The Social Benefit Of Carbon

Guest Post by Willis Eschenbach

After my recent post on the futility of the US cutting down on CO2 emissions, I got to thinking about what is called the “social cost of carbon”. (In passing, even the name is a lie. It’s actually the supposed cost of carbon DIOXIDE, not carbon … salesmanship and “framing” applied to what should be science. But I digress …)

According to the Environmental Defense Fund the “social cost of carbon” is:

… the dollar value of the total damages from emitting one ton of carbon dioxide into the atmosphere. The current central estimate of the social cost of carbon is roughly $40 per ton.

Now, for me, discussing the “social cost of carbon” is a dereliction of scientific duty because it is only half of an analysis.

A real analysis is where you draw a vertical line down the middle of a sheet of paper. At the top of one side of the paper you write “Costs”, and under that heading, you list the costs of whatever you are analyzing … and at the top of the other side of the paper you write “Benefits” and beneath, you list those benefits. This is what is called a “cost/benefit analysis”, and only considering only the “Costs” column and ignoring the “Benefits” column constitutes scientific malfeasance.

Instead of just looking at the “social cost of carbon”, we also need to look at the “social benefit of carbon”, which if I follow the logic of the previous definition would be the dollar value of the total benefits from emitting one ton of carbon dioxide into the atmosphere.

Now, the carbon emissions are coming from the use of fossil fuels. This set me to wondering about the historical changes in the mix of different fuels that power our planetary economy. So as is my wont, I got the data and I graphed it up. Figure 1 shows the changes in the mix of the fuels that the world uses to give us our amazing standard of living.

Figure 1: Global Total Primary Energy Consumption, 1965-2017.

First a word about units used to measure energy. The units of energy in Figure 1 are “million tonnes of oil equivalent”, abbreviated Mtoe. (“Tonnes” means metric tons of 1,000 kilograms, which are about 2200 pounds.).

An “Mtoe” is the amount of a given energy source, be it coal, natural gas, solar, or hydroelectric, that has the same amount of energy as a million tonnes of oil. There are other variants of this measure, such as billion tonnes of oil equivalent (Btoe), thousand or “kilo” tonnes of oil equivalent (Ktoe), and barrels of oil equivalent (BOE). One BOE is equivalent to 1,682 kilowatt-hours of energy. For these types of conversions from one unit to another I use the wonderful UnitJuggler.

Now that we understand the units, see that red thread up at the top of Figure 1 above? That’s solar energy.

Plus wind energy.

Plus biofuels energy from ethanol and biodiesel.

Plus geothermal energy.

Plus tidal energy.

Plus biomass energy.

Plus wave energy.

In short, that red line is the sum of every kind of renewable energy we use commercially, and after years of subsidies, it’s grown all the way up to being two and a half percent of the total energy we use.

Be still, my beating heart …

And sadly, this has been at a huge cost to the taxpayer. Not only does the renewable energy itself cost more than either fossil fuels or nuclear energy, but the subsidies are also horrendous. Figure 2 shows a part of what the US taxpayer has been shelling out for the privilege of using unreliable, weak, intermittent renewable energy …

Figure 2. Average US subsidies on various fuel sources.

Figure 2 shows the subsidy per barrel of oil equivalent energy (BOE). For energy from oil and coal, the subsidy is trivially small. For nuclear, it’s larger, but still reasonable, since nuclear energy is dispatchable reliable baseline power.

But the subsidy for intermittent, unreliable renewable energy is huge. For comparison with the renewable subsidy, today’s price for a barrel of West Texas Intermediate (WTI) crude oil is $51.15. Plus the $0.26 per barrel subsidy on oil, we’re paying $51.41 per barrel … which means that the subsidy alone on renewable energy is over half of the cost of an equivalent amount of oil!

And that’s just the Federal subsidies. In addition, states like California have costly “Cap And Trade” programs, “carbon taxes”, and “renewable mandates” that are all extra costs tacked on to the price of renewable energy.

And even with that huge Federal subsidy, plus all of the other coercive measures used to push the renewable dream year after year, after immense amounts of money spent decade after decade, after all of that, renewable energy is STILL less than three percent of the global energy usage.

And as we’ve seen in France, folks are getting fed up with paying this exorbitant subsidy for an economically uncompetitive form of energy …

One thing that these figures make abundantly clear is that renewable energy ain’t gonna save us. For the foreseeable future, the world will continue to be powered mostly by fossil fuels, and all the subsidies, and all the carbon taxes, and all the “renewable mandates”, and all the US Resolutions and the wishful thinking won’t change that.

While looking at the graphs above, I fell to considering how energy is inextricably linked to economic development. Energy is what drives the great economic engine of the planet, the engine that has lifted us out of the ugly, short, brutal lives of our predecessors and has insulated us from the vagaries of the weather.

So … how well does historical energy use correlate with the global Gross Domestic Product, which is the global sum of all of the goods and services produced annually? Figure 3 shows that relationship.

Figure 3. Scatterplot, global energy use versus global gross domestic product. Energy use source as in Figure 1. As noted on the vertical axis, all prices are in constant (inflation-adjusted) current US$.

As you can see, the global Gross Domestic Product (GDP) is a simple linear function of how much energy we use. You could think of the economy as a giant machine that turns energy into goods and services. We harvest energy in one of a hundred forms, including human labor, and we use that energy to make steel and build houses and create medicines and catch fish and grow food and manufacture automobiles and engage in all forms of creation of wealth. The relationship is clear—how wealthy we are is simply a function of how much energy we can command.

Now, every year the world is needing to feed and house and clothe and transport an increasing number of people. It’s not optional. The population is going up. Not only that, but poor people want to have reasonably comfortable lives like those of us in the industrialized world. There are only two ways that we will be able to take care of all of their needs.

The two ways are first, to use more energy … and second, to use it all more efficiently. Regarding efficiency, Figure 4 shows the increase over time in the GDP per barrel of oil equivalent energy used.

Figure 4. Change over time in the amount of goods and services (constant 2016 dollars) that we get from using energy. As noted on the vertical axis, all prices are in constant (inflation-adjusted) current US$.

Now, this is interesting. Back in 1965, for every barrel of oil equivalent energy that we used, we got about fifty dollars worth of goods and services.

And today, about fifty years later, we’re getting about five hundred dollars worth of goods and services out of the exact same amount of energy. This is good news—we’re getting more and more goods and services out of each unit of energy that we use. Thanks to the joys of competition and the fact that energy costs money, we’re constantly finding new and inventive ways to produce more with less energy.

With that relationship between energy and GDP as prologue, let me follow another train of thought. Fossil fuels are hydrocarbons, so-called because they are compounds of hydrogen and carbon. When they are burned, you get energy from two sources—the hydrogen and the carbon. When you burn hydrogen, you get water plus energy. When you burn carbon, you get carbon dioxide plus energy.

This means that the amount of carbon dioxide produced is a direct and simple function of the amount of energy used. Given the same mix of energy sources, more CO2 produced means more energy used, and vice versa. Figure 5 shows that relationship

Figure 5. Tonnes of CO2 emitted per tonnes of oil equivalent energy used.

(Yes, I know that it’s strange that we get more than one tonne of CO2 from burning one tonne of oil. The reason is that the oxygen in the carbon dioxide comes from the air. Before burning, the molecular weight of the carbon is 12 … after burning, the molecular weight of the CO2 is 44. Because of that, we get more than a tonne of CO2 out of burning a tonne of oil. We now return you to your previously scheduled programming …)

And this brings us to the final relationship. We know that both GDP and CO2 emissions are functions of the amount of energy used. This, of course, means that we can take a look at the relationship between GDP and CO2. To make the relationship clear and understandable, I’ve added CO2 to Figure 3, which showed GDP versus Energy Use.

Figure 6. Scatterplot, global energy use and concomitant CO2 emissions versus global gross domestic product. Energy use source as in Figure 1. As noted on the vertical axis, all prices are in constant (inflation-adjusted) current US$.

As in Figure 3, Figure 6 again shows that for each additional tonne of oil equivalent energy use, we get $5,740 in additional goods and services.

It also shows that for each additional tonne of CO2 produced from that energy use, we get $4,380 in additional goods and services.

And this brings me back to the question of cost/benefit analyses and the idea of the “social benefit of carbon”. As noted above, people put the “social cost of carbon” (actually carbon dioxide) at “roughly $40 per ton”.

