Guest essay by Eric Worrall
President Biden has raised the social cost of carbon from Trump’s $8 / ton to the Obama level of $51 / ton. But the real sting is the price tag to be applied to methane ($1500 / ton) and nitrous oxide from fertiliser ($18,000 / ton). And the price may rise – this price rise is seen as an interim measure.
Biden hikes cost of carbon, easing path for new climate rules
The social cost of carbon could have ripple effects throughout industry.
By LORRAINE WOELLERT and ZACK COLMAN
02/26/2021 04:57 PM ESTPresident Joe Biden on Friday restored an Obama-era calculation on the economic cost of greenhouse gases, a step that will make it easier for his agencies to approve aggressive actions to confront climate change.
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The interim figure — $51 for every ton of carbon released into the atmosphere — is well above the $8 cost used under former President Donald Trump, who declined to factor the global impacts of climate pollution into his calculation. It’s on par with a price based on analyses undertaken between 2010 and 2016 under former President Barack Obama, whose administration was first to calculate the figure known as the social cost of carbon.
The price point is temporary. A new Interagency Working Group on the Social Cost of Greenhouse Gases is required to issue a final number by January.
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The Interagency Working Group, led by the Council of Economic Advisers, Office of Management and Budget and Office of Science and Technology Policy, must issue recommendations on incorporating the cost into government decision-making and budgeting by September and deliver a final number by January.
The working group, in Friday’s notice, said it was “appropriate“ for federal agencies to revert to the Obama-era values, even though “new data and evidence strongly suggests that the discount rate regarded as appropriate for intergenerational analysis is lower.“
The group set a $1,500-per-ton cost for methane emissions and $18,000 for nitrous oxide.
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Read more: https://www.politico.com/news/2021/02/26/biden-carbon-price-climate-change-471787
Full details of the new prices are available on the White House website.
The social cost of carbon is not a carbon tax, it is used as a reference number to inform regulatory decisions about new pipelines, and may in time be used to “justify” a new carbon tax.
The Methane emission cost of $1500 / ton potentially paves the way for enormous fines next time a pipeline blows out, but we already knew Biden wants to kill off domestic fossil fuel production.
The $18,000 / ton on nitrous oxide could be a significant new cost for farmers.
We live in an age of food abundance because farmers apply 10s of kilograms of nitrate fertiliser to every acre of their land, every year. If increased costs or regulation pressure farmers into cutting back on nitrate fertiliser application, the result could be less abundance.
No doubt any resulting food or energy shortages will be blamed on climate change.
Update (EW): A few commenters have questioned the link between nitrate fertiliser and nitrous oxide. The link is, when you apply nitrate fertiliser to a field, a percentage of the fertiliser mass is converted by bacteria or other processes into gaseous nitrogen compounds, including ammonia and nitrous oxide. Most gaseous compounds of nitrogen are powerful greenhouse gasses.
Social costs are for socialists.
So, the first step in destroying agriculture in America. Peeps? Best be buying up miraclegro and other widely available fertilizers cuz they ain’t gonna be widely available much longer. We are going top have to feed ourselves in the not to distant future and you city people will be well and truly screwed.
The terminally stupid are going to kill us all if we don’t stop the insanity.
And yet, magically, the economy will “boom” under Biden and all the stimulus, infrastructure, kick-starting, and earmarked budget spending. All without a breath of inflation.
This is already re-starting the Obama stagnate New Normal Nothing Economy where consumer prices begin accelerating along with Biden keeping American workers on unemployment as millions of cheap labor “migrants”, etc., flood the nation. Oh, and then let’s raise the minimum wage of the former illegals to, say, $30/hr, graded on family size. Along with ending American energy independence and …
What is so fascinating about American politics of this century is acceptance by so so many voters for the creation of the socialist Unicorn Land using fascist techniques to impose fiats. All the while blaming some real estate guy from a network TV show. One supposes they feel your pain?
When the economy takes a dive, it will be interesting to see how the MSM and socialists (I repeat myself) spin the event. They will probably blame it on the previous administration. After all, when the economy does well when a republican takes office, the MSM always gives credit to the previous democrat administration. They actually think that they are fooling everyone.
You charge fifty a ton, and what do you get
A ruined economy, and everybody in debt
Saint Peter don’t you call me ’cause I can’t go
I owe my soul to the likes of Al Gore
As always, never a discussion of the overwhelming social benefits of carbon which trumps the social costs by many times as history supports for well past the last two centuries.
Imagine a world where there was no concern about the social cost of pollution from fossil fuels, and no correlation between CO2 and devastating climate change.
The world would continue to expand its use of fossil fuels. Developing countries would reduce the cost of energy from fossil fuels by not installing the expensive, ‘sate-of-the-art’ emission controls. Miners in coal mines would continue to suffer from lung diseases, and the general public in congested cities would also suffer health problems from pollution and smog.
