institute at the University of Chicago (EPIC) and the Associated Press—NORC Center for Public Affairs Research at the University of Chicago set out to better understand. Their nationally representative pollfound that 43% of Americans were unwilling to pay an additional $1 per month in their electricity bill to combat climate change—and a large majority were unwilling to pay $10 per month. That’s despite the fact that a whopping 77% said they think climate change is happening and 65% think it is a problem the government should do something about. Support plummets as the amount of the fee increases.
This is an upside-down result. The best available science tells us that Americans should be willing to pay considerably more, because the damages from climate change are so great—including to them personally. If we use the federal government’s estimate of the combined social cost of carbon pollution and apply it to the typical U.S. household’s electricity consumption on today’s national grid mix, the average household faces damages of almost $20 per month. Yet just 29% of respondents said they would be willing to pay at least that much.
You can count me in the 43%. I wouldn’t pay $1 per decade more for electricity to combat something that is 95% mythical and 5% benign.
This bit is priceless and worth repeating:
The best available science tells us that Americans should be willing to pay considerably more, because the damages from climate change are so great—including to them personally. If we use the federal government’s estimate of the combined social cost of carbon pollution and apply it to the typical U.S. household’s electricity consumption on today’s national grid mix, the average household faces damages of almost $20 per month. Yet just 29% of respondents said they would be willing to pay at least that much.
The first part strikes me the same way that this Roy Spencer quip did:
“The best available science tells us that” the observations are wrong. So, if that same “best available science tells us that” global warming will inflict $20/month of damages on the typical household, we should happily shell out $20/month to prevent it… Any sane person would say… “No thank you.”
Furthermore, the “social cost of carbon” isn’t “the best available science.” It isn’t even science. It’s more like fraud…
The EPA Uses New Math to Justify Costly Global Warming Regulation
When calculating the future impacts of government action, the federal government has very specific rules about how the calculation should be done. The Office of Management and Budget (OMB) clearly states that when calculating the cost of future impacts a standard “discount rate” of 7% should be used (a discount rate is used to take account of the fact that $10 today is worth more than $20 10 years from now). But when it comes to global warming regulation, that 7% rate is a problem for bureaucrats. With a 7% discount rate, the present cost of future global warming is virtually zero, even using the federal government’s excessively alarmist models. What’s a radical federal bureaucrat to do when math says that global warming will have virtually no negative economic effect? Well, they take a page from Common Core and change how they do the math.
In 2010, global warming alarmists in the Obama administration set out to find a way to justify the huge costs of the global warming regulations they wanted to pursue. This effort focused on creating a “social cost of carbon,” which purports to put a dollar figure on the alleged future economic harms of global warming. The bureaucrats could then take this theoretical “cost” and use it to claim that their regulations were actually saving the economy from future damage.
To estimate future costs, the government selected three integrated assessment models which try to project the economic future. Not surprisingly, all three tend to estimate substantial harms from global warming, even though there is still a great deal of debate over both how much warming might happen in the future and whether any such warming will be harmful (but for the purposes of this discussion that can be left aside). When the federal government’s standard 7% discount rate was applied to these theorized future harms, the present value of those costs dwindled to insignificance. Indeed, applied to one of the models, the present “cost” is actually negative, implying that taking no action to reduce carbon dioxide could actually be economically beneficial. In other words, more economic growth today will be more beneficial to future Americans than restrictive regulation, even if we assume significant future harm from global warming.
Of course this result could not be allowed to stand. The whole point of a social cost of carbon is to artificially inflate the benefits of global warming regulation. So the bureaucrats do what they do best: change the rules to get the outcome they wanted. In this case, the Obama administration used different, much smaller discount rates. The administration publicized a calculated social cost of carbon for discount rates of 5%, 3% and 2.5%, completely disregarding the required 7%. Then they chose the “mid-range” of their new three lower rates, and announced a social cost of carbon of $36 per ton of carbon dioxide (in contrast to close to $0 per ton at a 7% rate).