Now, remember that corresponding to the “social cost of carbon”, the “social benefit of carbon” is:

… the dollar value of the total benefits from emitting one ton of carbon dioxide into the atmosphere.

As Figure 6 shows, the benefit that we get from emitting that additional tonne of carbon dioxide into the atmosphere is an increase in goods and services of $4,380 … which dwarfs the assumed social cost of carbon of $40. When we do an actual cost/benefit analysis, the result is almost all benefit.


FOOTNOTE: Let me add one other much smaller aspect of the question of the social benefit of carbon. This involves the “greening” of the planet due to the increased atmospheric carbon dioxide. Greenhouse owners routinely release CO2 inside their greenhouses to improve plant growth. Figure 7 shows plant growth at ambient (AMB) CO2 levels, as well as at the current level plus 150, 300, and 450 ppmv.

Figure 7. Plant growth under differing levels of CO2.

Now, the best estimate is that to date, the increasing levels of atmospheric CO2 have increased global plant growth by about 10%.

To see how much difference that 10% makes to the human agricultural production, I turn to that marvelous site, the Food and Agricultural Organization (FAO) dataset, available here. It says that the total of all commercially-raised fruit, vegetable, and fiber production in 2016 was about US$4.6 trillion. If we assume that it increased by 7% due to the increased plant growth from CO2, that is a benefit of about US$322 billion dollars.

And dividing that by the 33.5 billion tonnes of CO2 emitted in 2016 gives us a net benefit of about $9 per tonne of CO2 … and I note that this does NOT include the value of the 10% growth in things like forest production of timber, or the increase in oceanic production of plankton and associated marine growth, or the increase in meat and dairy production due to increased pasture growth, or the increase in home-garden vegetables (which make up a surprising amount of world food production).

It also doesn’t include the benefits of the decreased cost of water used to produce fruits, fibers, and vegetables. Plants have pores in their skin through which they take in CO2. The less CO2 the air contains, the wider those pores must open. The problem is that water escapes through the pores, and the wider the pores open, the more water the plant uses, and thus the more water the plant needs to stay healthy. So when CO2 levels go up, water use goes down … another social benefit of CO2.

My conclusion? The reason that alarmists talk about the “social cost of carbon” and never talk about the “social benefits of carbon” is that the assumed possible costs of engaging in activities that emit CO2 are in measured in tens of dollars per tonne of CO2. Not only that, but those are predicted future costs, which will be valid only if the “CO2 Roolz The Temperature” theory is correct.

But the social benefits of engaging in activities that emit carbon dioxide, as we’ve seen above, are measured in thousands of dollars per tonne of CO2 … and those are real measurable benefits that don’t depend on alarmist doomcasts of future claimed catastrophes.


Here, a bit of rain again, a good day for writing. The cat just came in, he’s not happy about the rain, but the forest plants are loving it.

My wish for all of you is for days of rain when you need water, days of sun when you need to recharge your mental batteries, and the wisdom to know that the weather doesn’t give a damn which one you might want on any given day …

w.

PS—Misunderstandings are the bane of the intarwebs. In the interest of clarity, when you comment please quote the exact words that you are discussing, so we can all be clear about both your subject and who you are addressing.

139 thoughts on “The Social Benefit Of Carbon

  1. Good post Willis – thank you.

    Fossil fuels continue to comprise about 85% of global primary energy, unchanged in decades despite huge growth in global primary energy and trillions in wasted subsidies for intermittent green energy nonsense.

    If fossil fuels were eliminated tomorrow as the greens insist, everyone in the developed world would be dead in a month from starvation and exposure.

    Best, Allan

    • “If fossil fuels were eliminated tomorrow as the greens insist, everyone in the developed world would be dead in a month from starvation and exposure.”

      They know this.very well. The real goal here is, and has always been, the liquidation of individual sovereignty.

      It is time to bring back the HUAC. ( House Un-American Affairs Committee)

      • Allan MacRae wrote:
        “If fossil fuels were eliminated tomorrow as the greens insist, everyone in the developed world would be dead in a month from starvation and exposure.”

        Allan MacRae wrote:
        “If fossil fuels were eliminated tomorrow as the greens insist, everyone in the developed world would be dead in a month from starvation and exposure.”

        Chris Riley wrote:
        “They know this very well. The real goal here is, and has always been, the liquidation of individual sovereignty.
        It is time to bring back the HUAC. (House Un-American Affairs Committee)”

        Chris, I believe you are correct.
        The far-left, phony-greens are traitors who are trying to destroy our society and our freedoms. They belong in jail.

        • https://torontosun.com/opinion/editorials/bonokoski-2018-shaping-up-to-be-a-doozy#comments

          Here is how modern politics works:

          The far-left is winning, especially in the developing world, where over 100 countries are pseudo-Marxist dictatorships, based on their leftist phony rhetoric, but are actually just military dictatorships, run for the ruling elite and their armed thugs – see Zimbabwe and Venezuela… and North Korea, and many more..

          The left gains political power by promising imbeciles lots of free stuff. Then they destroy the economy, create widespread poverty and live like kings atop a ruined state – because you can’t be kings without lots of peasants.

          It is really no different in the developed world. Get elected by lazy greedy imbeciles, destroy the economy with fake green energy and other crazy policies, and live like kings on top of a ruined economy, looking down on all the peasants.

    • Yep, that US carbon production benefits the ENTIRE planets crop yields. It isnt 9$ per tonne, it is more like $90!

    • An excellent post! I would love to see a detailed analysis and estimate of the number of deaths or percentage of population that would likely die in the event fossil fuels were eliminated in 10 years. I have a hunch that the resulting carnage world wide would far exceed the negative impact of a gradual increase in temperature.

  2. Yes, this is what makes the very concept of the eco-loon “social cost of carbon” nonsense. The benefits dwarf any perceived costs — just as a start, without our added CO2 we wouldn’t be able to feed the world right now.

    • The benefits CO2 itself provides for food security alone dwarf any predicted risk posed by warming. That ignores the benefits of cheap energy or the intrinsic benefit of a warmer world (accepting their co2 driven feedback model for the sake of argument).

      I wish co2 could raise temp a degree or 2 and we could push it up to 800-1200ppm. Any other course of action is inhumane. We need to feed 10B people.

  3. Plankton generally get their carbon dioxide from water.

    C4 plants, such as corn (maize), sorghum, millet, sugar cane and pineapple, account for about 23% of carbon fixation (primary productivity), so your estimate of 7% rather than 10% increase from more plant food in the air is reasonable. All trees are C3 plants, so the effect on forestry and browsing animals would be more pronounced.

    • John Tillman December 15, 2018 at 10:18 am

      Plankton generally get their carbon dioxide from water.

      True, John … but the water is generally in equilibrium with the air. As atmospheric CO2 rises, so does oceanic CO2.

      Thanks for an interesting comment,

      w.

    • Details:
      As I recall, almost all food plants use the C3 photosynthetic pathway and shut down at about 160 ppm atmospheric CO2.
      Only about 3% of land plants use the C4 pathway, including corn, sugar cane, sorghum and millet, and can survive in lower CO2 concentrations.
      About 8% of land plants use the CAM pathway, including pineapple.

      Here is one reference:
      https://www.cropsreview.com/c3-plants.html

      https://wattsupwiththat.com/2009/01/30/co2-temperatures-and-ice-ages/#comment-79524

      (Plant) Food for Thought (apologies – written too late at night)

      [excerpt]

      When life on Earth comes to an end, will it be because CO2 permanently falls below ~150ppm as it is permanently sequestered in carbonate rocks, hydrocarbons, coals, etc.?

      Since life on Earth is likely to end due to a lack of CO2, should we be paying energy companies to burn fossil fuels to increase atmospheric CO2, instead of fining them due to the false belief that CO2 causes dangerous global warming?

      • Since life on Earth is likely to end due to a lack of CO2, should we be paying energy companies to burn fossil fuels to increase atmospheric CO2, instead of fining them due to the false belief that CO2 causes dangerous global warming?

        At least a decent tax credit for saving life itself.

        • Salut Jean!
          You might enjoy this old post.

          https://wattsupwiththat.com/2018/07/02/opening-up-the-climate-policy-envelope/#comment-2394869

          Atmospheric CO2 is inexorably declining as it is being sequestered in carbonate rocks. In the last Continental Last Ice Age, atmospheric CO2 declined to about 180 ppm – in the next Ice Age it could drop lower, even closer to the extinction point of C3 plants at about 150-160 ppm. ”

          Virtually ALL food plants use the C3 photosynthetic pathway, so a drop of atmospheric CO2 to 150-160 ppm will be an extinction event for ~all advanced terrestrial life on Earth.