As the demand for fossil fuels increased, and all the natural disasters such as floods, droughts and hurricanes were addressed by building secure homes and infrastructure, involving huge amounts of fossil fuels for heavy equipment such as bulldozers and trucks, and the building of dams, and so on, then at some point we would reach a scarcity of fossil fuel resources, and the world economy would collapse.
Investing now into research for alternative energy supplies has a sensible aspect. Creating a scare about the harmful effects of CO2 emissions is a political ploy to encourage the development of alternative energy supplies so we will not face a massive economic crisis in the future, say in 50 year’s time, due to dwindling fossil fuel reserves.
One might think the alternative Nuclear Power would be a better option, but the potential disasters that might occur if there were tens of thousands of nuclear plants around the globe, in undeveloped and/or corrupt countries, is even more worrying than the worst ‘natural’ climate disasters.
Pure, unadulterated bollocks.
So your solution is for everyone to sit down in the dirt and die. You first, show us the courage of your convictions.
Why would you think that? Have you tried using your imagination?
My solution would be to exploit our current reserves of fossil fuels in the cleanest and safest way that modern technology allows, whilst at the same time spending more money into research on alternative energy supplies to avoid an eventual economic collapse, due to dwindling fossil fuel reserves.
That’s the problem, you have used so much imagination that the world your envision has no relationship with the world the rest of us live in.
Every thing you have written is wrong, and the conclusions you reach are just standard left wing pablum about how the self annointed elite need to run the world because the rest of us are just too stupid to figure it out on our own.
One fairly reliable way to determine who is right or wrong is whether or not the response is in the form of an Ad Hominem attack.
The Ad Hominem is a very common response from someone who feels very uncomfortable when another person’s comment might make sense and be true, but feels as though it is against their belief system. Instead of debunking the argument by presenting reliable evidence and/or a rational counter-argument, the person responds with an Ad Hominem, thus confirming that he is the one who is wrong, but is unable to admit it.
It’s a shame this site is so full of Ad Hominem attacks. The articles presented for discussion are usually interesting and informative, but the responses by some posters have no value, except to confirm that those posters are dogmatic and set in their ways, just like Climate Change Alarmists are.
Pointing out that everything you wrote is wrong, is an ad hominem?
Words from the mind of an ignorant child !!
So manys points of ignorance , its hard to count them.
The social benefits from fossil fuels FAR OUTWEIGH any imagined social costs, by MAGNITUDES
Modern society would not exist if not for Fossil Fuels
Modern coal fired power has very little real pollution, and are put far outside any capital cities.
And then there is your idiotic ACDS thinking CO2 causes “climate change”
Its all a load of BOLLOCKS, created for simple-minded feel-good cretins like you.
“So many points of ignorance , its hard to count them.”
Wow! Your counting skills must be so very low. That’s unbelievable.
The claim that our fossil fuel reserves will last a very long time is based on the current rate of usage. As the less developed countries continue to develop, the ‘rate of use’ of fossil fuels would dramatically increase, in the absence of alternative energy supplies. Is that difficult to understand? Are your ‘counting skills’ up to the job?
However, an even bigger problem might result if the current political scare about the consequences of CO2 emissions were to cease. Imagine what might result if the Media were to change its paradigm, and instead of reporting every disastrous weather event as unprecedented and a consequence of AGW, they instead reported that the event was natural and that worse events had occurred in the past, and that such natural events could get worse in the future because we know from history that past civilizations have been destroyed by rapid changes in climate.
Wouldn’t more people, like Greta Thunberg, then start panicking? Wouldn’t people start demanding that their governments spend more resources in protecting homes and infrastructure from floods and hurricanes? Would there perhaps even be lawsuits initiated against governments which had allowed homes to be built in flood plains, despite those governments having the historical records showing that such areas had been flooded many times during the past 200 years or more?
If governments world-wide began building more dams to reduce flooding, contouring the landscape to improve drainage during heavy downpours in suburban areas, introducing strict regulations to ensure that homes could withstand the forces of hurricanes, in areas where hurricane have occurred in the past, wouldn’t the use of fossil fuels escalate? Wouldn’t the cost be prohibitive, especially in less developed countries?
Many AGW skeptics point out the huge cost of moving towards renewables, the spending of trillions of dollars on the development of better solar panels and batteries, and so on, and the subsidies to encourage such development. And that is true. Energy costs have increased dramatically in countries that have seriously tried to reduce their CO2 emissions, such as Germany.
However, what do you think the cost would be to successfully adapt to any changing climate in a particular area, and protect all citizens throughout the world from the recurrence of natural, extreme weather events?
The cost would be so enormous that I suspect most governments would not be able to deal with the situation.