          A few food plants (less than 1%) use the C4 photosynthetic pathway, including corn and sugar cane – but I doubt terrestrial life could survive for long on Sugar Frosted Flakes – notwithstanding the persistent rumour that “They’re Great!” 🙂

          There are also CAM photosynthetic pathway plants, so we can look forward to having pineapple with our Sugar Frosted Flakes.

      • Makes me, exploration geologist and science fiction fan, start thinking about “mining” the atmosphere of Venus. Hover over the planet, suck up gas, separate out the acid, and ship compressed CO2 back to Earth. It actually might work.

        • No exploration geologist needed for this effort! Just development and production geologists and mining engineers (and maybe an aeronautical engineer or two).

      • Allen, life will end in fire. For those that don’t believe. There’s no since in wondering how things end. The Holy Scriptures have never been wrong.

        Heaven and Earth will flee from the Great White Thrown of judgment and will not be seen again. Revelation 20:11. Both will be destroyed. No lack of CO2. Just lack of righteousness.

    • Thanks for an interesting link, Richard.

      You define the “private benefit of carbon” as being the price of the energy times the emission coefficient, viz:

      It is the weighted average of the price of energy times the carbon dioxide emission coefficient, with energy used as weights.

      You reckon that figure to be $411 per tonne of CO2. To calculate it, you’ve taken the cost of energy in some units, say $/TOE, and multiplied it by the inverse of the emission coefficient, which is in units of TOE/tonne of CO2. Units cancel, and we’re left with $ of energy per tonne of CO2.

      However, I would disagree that that is the “private benefit of CO2”. I say this because nobody wants a pound of coal. The benefit is not the coal. The benefit is the value of what the coal can provide—the goods and services that give us our modern lifestyles.

      It’s clearer if you look at it from the point of losses rather than gains. In 2017 we used on the order of 23 billion tonnes of oil equivalent of energy. Suppose that energy disappeared.

      Would we be poorer by the value of that energy, which according to your figures is about $13.7 trillion dollars?

      Or would we be poorer by the total of the GDP, the goods and services which could NOT be produced without that energy, which is about $81 trillion dollars?

      Obviously, we’d be poorer by the value of the GDP … so that must be the benefit we get, not simply the cost of the energy itself.

      My best to you, thanks for your comment,

      w.

  4. Golly, I have so many acquaintances who could profit from this of rammed through their letterboxes. That first graph especially.

    • Amen. As typical of Willis, well written and illustrated, and interesting. I may be making a .pdf of this and sending it to are concerned to some degree but not enough to really take sides in the argument.

  5. The “social costs of carbon” are sort of like the “social costs water”, or even, the “social costs of oxygen”. Or how about, the “social costs of iron”? Absurd. But that’s GreenLogic for you.

  6. The whole of our economic systems, our prosperity, our food production, the level of population……..the whole lot, our very existence…………… it’s all based on the leverage that fossil fuels provide and which wind and solar can not ever provide. If 1 man day is used to exploit fossil fuels, how many man days does it ‘free up’ for other endeavors? An awful lot more than every man day spent building windmills or solar panels.

    The world will descend in famine disease and anarchy without wide spread fossil fuels (or nuclear). There is currently no alternative.

    All the climate change lies, false accounting, junk science, ideological brainwashing……… it is all swept aside by that one truth.

    • Benefits: a working economy with industry and new infrastructure. Jobs for all who want them. No major disease nor famine. Falling crime rate.
      Costs: In economic externalities = $40/tonne of ‘carbon’ released.

      I think I can live with those benefits.

  7. This post should be nailed to the doors of every venue where a climate conference is held or going to be held.
    It should be the preface of every program or booklet given out to the delegates of such conferences.
    It should be on posters in public places, everywhere.

    Thank you for this excellent post!

  8. Willis,

    Nice study, but did you correct the GDP data for inflation? If not, that might be a useful addition to remove a possible criticism from the usual suspects.

    • Thanks, Stu. Yes, as it says on the left hand side of Figures 3, 4, and 6, all the values are in constant current US$.

      w.

  9. Willis,

    Plants have pores in their skin through which they take in CO2. The less CO2 the air contains, the wider those pores must open. The problem is that water escapes through the pores, and the wider the pores open, the more water the plant uses, and thus the more water the plant needs to stay healthy. So when CO2 levels go up, water use goes down … another social benefit of CO2.

    Better check on this. Pore opening depends on the turgor of the guard cells surrounding the opening and research seems to indicate CO2 is not the control factor. However, the density of pores does seem to be related to CO2 concentration. Also, water loss may have some beneficial effect by cooling of leaves. At any rate, transpiration and water movement through plants brings various dissolved elements to growing stems and leaves. More growth requires more of these nutrients so evaporation will necessarily increase.

  10. As always, a well illustrated, clearly presented analysis, Willis. It is also generously understated. A major benefit of fossil fuels that could be legitimately added is the enormous taxes paid by energy companies to governments. One can argue fairly that these are paid by the consumer in the cost of the fuel, but since you mentioned subsidies to the fossil fuel industry (and the renewablers), this massive tax revenue would totally be lost to government for its expenditures were the world to be tufted by windmills and glazed with solar to the exclusion of fossil fuels. Governments would have to extract this lost revenue from the taxpayer in other ways, PLUS provide 50 times the current unit subsidy of $28 given to renewables. The difference is a huge benefit to society of fossil carbon dioxide.

  11. Wow Willis, this has to be your best post ever…It really needs to be turned into a YouTube video…( and not one dang spelling/grammar mistake for me to whine about ) lol.

    + 1k likes

  12. Wouldn’t it be better to talk about the social cost of carbon burned as compared to CO^2 which is a 14/44 smaller number and wouldn’t include other use?

  13. Seems the quickest way to kill off “renewables” is for congress to eliminate subsidies…which means “intermittants” are eternal.

    • It is not just subsidies per se, but requirements utilities use a certain percentage of renewables, and placing renewables at the head of the line for priority on the grid.
      Perhaps a better method would be to recognize that grid electricity is a service, not a commodity as such. If the suppliers were bidding for providing a given amount of power for some period of time, with requirement as to reliability, wind and solar would be priced accordingly (and much lower).

      • …placing renewables at the head of the line for priority on the grid…”

        which is called a “feed-in tariff”.

  14. Willis, when you did the economic benefits of a barrel of oil equivalent, was that in inflation adjusted or current year prices?

    • Thanks, Gary. As it says on the left-hand side of Figures 3, 4, and 6, all the values are in constant current US$.

      And since you’re the second person to ask, I’ll add an explanatory sentence to the head post.

      w.

  15. Willis said:

    “(“Tonnes” means metric tons of 1,000 kilograms, also called “long tons”, which are about 2200 pounds.).”

    A Tonne is 1000 kilograms, which is approximately 2204.6226 pounds, and can be rounded to “about” 2200 pounds, I guess. The USA Ton is 2000 pounds. A Long Ton, however, is 2240 pounds, and might be a British Ton.

    • Dang … learn something new every day. Thanks, Dan, always good to hear from you. I’ll remove the “long ton” reference from the head post.

      w.

    • Indeed it is a British or better “Imperial” ton (2240 pounds).
      I, as an Englishman, didn’t know that it is not only our common language and size of our pints that differentiates us (from the US) but also our tons 🙂

  16. Willis,

    Excellent article as usual…

    One small remark:
    There is a good scientific reason to talk about carbon and not carbon dioxide: it is only CO2 in the atmosphere. In the raw materials it is mostly C in coal, CxHx in oil and CH4 in natural gas. In all cases that converts to CO2, but again when absorbed that is 1% CO2, 90% bicarbonates and 9% carbonates in seawater, a fraction of a second CO2 in plants and then one gets a host of molecules: carbohydrates (sugar, starch, cellulose) and other stuff…

    Just follow the carbon cycle and nothing can hide anywhere or being lost: no matter in what molecule the carbon atom is incorporated, the mass balance must fit…

    • Thanks, Ferdinand. While there is indeed “good scientific reason to talk about carbon and not carbon dioxide” as you point out, in this particular context we are NOT talking about the costs of carbon in our bodies or in the soil. We are talking specifically about the cost of carbon dioxide.

      w.

      • Technically Willis, you’re pointing out that the realized economic benefits of carbon-based fuels far exceed the future speculative costs of extra carbon dioxide in the atmosphere.

        • Right. I scanned all the way through just to see if anyone else brought this up, and David indeed you did. At the very beginning Willis quoted

          … the dollar value of the total damages from emitting one ton of carbon dioxide into the atmosphere.”

          and then followed on with the inverse definition, of

          …the dollar value of the total benefits from emitting one ton of carbon dioxide into the atmosphere.

          (For a real quibble I will point out that the first definition was quoted from other sources, and therefore is correctly displayed as a block quote, but the second definition is one you produced yourself, and therefore it is incorrect to show it as a block quote. It does, however, set it off and make it easier to find, so I suppose we could forgive that one.)

          So what you should be showing is only the benefits of that carbon after it is spewed into the atmosphere as carbon dioxide, by your definition it matters not how it got there (yes I know the SCC calculations pertain only to CO2 in the atmosphere allegedly derived from the combustion of fossil fuels, but it doesn’t really say that in their definition, so they should be calculating the SCC for ALL CO2 emitted into the atmosphere; and likewise your definition… but you’re calculating SBC for the same quantity they’re calculating SCC, so you’re consistent). That means you could, even should, snip out everything from the paragraph before Figure 1 all the way to your “FOOTNOTE:…”

          Now if you calculate as a benefit of atmospheric carbon dioxide all the energy produced by combusting that fossil fuel to generate that carbon dioxide, then the calculators of SCC could calculate the harm of any concurrent real pollutants (other than CO2, that’s not a real pollutant) released during said combustion of said fossil fuels.

          Please be nice when you give me your GTH response. By “be nice” I only ask that you keep it clean, I may want to show this exchange to my wife and live-in grandchildren. 🙂

          • Red94ViperRT10 December 15, 2018 at 8:29 pm

            Right. I scanned all the way through just to see if anyone else brought this up, and David indeed you did. At the very beginning Willis quoted

            … the dollar value of the total damages from emitting one ton of carbon dioxide into the atmosphere.”

            and then followed on with the inverse definition, of

            …the dollar value of the total benefits from emitting one ton of carbon dioxide into the atmosphere.

            (For a real quibble I will point out that the first definition was quoted from other sources, and therefore is correctly displayed as a block quote, but the second definition is one you produced yourself, and therefore it is incorrect to show it as a block quote. It does, however, set it off and make it easier to find, so I suppose we could forgive that one.)

            Thanks, Red. True, my bad. I’ve amended the head post to make it clear that the definition is based on their logic but is not their words.

            As to the rest, I stand by what I wrote. They want to stop the use of fossil fuels based on the “social cost of carbon”. Therefore, it is valid to show the benefits of the same fossil fuels that they want to ban. Since they are trying to get rid of fossil fuels based on the SCC, then surely the benefits of those same fuels are relevant to any cost/benefit analysis.

            As to the question of the harm of any concurrent real pollutants, sure, that would be another social cost. But I was looking at the benefits.

            Finally, let me say that I strongly object to this process that is generally called “monetizing externalities”. The problem is the very one we are discussing here—there are no hard-and-fast rules about what to include and what to exclude. I discussed this problem in some detail in a post called Monetizing the Effects of Carbon.

            As to being nice, I do my best to reply to questions and objections in the same style as they are asked … when someone comes in and starts insulting me, I tend to reply in kind only twice as hard. Hey, I’m a curmudgeon, what can I say?

            But when someone comes in as you’ve done, with an honest objection posed honestly, I do my best to answer in the same vein.

            Best regards,

            w.

          • If you’re going to analyze the cost-benefit relationship of any regulation of industrial processes, you have to include the full benefits of the industrial processes. Otherwise, it’s junk economics.

          • @David Middleton December 16, 2018 at 4:36 am Thank you! So really, my comment was aimed more at the “Social Cost Of Carbon” warriors, who carefully set up their definition and then proceed to calculate something else! But I knew it was unfair the very second I first heard of such a thing. It was set-up the same as the L&C 97%-concensus paper, where they had in mind a number before they ever even started, and only went through the exercise of assembling numbers to try to provide cover and fool some of the people.

    • I think we should be using the term “carbon-based” rather than fossil fuel.
      But then, only my mother ever cared what I thought.

      For the record, shortly after I came along the folks switched from burning coal to gas for heating.
      My sister and cousins cleaned up the coal storage area and then used it for a play room. The girls thought it was great progress.

      • I read an article recently that disputed the term “fossil fuel” on the ground that oil reserves are now being discovered and used that are far deeper than animals or plants have ever been; thus, fossils are not involved in that oil, and by extension perhaps not in any oil. I can’t locate the article, but it seemed persuasive to me. Has anyone else read about this?

        • You will find some of the abiogenic petroleum discussion at No Tricks Zone and here on WUWT.
          I don’t find any of it compelling, although small amounts can be found.

          I don’t like the term fossil fuel because it really has nothing to do with true fossils and it perpetuates the Sinclair Dino.

        • I highly recommend the book The Deep Hot Biosphere by Thomas Gold,

          http://www.amazon.com/s/ref=nb_sb_ss_i_1_13?url=search-alias%3Dstripbooks&field-keywords=the+deep+hot+biosphere+the+myth+of+fossil+fuels+by+thomas+gold&sprefix=the+deep+hot+

          It is Gold’s premise that the vast, vast majority of hydrocarbon deposits of oil and gas and hard coal on earth are from hydrocarbons present in the original stellar accretions of space dust which amalgamated to become the earth. As such, these reserves are NOT biological in origin, the reserves are much more abundant than thought, are fully renewable, and virtually inexhaustible.

          Thomas Gold is no dummy:

          Thomas Gold is a member of the National Academy of Sciences, a Fellow of the Royal Society, and an Emeritus Professor of Physics at Cornell University. Regarded as one of the most creative and wide-ranging scientists of his generation, he has taught at Cambridge University and Harvard, and for 20 years was the Director of the Cornell Center for Radiophysics and Space Research.

          Researchers have found highly complex organic molecules in deep space.

          “not only are stars producing this complex matter on extremely short time scales of weeks, but they are also ejecting it into the general interstellar space in between stars.”

          http://newatlas.com/organic-stardust-discovered/20310/?utm_source=Gizmag+Subscribers&utm_campaign=90696c5d47-UA-2235360-4&utm_medium=email

          I imagine it will take some time to get rid of the belief that oil and gas are “fossil” fuels and non-renewable.

        • Even if the abiogenic petroleum hypothesis turns out to be valid, I still think we’re burning it up faster than the Earth can replenish. That doesn’t mean I believe in “peak-oil” though. Well, I do, but I also believe there are reserves we have not yet even discovered, and as technology advances, many uneconomic reserves will become economic. And by the time we begin to make a dent in the oil reserves, we will have conquered the regulatory stranglehold over nuclear energy, or found a cold-fusion process or something maybe even completely unrelated that will guarantee energy abundance for all perpetuity. I’m just throwing this out to be contrary.

          • Starting off with the fact that there is zero-point-zero evidence of any significant volumes of abiogenic crude oil on Earth (methane is not oil), even if oil was abiogenic, it has to be produced from economically viable accumulations. These are 100% sedimentary rocks or fractured basement/crystaline rocks in or adjacent to sedimentary basins. In the case of shale and other unconventional plays, we are producing it directly from source rocks.

            Oil is still being generated is sedimentary basins and migrating into reservoir rocks. This has been observed and even documented with 4d seismic in Eugene Island 330 field in the Gulf of Mexico. However, we are producing it much faster, by many orders of magnitude, than it is forming and migrating into reservoir rocks. If oil was renewable on a human time scale, oil reservoirs wouldn’t exihibit decline curves… and all oil reservoirs eventually exhibit decline curves.

            Peak Oil is just a mathematical approximation of a decline curve on a regional or global scale. It’s a logistic function. Generally speaking, the peak rate of oil production coincides with the point in time at which half the total recoverable resource has been produced.

            Over the past 150 years, we’ve produced about 17% of the best current estimate of the total technically recoverable oil on Earth. If that entire resource became economically recoverable, we would be about 1/3 of the way to “Peak Oil.” However, the estimated technically recoverable resource has grown over time as technology and our understanding of total petroleum systems have improved.