Vincent is just another self anointed elitist who has decided that since people don’t agree with him, that’s just proof that the people shouldn’t be allowed to run their own lives. Even if he has to trick the people into doing what he wants by using lies, it’s ok, because he’s doing it for their benefit.
No. I’m definitely not an elitist. I live a frugal life, even grow my own fruit and vegetables, spend a lot of time in nature, appreciate the benefits of increased CO2 levels, and understand that the ‘true’ cost of energy is fundamental to our security and prosperity.
Once again, Vincent demonstrates that everything he believes is wrong.
You don’t have to live high on the hog to be an elitist.
All that is necessary is that you believe yourself to be right and entitled to force everyone else to live by your standards.
So much outdated left wing non-economics it’s hard to know where to begin.
That poor countries often skip on environmental controls is already known. However it’s also not an argument for preventing them from using fossil fuels. It’s an argument for helping poor countries become not poor as quickly as possible. BTW, I love how you just assume that the people in poor countries are too stupid to know what is in their best interest, therefore you, as an enlightened foreigner will just have to run their economies for them.
As to your belief that the world is just going to one day run out of fossil fuels, that too is nonsense. What happens in the real world (you should visit it sometime) is that over time, the cheapest to access sources are used up. This causes the cost of extracting to slowly increase. These increasing costs cause people to use less fossil fuels and extraction companies to spend more money finding more fossil fuels. Both of which slow the rise in prices.
Coal mines are not the death traps that your ignorant imagination believes them to be.
Finally, we’ve got at least 400 years worth of oil and gas left, and over 1000 years of coal.
This looming shortage is just another figment of your uninformed imagination.
Your idea that you and your fellow elitists need to trick the people into doing what you know to be in the best interests is the kind of nonsense the communists routinely pull.
Everything you have written is just BS in support of an ignorant agenda.
“Finally, we’ve got at least 400 years worth of oil and gas left, and over 1000 years of coal. This looming shortage is just another figment of your uninformed imagination.”
Well, at least you’ve attempted to address some of my arguments, with a slightly reduced number of Ad Hominem attacks, so that’s an improvement.
Let’s address your point mentioned above that we have 400 years worth of oil and gas and over 1,000 years of coal. Can you provide a link? Those figures are significantly higher than what I can find on the internet.
For example, the following site addresses the lifetime of the currently known reserves used constantly at the current rate of consumption. It’s quite reasonable to assume that additional reserves would be discovered if energy consumption were to increase without the availability of renewables. But whether or not those additional reserves will match the increased rate of consumption is just speculation. There are claims that 80% of the world population lives on less that $10 a day. I don’t know if that’s true, but even if it’s only 50%, as some sources claim, the rate of fossil fuel consumption would have to increase dramatically in order to raise almost 4 billion people out of poverty, not to mention the increasing demand from those who are already reasonably well off.
Here’s the quote:
“We can calculate the life of current petroleum reserves by dividing the current reserves by current consumption.
At the current rate of consumption, the approximate lifetime of the world’s petroleum, natural gas, and coal reserves is 50 years, 52.8 years, and 153 years, respectively.”
https://www.e-education.psu.edu/egee102/node/1932
Now I’ll address your following comment:
“As to your belief that the world is just going to one day run out of fossil fuels, that too is nonsense. What happens in the real world (you should visit it sometime) is that over time, the cheapest to access sources are used up. This causes the cost of extracting to slowly increase. These increasing costs cause people to use less fossil fuels and extraction companies to spend more money finding more fossil fuels. Both of which slow the rise in prices.”
Of course the world isn’t going to run out of fossil fuels, because we are introducing renewables into the system, which will eventually become the major source of energy. The scenario I’ve described is what would happen in the absence of renewables. It’s understood that fossil fuel reserves don’t run out suddenly. It would be a gradual process of progressively increasing prices as the resources became more expensive to extract, and that would unavoidably slow down the economy, causing significant unemployment, and the reduction of the prosperity of millions of people which had been reached through the rapid expansion of fossil fuels consumption during the previous 50 years or so.
As I’ve mentioned before, the cost and availability of energy is the most fundamental requirement for any modern civilization to even continue to exist, without considering the additional cost of progress and development which, surely, we all want to occur.
Actually, this was my first response to your insanity. Though I’m not surprised that an elitist such as yourself can’t be bothered with a little thing like time stamps.
When all you look for is data that matches what you already believe, all you will find is data that matches what you already believe.
As to your refusal to accept arguments based in economics 101, I find that to be pretty common for those who view themselves as being morally and intellectually superior to the rest of humanity.
Mark,
Much of his argument is based on the economic falsity that income is stagnant as prices go up. It just doesn’t happen that way in the real world.
$51/metric ton is a tremendous bargain.
Vermont wants to use CANADIAN electric school buses, that reduce CO2 at $1617/metric ton, which is off-the-charts nuts, but the RE ZEALOTS in the Socialist Legislature want them anyway.