            Basically, “Peak Oil” is both real and largely irrelevant, like EROEI and the Social Cost of Carbon.

  17. Excellent analysis of benefits correlation to emissions. It should also be noted that this type of analysis of CO2 emissions costs cannot be done as the assumption that human emissions are responsible for the recent rise in CO2 in the atmosphere is not defensible. All of the projected costs are from warming due to increased CO2 in the atmosphere not to comparisons of cost growth to emission growth.

  18. Radical concept bordering on heresy. Fancy considering the benefit of using fossil fuels and carbon dioxide when considering how we should meet society’s needs!

  19. Great post Willis.

    The benefits of carbon, liberated from fossil fuels, are never factored into the cost-benefits ratio of proposed decarbonization schemes. On top of that, they refuse to apply a real world discount rate, which zeroes out the social cost of carbon, without even considering the benefits.

  20. Figure 2: subsidy per barrel of oil equivalent, nuclear 2.58, renewables 28.42

    Imagine where nuclear would be if even half of the subsidy given to renewables had gone to nuclear. The nuclear “opportunity cost” if you like. Fourth generation plants already under construction, many GWatts of safe and carbon-free energy in the pipeline. But no – we chose to bludgeon and burn birds 🦅 to death instead by massive build of solar and wind.

    If one is serious about “decarbonisation” then there are only two options, no others. Nuclear ☢️ or genocide 💀. Therefore it is in the vital interest of every person and especially their descendants to observe the attitudes of the ruling class to nuclear. Their lives / our lives depend on it.

    • 1. “Imagine where nuclear would be if even half of the subsidy given to renewables had gone to nuclear.”

      2. “… many GWatts of safe and carbon-free energy in the pipeline.”

      1. Subsidise Nuclear? If nuclear is cheaper than coal for electricity generation then it could be used, but without subsidy. However, high pressure water reactors do have the potential to be extremely unsafe when things go wrong. (Fukushima)

      2. What are the benefits of carbon-free energy?

  21. I don’t think you are really calculating a social benefit of carbon dioxide, you are just calculating a social benefit of energy. The GDP/CO2 historical relationship only exists because the vast majority of energy has been produced via fossil fuels, but that doesn’t mean that this is a benefit of emitting carbon. The economy would have been indifferent to whether the energy was produced with or without CO2 at a given price. You can’t give CO2 credit for all economic growth. It’s affordable energy that drives economic growth.

    I think a better way to calculate social benefit of CO2 is to first determine how sensitive GDP is to energy prices, not CO2. The gap between expected GDP in a fossil fuel heavy (and thus a low cost energy environment) vs an all renewable (and high cost energy environment) can then be attributed to the social benefit of CO2. In your analysis, you are basically assuming that GDP is zero in a zero CO2 environment, which obviously would not be the case (though of course GDP would be drastically lower).

    • That was my thinking, too.

      But I agree with Mr. Eschenbach on the CO2-fertilization part.

      And on the other side of the ledger, the cost of temperature change is almost certainly overstated–and may even have the wrong sign. See Oren Cass at https://www.manhattan-institute.org/download/10986/article.pdf:

      “Much of the estimate stems
      from temperature increases in northern cities such as
      Pittsburgh, Detroit, and New York, with forecasted
      heat-related mortality rates of 12.8, 9.2, and 8.9 per
      100,000. Yet southern cities such as Phoenix, Houston,
      and New Orleans, which were already hotter in 2000
      than northern cities are predicted to be in 2100, had
      mortality rates in 2000 of only 0.2 per 100,000 (see
      Figure 2).”

    • You are correct that Willis is calculating the social benefit of energy. He is measuring it in terms of CO2 emitted to produce that energy. Since almost all energy is derived from fossil fuels, it is valid to describe it as the social benefit of CO2 emissions.

      • No it is not valid. It is only valid to attribute GDP gains from the price difference between CO2 and non-CO2 sources. Would an all nuclear/solar/wind economy have zero GDP?

    • I agree. If we build more nuclear, and then carbon fuel’s use goes to zero, we get an infinite social benefit of carbon? I don’t think so.

      Otherwise and excellent essay.

  22. So Willis,
    what I have taken from this is that the dollar amounts tauted by the CAGW proponents, which often show the comparison of the subsidies as almost on par with each other – is for the different energy sector itself.
    YOU are showing it as an equivalent amount per amount of energy produced – is that correct?

    THAT makes for more sense to me now, for my head would do a bit of a spin when confronted with the almost on par comparisons – it just didn’t seem ‘correct’ and now if I have this right, WHY it didn’t seem correct.

  23. The first graph shows primary energy consumption. But can we rely on those figures given that the graph is produced by BP who have a vested interest.?

  24. Pine seedling growth under elevated CO2 (eCO2) in O.P. Fig. 7 is misleading because mature plant growth under naturally occuring variables is not continuously so linear behaving. The pictured differences are more instructive for indicating that eCO2 impacts plant hormones’ (phyto-hormone) expression &, by the way, these phyto-hormones are not constantly linear performers.

    • For example here is an expanded quote compilation: “… eCO2 can ameliorate … exacerbate…or … {have} neutral effect … {a} reduction of stomatal conductance {by eCO2} … not universal … {also} juvenile trees should be extrapolated with caution to mature … {since} inter-genotype variability … {can} change over ontogeny {what develops} … {finding} eCO2 can aggravate the effects of water deficit … {&} can constrain range of drought tolerance of species ….” As per comparative current ppm CO2 to 800 ppm CO2 tests reported in (2017) “Inter-gentypic differences in drought tolerance of maritime pine are modified by elevated CO2”; free full text available on-line, DOI = 10.1093/aob/mcz080

      This is not an attempt to refute O.P.’s basic premise. It is orientation concerning correlation pictures like Fig. 7 can instill.

  25. Here’s the social benefits of Co2 over the last 200 years. Dr Rosling shows the amazing change from 1810 to 2010 or from poor and sick to healthy and wealthy. This BBC video snippet takes just 4 minutes of your time and yet hardly any of the so called experts ever link or quote his work. I wonder why?

    But it does tell us the truth about the amazing change brought on by the Ind Rev and the wonderful bonus of using FOSSIL fuels. OH and the planet is now greening because of the extra Co2.

    https://www.youtube.com/watch?v=jbkSRLYSojo

    Another Rosling video tries to stop people being so ignorant about our planet. This TED talk and large audience try to answer a few simple questions, just watch the first 5 minutes and see them try and beat the chimps. I don’t think Willis will have much trouble finding the correct answers.

    • Rosling has some very good points and his book, “Factfulness: Ten Reasons We’re Wrong About the World–and Why Things Are Better Than You Think” is well worth reading. HOWEVER, he is also a climate alarmist. I note his snide comments about climate ‘deniers,’ his rather extravagant admiration of Al Gore and of ‘activists’ of many kinds.

    • https://wattsupwiththat.com/2018/11/14/factfulness-a-book-review/#comment-2517653

      Bob T wrote:
      “First, let me warn you that Hans Rosling firmly believes in human-induced global warming/climate change.”

      If Hans Rosling believed that human induced global warming and climate change are catastrophic problems, then I have a big problem with that.

      Having studied this subject since 1985 and having written on it since 2002, it is my considered opinion that anyone who believes in catastrophic global warming and climate change is (at best) incompetent.

      A careful examination of available data according to the scientific method provides no evidence to support the catastrophic human-made global warming hypothesis, and ample evidence to disprove it.

      In fields such as engineering and health sciences where results matter, and where errors can result in the human deaths, it is insufficient to have a pretty methodology when your results are dead wrong. The only thing that really matters in this critical fields is that you get the answer correct the first time.

      The errors and frauds that abound in climate science have caused great harm to humanity and the environment. Tens of trillions of dollars of scarce global resources have been squandered on this alarmist nonsense. Properly allocated, these trillions could have saved tens of millions of lives and greatly reduced human suffering.

      We published in 2002 that the global warming crisis was a false alarm and that green energy would fail to replace fossil fuels. Nothing has changed since then.

      Global warming alarmism is the greatest fraud, in dollar terms, in the history of humanity.

      Post script:
      I am dictating this note so I apologize for any typos.
      __________

      I disagree – the problem with the CAGW religion is that its adherents insist that you act according to their rules. It is the ultimate evangelical religion – that insists that you must convert to its mantras and it vilifies and persecutes you if you refuse to accept its hysterical nonsense.