ELECTRIC SCHOOL BUS SYSTEMS LIKELY NOT COST-EFFECTIVE IN VERMONT AT PRESENT
https://www.windtaskforce.org/profiles/blogs/electric-bus-systems-likely-not-cost-effective-in-vermont-at
This analysis is based on only the Combustion CO2
The analysis shows the combustion CO2 reduction cost would be an exorbitant$1,617/metric ton
It would be irrational to waste federal COVID money on such a highly uneconomic CO2 reduction measure, while tens of thousands of Vermont households and businesses have, and will continue to struggle for some years.
Combustion CO2 of a Gallon of Diesel Fuel
Emissions of pollutants, such as volatile organic compounds, carbon monoxide, NOx, and SOx, would be less, in case of electric buses.
However, power plants also have such pollutants
Combustion CO2eq/gallon is 10.21 kg CO2 + 0.41 g x 25/454, CH4 + 0.08 g x 298/454, N2O = 10.285 kg. See Summary 2 table
This excludes the upstream CO2 of the energy for crude oil extracting, processing, and transporting the finished product to a user.
In case of diesel, the upstream CO2 is about 26% of the combustion CO2. See URL
https://www.epa.gov/sites/production/files/2015-07/documents/emissi…
Lifetime, A-to-Z Analysis Includes Combustion CO2 + Upstream CO2 + Embodied CO2
A much more realistic CO2-reduction analysis would be on a lifetime, A-to-Z basis.
Such analyses regarding electric vehicles have been performed for at least 20 years. Engineers are very familiar with them.
They would include:
1) Upstream CO2 of energy for extraction, processing and transport to a user
2) Embodied CO2 of expensive batteries, from extraction of materials to installation in a bus
3) Embodied CO2 of $352,500 electric buses vs $100,000 diesel buses
4) Embodied CO2 of balance-of-system components
5) Embodied CO2 of much more expensive electric bus parking facilities, with a Level 2 charger for each bus, than for a diesel bus parking facility with a diesel pump.
Any CO2 advantage of electric buses vs diesel buses would be minimal on a lifetime, A-to-Z basis.
The cost of CO2 reduction would be much greater than $1617/metric ton.
Failure to analyze on a lifetime, A-to-Z basis ignores a significant quantity of CO2
“a percentage of the fertiliser mass is converted by bacteria or other processes into gaseous nitrogen compounds, including ammonia and nitrous oxide”
Clearly, the bacteria should pay the tax, not the farmer.
These are the same people who think that you can borrow and print nearly limitless amounts of money without consequence so forgive me if I think their full if it.
The report is largely focused on economics. What discount rate to apply to expenditures now to reduce future “costs” of greenhouse gases?
It assumes all impacts will be bad:
” The SC-GHG is the monetary value of the net harm to society associated with adding a small amount of that GHG to the atmosphere in a given year. In principle, it includes the value of all climate change impacts, including (but not limited to) changes in net agricultural productivity, human health effects, property damage from increased flood risk natural disasters, disruption of energy systems, risk of conflict, environmental migration, and the value of ecosystem services” (from the Executive Summary) or
” Examples of market damages include changes in net agricultural productivity, energy use, and property damage from increased flood risk” (footnote 38 on page 32)
The major benefits of increased CO2 in the air are ignored. Agricultural productivity is at least 10% higher than it would be if CO2 were at the level of 200 years ago. Thousands of published research studies demonstrate this. Commercial greenhouses routinely add CO2 to above the level in the atmosphere for this purpose. This tangible benefit is not mentioned anywhere in the report. It likely is at least $25 per ton of CO2 emitted, based on FOA data for commercial agriculture. As noted above, this report expects that there will be a negative effect on agriculture.
The word “benefit(s)” is mentioned 64 times in the document and I could not find any place where it was about improvement of agriculture.
Likewise, since daily death rates are higher in winter than in summer in practically every part of the world, a warmer climate will reduce deaths, which must have a tangible benefit, though much harder to calculate than the agricultural benefits.
The report also does not consider how long a given gas will remain in the atmosphere. While CH4 is given a high cost, it doesn’t stay in the atmosphere very long, so the emissions now have little impact on climate even 5 years from now.
The impact of $18,000 / ton of nitrous oxide will kill agriculture completely. This man is an idiot, not using any fertilizer will stop American agriculture dead within 10 years. Perhaps he can explain how nitrogen fertilizer (essential for plant growth) can be withdrawn, and yields not become minuscule within a few years? At that price, no farmer could use anything. I suppose he knows about this? If one sells maize at $150 per tonne you can just about make money. If you sell for bio-fuel you get less money. This has already caused food shortages in various poor countries, bio-fuel has cost just as any fossil fuel does. Do the Greens think it just grows? Perhaps they are stupid enough to believe this complete lie! It will be electric tractors next!