      Read Alinsky’s “Rules for Radicals” – that is their playbook.
      __________

      Hi Kip,

      I wrote:
      “IF Hans Rosling believed that human induced global warming and climate change are catastrophic problems, then I have a big problem with that.”

      If one does not have the interest or the skills to research an important subject before publicly opining on it, then the responsible opinion is “I do not know”.

      It is irresponsible, especially for influential people, to opine on a subject as important as global warming alarmism without doing their homework.

      For the record, “doing your homework” means examining the available evidence according to the scientific method. It is not “Oh well, my friends think this so therefore I think this too”.

      Global warming alarmism has cost trillions of dollars and millions of lives. It is extremely harmful and it is the greatest scam, in dollar terms, in the history of humanity.
      __________

      Repeating from above:
      “In fields such as engineering and health sciences where results matter, and where errors can result in the human deaths, it is insufficient to have a pretty methodology when your results are dead wrong.

      The only thing that really matters in these critical fields is that you get the answer correct the first time.”

      Several times in my life, I’ve had to take rapid action that resulted in the saving of lives – from one to many. Fortunately, I was correct in my situation analysis and I was able to take the proper corrective action.

      In each of the situations, from one to many people had the same analytical opportunity but made an erroneous conclusion as to the outcome.

      I am unimpressed by pretty theories that result in catastrophic outcomes. This is the case with CAGW (global warming) alarmist nonsense.

  26. Anyone who believes that CO2 is a dangerous poison, should wear a gas mask to absorb there own exhalations.
    Wouldn’t need to make too many. After an activist dies from loss of essential CO2, the mask car be passed on to the next activist.
    CO2 is the active component of the body’s pH buffering system. It is not just plants that need CO2 in the atmosphere.

  27. Rayinga I didn’t say Rosling was perfect and he hasn’t ever sung for his supper, but he does understand how the Ind Rev has doubled life expectancy in just 200 years, plus all the other benefits.
    BTW China today generates 66.7% of TOTAL energy from coal ( US just 17.1%) and their average life expectancy has rapidly increased to 76 years. IEA data.
    At the death of Mao average life exp would have been about 50 and today life exp in the so called big polluted cities is about the same as the wealthy OECD. See Rosling compare Shanghai to Italy at Stats video.
    Poorer Chinese provinces have much lower Life exp.

  28. Willis,
    Your piece is a very good summary of the situation. I only have one quibble. You said, “Back in 1965, for every barrel of oil equivalent energy that we used, we got about fifty dollars worth of goods and services.
    And today, about fifty years later, we’re getting about five hundred dollars worth of goods and services out of the exact same amount of energy.”

    I question whether that really supports the claim of more efficiency, or whether it just accounts for inflation. That is, if I remember correctly, 1965 was the first year that a Corvette had a base price of over $5,000. Today, Corvettes go for well over $50,000. It seems to me that if we were using oil more efficiently, and getting more out of it, we should be able to buy a new Corvette for $500!

    • Note that on the side of the graph in Figure 4 it says that the dollars used are “constant current dollars”. This means that they are adjusted for inflation, so your issue is already included in the calculation.

      w.

      • Willis Eschenbach
        I was aware that they were in “constant dollars.” I think that you missed my point: I was questioning whether your argument actually demonstrated that we are using energy 10X more efficiently.

        • Clyde, you said:

          I question whether that really supports the claim of more efficiency, or whether it just accounts for inflation.

          Since it is in constant dollars, that means dollars adjusted for inflation. So it is NOT inflation.

          Best regards,

          w.

  29. I love Climate Pseudoscience where stupidity analysis follow stupidity analysis.

    You can not calculate the Social Cost of a ton of a greenhouse gas because you can not separate out the exact effects it has on so many things from temperature change, damage risks, agricultural change, enviromental damage etc there are just a bunch of really wild guess numbers. Then you have a consumer in country X, who the cost must be worked for person in country Y. There is no direct way to equate the living standards and enviromental costs because you need both country X & Y to equate all things the same.

    If you really think you can do it tell me what the compensation should be for loss of an arm to any person on the planet.

    In Australia the prescribed minimum compensation numbers are
    Loss of arm at or above elbow $191,682.00
    Loss of arm below elbow $170,384.00

    It will be different in any given country and in some 3rd world countries it will be tiny. That is because we don’t have a world wide consistent view of the cost on a person or there parts.

    So even trying to attribute a Social Cost of something that costs someones arm can only be done on a country by country basis, you simply can’t do it on a worldwide basis. So when someone talks about a worldwide Social Cost of carbon you know they are dribbling rubbish.

  30. I read many doom and gloom forecasts about potential opportunity cost consequences if we dont act to reduce CO2 emissions. I dont see the same consequences included in mitigation strategies if the money was spent on other noble causes..eg poverty reduction or cheap electricity availability…lack of leading to conflict, exploitation, etc. It seems to me, regardless of the scientific truth of CAGW, the priorities for where to best spend limited funds is not well applied.

  31. So if CO2 has increased plantlife by 10%, does it not stand to reason that tne amount of fuel available for wildfires has also risen by 10%. So when the leftist say that fires are getting/will get worse they are actually correct?

    • Yes, bushfires are getting worse. It’s happening because the leftists won’t allow proper management practices, such as clearing fuel loads from the land through controlled burning.

  32. I thought that the article was a brilliant one, clearly showing the one sided attitude of the Warmers. Obviously every event about anything has both a good and a bad factor. Hitler for example did a lot of good for Germany right up to 1939. Then he or as some say, his double, seemed to be crazy with his ideas of doing what Napolian failed to do.

    MJE

  33. Re. wild fires, or as we say Bush fires are getting worse. Well that depends if the Greens control things.

    I have brother who lives next to a wild reserve, there is lots of timber on the forest floor but the locals are forbidden to collect it, as the greens say that it has to slowly rot into the ground.

    Its the fuel load on the forest floor which makes the lightnine strikes fire far worse these days.

    MJE

    • Michael, not talking about greens controlling thing.just saying more co2 will increase fires. Based on what Willis said, they are right?

  34. From the article: “According to the Environmental Defense Fund the “social cost of carbon” is:
    … the dollar value of the total damages from emitting one ton of carbon dioxide into the atmosphere.”

    Does anyone have a list of damages caused by emitting one ton of carbon dioxide. I can’t think of any offhand. What are they talking about?

      • Thanks for the link, Willis.

        I wouldn’t have been confused if it had been called “the social cost of CAGW” instead of “the scial cost of carbon”.

        Here’s an excerpt from that link:

        “Any study of the economic impact of climate change begins with some assumptions on future emissions; on the extent and pattern of warming; and on other possible aspects of climate change, such as sea level rise and changes in rainfall and storminess. The studies must then translate from climate change to economic consequences. A range of methodological approaches are possible.”

        What this really is, is a bunch of assumptions about costs built on a bunch of assumptions about how CO2 interacts with the atmosphere (CAGW). Some of our political leaders plan to tax us based on these assumptions!

        MarkW gave a very good description of what “the social cost of carbon” is, in his post just below. 🙂

      • The problem is even when a economist tries it note the first thing you run into the problem, the initial report he rightly notes “they extrapolated his U.S. estimate to the world”. The USA is not a representative sample of the world, given the highest populations are in China you could argue that would make far more sense. This is the sort of junk social justice warriors try to pedal that every person and everything in the enviroment has some worldwide accepted value.

        To dance around the basic problems that one of the things you need to do social costs is a common market and economy. There is no such thing as an normal value for human damage or enviroment damage it varies wildly at about the same rate as valuing art. You may think a painting is worth millions and I might consider it not worth a dollar and so you can’t do a social cost on art unless you reduce to a specific group.

        Carbon social costs can only be done on a country by country basis because there is no common ground to do it beyond that because values are in the eye of the beholder.

  35. Tom A.,
    The idea is such a quagmire that no one, apparently wants to show a table or list. I did have the following thought, however.

    Let’s say a snowflake is driving along and passes a building with a chimney that has some smoke coming out. OMG! It’s carbon pollution!
    Our snowflake, not realizing the material the vehicle sends out its tailpipe and the material coming off the tires is his/her/its responsibility. Nevertheless, seeing the smoke causes said snowflake to run into a utility pole, take the wires down,starts a fire, totals the auto, and breaks his/her/its arm. As a result of this accident the snowflake needs professional counselling.
    Tally up the costs of all of the above and you get the amount for one event of the social cost of carbon.

    Be of good cheer.

    • Most of the social cost of carbon is in speculative premature mortalities, something that isn’t even a factor in GDP calculation.

  36. The control knob for social cost of carbon is the discount rate. A realistic discount rate produces a realistic social benefit of carbon.

  37. A bit of misrepresentation is in adding up the benefits in goods from carbon-based fuels. Renewable energy could potentially provide the same benefits if appropriate subsidies were provided.

    A good point is the “greening” issue being an offset to social costs of carbon. So its relatively certain the NGOs didn’t include that in their calculation of the social costs of carbon and indeed its a unique benefit of carbon. So if the $9 a ton is correct the net social cost of carbon would be alleged to be $31 a ton which still exceeds current renewable subsidies over carbon subsidies.

    In my experience a more fruitful exercise is looking at the basis of the $40. Is that supported by evidence as is the $9 of greening benefit. Most likely its made up of a good deal of “projected costs” that have never actually occurred. At least that or a more careful analysis of the greening number would be necessary to suggest. . . .uh. . . .somewhat scientifically (fiscally) if the current subsidies should be reduced or increased.

  38. In short, that red line is the sum of every kind of renewable energy we use commercially, and after years of subsidies, it’s grown all the way up to being two and a half percent of the total energy we use.

    Willis, can you please specify more precisely you find these numbers.

    The table on page nine in the full report from BP shows different numbers. Renewables are 3.6 percent in that table.

    Furthermore, in your graph oil is more than 50% of the total energy consumption, and I don’t think that is correct by any measure.

    https://www.bp.com/content/dam/bp/en/corporate/pdf/energy-economics/statistical-review/bp-stats-review-2018-full-report.pdf

    /Jan

    • You are correct about oil, it looks way too high. I broke out solar and wind from biomass & geothermal…

      Rounding to the nearest 1%, I get:
      Wind 2%
      Geothermal & biomass 1%
      Solar 1%

      Renewables are insignificant any way you slice it.

  39. Sorry Willis, this is economic garbage. Just an utter misunderstanding of economics and what “social cost” is. And I am a sceptic.

    The social cost is about externalities, costs that are not fully included in the price of something. Take aircraft noise. Yes, aviation adds huge value, I get that value when I fly somewhere and to do so I pay the price of the ticket. But the people on the ground not flying get noise. That noise is a social cost. So my ticket price should include the cost of providing noise insulation to the people on the ground, otherwise the ticket price does not include the full cost of my travel. There are not two sides that need to be taken into account, just the total actual cost of something we consume.

    We should all agree that we should pay all the costs of what we choose to do.

    We can argue about whether CO2 is an externality, how much we should charge for that and who should pay, but to claim there’s no cost because there is a bigger benefit is to absolutely miss the point. This is a wholly accepted and sensible economic argument, not an Alarmist scare tactic.

    • You picked the wroooooong example!!!

      Take aircraft noise. … That noise is a social cost. So my ticket price should include the cost of providing noise insulation to the people on the ground, otherwise the ticket price does not include the full cost of my travel.

      The reason this sets me off you have caved to another special interest group!!! You see, THE AIRPORT WAS THERE FIRST!!! 99.9% of the residents living under the approach pattern of an airfield bought their home after the airfield was up and running in full operation! And likely got a discount on the home because of the proximity of and potential noise from the airfield. And then, 40 years down the road, there get to be enough residents, usually spurred on by an ambulance chasing lawyer, who band together, file suit against the city, show up at city council meeting waving signs and making a lot of noise (but only when the camera is pointed at them and the “community organizer” directs them too) demanding their “externality” payment, which they already received in the reduced price of their home, and you can depart for vacation on some Caribbean isle with just a 10 minute drive to begin it. It starts to sound like extortion, doesn’t it?

      Which is exactly right where we are with the so-called Catastrophic Anthropogenic Global Warming!!! You heated your house, you already got your “externality” payment! You cooled your house through a long hot summer, you already got your “externality” payment! You kept your pool clean and pretty and fit for you to dampen your darling little tooshy in any time you choose, you already got your “externality” payment! Enough with the wealth envy already, quit trying to claw down those who had vision and worked hard to achieve something, and go make your own pile of money for lazy people to envy! All your proposed “solutions” only make it harder for you yourself (I’m talking to you, poor people like me who have a vision and may some day get up and do something about it) to be successful with your own big idea and hard work.

  40. For further reading; The Moral Case for Fossil Fuels” by Alex Epstein
    A very good read and he has several talks on youtube.

  41. Willis – regarding this statement:

    “Back in 1965, for every barrel of oil equivalent energy that we used, we got about fifty dollars worth of goods and services.

    And today, about fifty years later, we’re getting about five hundred dollars worth of goods and services out of the exact same amount of energy.”

    For this comparison, are the dollars adjusted to compensate for inflation? A consumer price index (CPI) adjustment would be appropriate.

  42. Nice piece of work, Willis.

    I suggest another way to look at this will be helpful.

    “The current central estimate of the social cost of carbon is roughly $40 per ton”

    This, as anyone who investigates it’s origin knows, comes from a thumbsuck by the US EPA. It not based on something real. It is a “needed outcome” based on justifying certain subsidies.

    More on target is the use of the term “opportunity cost” which refers to what you give up and what you get. Every economic decision involves an opportunity cost because the investment of resources could have been otherwise employed.

    What you have described is in a way, it’s inverse. By starting with the “cost of carbon dioxide emissions” you can reasonably invoke the metric “the opportunity gain”, rather than the opportunity cost.

    By “stopping” the emission of a ton of carbon dioxide, there is the gain, supposedly, of a cooler world, or at least a not-warmer one. AGW supposes a colder world is better because the intention is to “cool it by one degree”. There is absolutely no evidence for this benefit but let’s let that ride for the moment.

    So the opportunity gain is a lack of warming. Your argument is that the opportunity gain is so small, compared with the opportunity gain of using the fuel effectively, it is not worth changing horses.

    If analyzed conventionally using the opportunity cost comparison, the loss of the “cooler world” is counterbalanced by the gain of modern civilization. It is obvious that those who are calculating the “social cost of carbon” are including more than the economic cost (because it would otherwise be a small number). It is only valid for informing policy i
    f the opportunity gain is compared with the opportunity gain of the alternative choice.

    It has been pointed out on the hallowed pages of WUWT that the economic cost anticipated of “doing nothing” about “global warming” is about one per cent of the benefits of fossil fuels.

    We could use the next century developing brilliant energy generation inventions and creating an electrically powered world. Fossil fuels could be used for making fertilizers and plastics as they dribble into our hands.

    The opportunity gain is mighty and in the case of AGW, the cost speculative and small. This assessment is supported by dozens of scientific assessments and the trends in relevant measurements.

  43. Willis wrote:

    “You could think of the economy as a giant machine that turns energy into goods and services.”

    Spot on. Karl Marx concluded that everything can be reduced to labour, and capital was a form of stored labour. This is, of course, incorrect as it does not admit that energy exists in any form other than labour. Finite fossil fuel means finite fossil fuel energy. It therefore has a value outside that of labour.

    All good and serves can also be described in terms of energy, including human labour. Energy is managed by human labour, and labour is not the source of all the energy in the final product.

    Making the production of some function “more efficient” can be described on many ways, but making it more energy efficient, including reducing the amount of human labour involved, is one. The “ephemeralisation” of technology, a term coined by Bucky Fuller, is energy efficiency on a grand scale, without prejudice.

    There was a tiny hubbub when the UK had an increase in GDP a couple of years ago with a drop in total energy consumption. That is what Bucky F was talking about – decoupling energy from GDP. It is possible. It is also desirable, but it is not the end of all discussion. Discovering new ways to generate energy, particularly electrical energy, is going to go on forever, thankfully.

    Plentiful energy allows us to recycle limited supplies of resources. Perhaps it will allow us to manufacture all elements at will and in quantity. I don’t limit the future. In the next half a million years we will move far beyond this “hunter-gatherer” form of energy generation.

  44. Where are the peer reviewed studies that investigate the benefits of more CO2 in the atmosphere? I also notice the usual alarmist critics are deathly silent on this post. I wonder why?

  45. Willis

    https://www.eia.gov/analysis/requests/subsidy/pdf/subsidy.pdf
    “Figure 2. Average US subsidies on various fuel sources.
    Figure 2 shows the subsidy per barrel of oil equivalent energy (BOE). For energy from oil and coal, the subsidy is trivially small. For nuclear, it’s larger, but still reasonable, since nuclear energy is dispatchable reliable baseline power.”
    You obviously did some serious sums on the data referenced in fig 2. Would you care to say how these subsidies were calculated? What subsidies were included – loans, tax breaks, etc?

    Did you for example use the thermal to electricity conversion equivalent – around 30%
    Thanks

    • Good question, Ford. I used an average of the three “Total” figures from each of the first four columns of table 3 from your link, and divided them by the average energy usages per fuel type in BOE for the relevant years from the BP spreadsheet.

      w.

  46. Willis your fig 2 gives a reference to a pdf. The data in the form you use is not present in that doc. Can you please confirm the methods used to compile your fig 2?
    E.g. is the efficiency of conversion to electricity -30%- taken into account for thermal generators? What benefits are taken into account in your workings – taxes, special loans, etc.?

  47. Willis your fig 2 gives a reference to a pdf. The data in the form you use is not present in that doc. Can you please confirm the methods used to compile your fig 2?
    E.g. is the efficiency of conversion to electricity -30%- taken into account for thermal generators? What benefits are taken into account in your workings – taxes, special loans, etc.?

  48. This is really going to get some commentators worked up but it is on the theme of divestment from fossil fuel companies. This article seems to be making the assumption that the benefits outweigh the costs of CO2 emissions. However, I vehemently disagree – as do many large investment concerns like the Norwegian Sovereign Fund that have now decided to divest their holdings in fossil fuel companies, citing the evidence that they see increasing CO2 emissions as being detrimental to the long-term sustainability of the planet: https://mankindsdegradationofplanetearth.com/2018/12/17/at-last-divestment-is-hitting-the-fossil-fuel-industry-where-it-hurts/

    On another point, I want to address the so-called “greening” of the planet that the author cites as a positive, using the must-used example of plants growing in a greenhouse. This is a complete fallacy that has to be shot down here and now: https://mankindsdegradationofplanetearth.com/2018/12/14/what-is-the-so-called-c02-greening-effect-and-is-it-beneficial-in-the-long-run/

    • What exactly do you suppose is the source of the Norwegian fund? Deep sea oil of course. This is a pure diversificatiin play mixed in with a little pr for the plebs who buy doublespeak at face value.

    • Ivan, when the time comes that you stop using fossil fuels in all of their forms, including food grown by fertilizers and most kinds of plastics, I’ll take you seriously.

      Until then you are just engaged in meaningless virtue signaling.

      As to Norway, they are utilizing a huge hydroelectric resource, so they can afford to pretend to be virtuous.


      w.

    • Golly Ivan, greenhouse effect alarmists seem to have a lot of problems with greenhouses. Why do you think that is?

      • Read the link Bill about the flaws in the theory of the “greening effect”. To quote the example of plants thriving in a greenhouse as replicating that of planetary vegetation thriving with increased man-made CO2 emissions is absurd. Just another sceptic fallacy – and you know it 🙂

        • There is no question that more CO2 both accelerates growth and increases drought resistance. That is established by empirical science and its not going to be overturned by a computer model.

    • Ivan Kinsman December 16, 2018 at 11:59 pm

      On another point, I want to address the so-called “greening” of the planet that the author cites as a positive, using the must-used example of plants growing in a greenhouse. This is a complete fallacy that has to be shot down here and now:

      “So-called greening”? Ivan, you neet to get out more. Here’s NASA on the question.

      Carbon Dioxide Fertilization Greening Earth, Study Finds

      From a quarter to half of Earth’s vegetated lands has shown significant greening over the last 35 years largely due to rising levels of atmospheric carbon dioxide, according to a new study published in the journal Nature Climate Change on April 25.

      In geological times CO2 was much higher … and life flourished.

      Go figure.

      Regards,

      w.

  49. Great post.

    Were the Idsos work the source for Fig 7?

    Also, source of: “Now, the best estimate is that to date, the increasing levels of atmospheric CO2 have increased global plant growth by about 10%.” (?)

  50. Outstanding post, Willis. One question: what are the subsidies for fossil fuels? I’m not aware of any, but you are a data hound who could find any that exist. Also, the only nuclear “subsidies” of which I’m aware are indemnification for casualties and property destruction due to a nuclear accident. Experience in the United States is showing more and more that there will never be a claim, so that the contingent liability this indemnification represents is far from the usual concept of a subsidy.

  51. Is it the more fossil fuels we consume, the wealthier we are, or the wealthier we are, the more fossil fuels we consume? Probably a combination. And the cheaper the fuel, the more liable we are to waste it.

    The gain in efficiency Willis assumes from GDP and fossil fuel use doesn’t take into account that the U.S. has been moving toward a service economy.

    Subsidies for renewable energy are an investment. It’s analogous to subsidizing the construction of power plants and a grid where they don’t exist. The benefits accrue over time, with low-cost, pollution-free energy. Renewables have also provided hundreds of thousands of jobs. Of course, solar energy installation has become more expensive due to Trump’s tariffs – perhaps the stupidest tariff he enacted unless seen from the perspective of helping the fossil fuel industry. (I don’t advocate abandoning fossil fuels, I advocate diversifying our energy sources, improving efficiency, and practicing conservation.)

    Much of the subsidies for renewables were part of the Recovery Act, and in 2016 had decreased to less than half what they were in 2010 and 2013. “. In FY 2016, tax expenditures alone accounted for 80% of total renewable energy subsidies. Direct expenditures decreased 90% from FY 2013 to FY 2016, largely as a result of the expiration of the Section 1603 grant program. ”

    Renewables in 2016 provided about half the electricity of coal, and a little less than that of oil. The annual growth rate since 2000 was 3.3%. This kind of change necessitates investment in infrastructure. In the long run it’s to our advantage to diversify our energy sources. Taxes will pay into the public coffers over time, long after the initial investment.

    Biofuels accounted for 42% of the subsidies from 2010-2016. In 2016 the tax credit to biodiesel producers was more than twice that of any other kind of renewal subsidy.

    “The Energy Investment Tax Credit (26 U.S.C. 48). The ITC, also referred to as the Section 48
    credit, is the sole federal tax credit currently available to commercial solar facilities.” It’s been around since the 1970s at 10%, was temporarily set in 2005 at 30% until 2019, then is set to go back down the 10%. ” The credit for residential energy efficient property, also worth 30% of investment costs, was subsequently established for individual (residential) owners of solar and other end-use equipment. This latter credit reverted to zero at the end of 2016″ It’s TEMPORARY. An INVESTMENT.

    I don’t see where Willis got his BOE figures from his source. I’ve gone through the document. Did I miss it?

    If fossil fuels are so cheap, why should they be subsidized at all? Why should Americans pay for oil exploration that doesn’t yield any oil? Isn’t that part of the overhead of oil production?

    This is a disjointed post. Sorry.

    • Kristi – I see that you take the position on fossil fuels: “I don’t advocate abandoning fossil fuels, I advocate diversifying our energy sources, improving efficiency, and practicing conservation.”

      My stance exactly. Many US sceptic commentators on this site automatically assume that anyone who criticises current fossil fuel consumption wants to see them banned completely – seeing any opposer as a radical green leftie environmentalist who would like to see 100% energy coming from renewables.

      With the current population of 7 billion forecast to rise to 10 billion this is an impossible goal and fossil fuels will always remain in the energy mix for many countries. However, diversification of energy sources is the key here and, as such, the more renewable energy can replace fossil fuels the better. Poland, for example, where I live is heavily dependent on coal – which makes up an very large proportion of its energy mix – but is investing heavily in renewables and so the percentage of coal burning will decline over time http://delano.lu/d/detail/news/can-poland-wean-itself-coal/198638

  52. It’s also worthwhile to consider that, depending on the discount rate that you use, the $40/ton SCC can become a social benefit of carbon. The Obama admin’s Interagency Working Group refused to model SCC using a 7% discount rate, which is one of the discount rates recommended by the OMB. Look at the work of Kevin Dayaratna at Heritage for more on this – https://docs.house.gov/meetings/SY/SY18/20170228/105632/HHRG-115-SY18-Wstate-DayaratnaK-20170228.pdf

    Notable quote: “Under a variety of assumptions, including those made by the IWG itself, one of its three predictive models shows that the SCC has a non-trivial probability of being negative. This would suggest that there are actually benefits of CO2 emissions.”

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