Social Cost of Carbon


By Paul Homewood

Ken Gregory has sent me his latest paper on the Social Cost of Carbon.

If he is correct, it upends all of the arguments for spending trillions of dollars on a non existent problem:

Social Cost (Benefit) of Carbon Dioxide from FUND

with Corrected Temperatures, Energy and CO2 Fertilization

By Ken Gregory, P.Eng. May 26, 2021


Climate policies such as carbon taxes are set by governments using social cost of carbon (SCC) values calculated by economic computer programs called integrated assessment models (IAM). FUND is the most complex of the IAMs which links emissions scenarios and models of economics, climate and impacts for 16 world regions. Unfortunately, the climate component of FUND that determines temperature is flawed as it assumes that the deep oceans are instantly in temperature equilibrium with the atmosphere, without any time delay, when the equilibrium climate sensitivity (ECS) is 1.5 °C or less. The FUND model runs too warm compared to climate models.

The ESC can only be estimated using the energy balance method that compares the climate forcings to historical temperature records. The paper Lewis & Curry 2018 presents estimates of ECS with uncertainty analysis. The analysis was deficient in that the natural climate change was not considered and no correction was applied to remove the urban heat island effect from the temperature record. Making these adjustments, the likely range of ECS based on energy balance calculations using actual historical temperatures is 0.76 – 1.39 °C with a best estimate of 1.04 °C.

The energy impact components for space heating and cooling expenditures of FUND are very flawed. The change of expenditures with temperatures does not correspond to expenditure data published for the USA states. A paper by Peter Lang and me shows that a 3 °C temperature rise would decrease energy expenditures in the USA by 0.07% of gross domestic product (GDP) but FUND projects an increase of expenditures of 0.80% of GDP with non-temperature drivers held constant. A study by Dayaratna, McKitrick and Michaels (D, M & M 2020) of the CO2 fertilization effect and the FUND agricultural component shows that the FUND CO2 fertilization effect should be increased by 30%.

I have created a modified version of FUND which incorporates a 2-box ocean climate model that is tuned to closely match the temperature profile of climate models. I have replaced the flawed space heating and cooling components with new components to match the empirical heating and cooling USA data and increased the FUND CO2 fertilization effect by 30%. The social net benefit of CO2 emissions is calculated using the ECS probability distribution. The results show the net benefits of CO2 emissions are 11.74 and 8.41 US$/tCO2 at 3% and 5% discount rate, respectively.

Agriculture dominates the SCC values which are greater than 100% of the net benefits of CO2 emissions. The mainstream media is fixated on storms and sea level rise which are insignificant. The data show that climate change with the CO2 fertilization effect is quite beneficial, so policies costing trillions of dollars to reduce CO2 emissions are misguided. See the report here.

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Geoff Sherrington
June 9, 2021 6:15 am

There was never a case to ignore or underestimate agriculture gains from early estimates. In a wide view, authors who cherry picked SCC components were just as fraudulent as crooked accountants can be. They should be held legally accountable. Geoff S

Reply to  Geoff Sherrington
June 9, 2021 9:03 am

The case was to ignore obvious facts, and promote the cultural/corporate/rent-grant-seeking marxism.

Reply to  beng135
June 9, 2021 8:54 pm

Exactly, the conclusions of alarmists’ research is written first, then the preamble with the usual breathless hyperbole about the climate crisis that is supposedly happening before our eyes and that we’ve run out of time (really they get the Jehovah’s Witness Award for failed doomsday predictions). And then the middle is dreamed up, or even actual research is shoehorned inbetween, but with no real correlation with the preamble or conclusions. Like the typical IPCC report.

H. D. Hoese
June 9, 2021 6:28 am

Can’t find my copy to verify the page number but recall that this was an early realization.
Odum. H. T. 1971. Environment, Power, and Society. John Wiley and Sons.

“…potatoes made from oil… ”

Reply to  H. D. Hoese
June 9, 2021 6:35 am

potato chips are called crisps in the UK

June 9, 2021 6:34 am

The biggest social cost of carbon is the harm done to the many minds poisoned with alarmist propaganda causing many to fear the most important nutrient at the base of the food chain..

Ron Long
Reply to  co2isnotevil
June 9, 2021 7:35 am

co2isnotevil, I clicked on your + twenty times but it only went up 1.

Reply to  Ron Long
June 9, 2021 10:58 am

Yes, there is a counter on it which stops it going up multiple times. It’s a feature, not a bug.

Reply to  Ron Long
June 9, 2021 1:50 pm

If you will pay me. I’ll create a model which will prove that the count went up by +20.

Ronald Voisin
Reply to  co2isnotevil
June 9, 2021 4:27 pm


Pillage Idiot
June 9, 2021 6:39 am

Approximately 25,000 people per day die due to starvation across the globe.

No other “weather-related” category of deaths comes close.

As long as CO2 fertilization and increased temperatures are leading to higher annual production of rice, wheat, and maize/corn, then the social cost of carbon is a net positive.

Reply to  Pillage Idiot
June 9, 2021 7:43 am

Food waste exceeds the needs of anyone starving. Kimmy Jong is responsible for starvation in N. Korea – not food production.

Pillage Idiot
Reply to  Anti_griff
June 9, 2021 8:42 am

You are correct. Bad governance also results in a lot of poor people starving to death.

I thought about adding that caveat in my first comment, but wanted to keep it pithy.

Reply to  Anti_griff
June 10, 2021 7:00 am

There will always be food waste – nothing is perfect – and there will probably always be governments that prevent the most efficient distribution of food.

But there is absolutely no reason why we have to have less CO2 in the atmosphere.

Reply to  Pillage Idiot
June 9, 2021 11:19 am

And I keep banging on about the sheer number of people who die every year from a lack of clean water and sanitation, but no, let’s waste money on a non-existent problem

Pat from kerbob
Reply to  Redge
June 9, 2021 7:41 pm

Missing the point. Clean water and sanitation help keep people alive.
That is not in the program.
Besides expensive and intermittent energy they want less sanitation and clean water.
It’s the only way they will ever meet their predictions

Reply to  Pat from kerbob
June 9, 2021 9:01 pm

Catch a climate crisis true believer off guard and you’ll hear them wax poetically about how great it would be for planet Earth if one killed off most of the population, even speculating on a mechanism, like airborne ebola. The psychotics have taken over the asylum…

Reply to  PCman999
June 9, 2021 10:46 pm

It’s not even off guard, these days they are open about reducing population, although they don’t say how

I guess they#d do it the Chinese way – look how that worked out for the aging population of China*

I have the original spreadsheet from the Optimum Trust / Population Matters that clearly shows where the cull needs to (clue: all those funny little black, brown, and yellow people)

*Conspiracy alert: Maybe that’s why the Chinese flu targeted old people – they were just aiming for a way to get rid of the old, bat-eating Chinese people? (/sarc)

Christina Widmann
Reply to  PCman999
June 11, 2021 2:52 am

Psychotics and schizophrenics, too. First they demand we decrease population, then they hype a slightly-worse-than-the-flu virus up to Black Death proportions instead of letting it kill off all those bothersome old people. Which it wouldn’t have done, but they want us to believe it would have killed us all without The Measures.

Reply to  Pat from kerbob
June 9, 2021 10:41 pm

Love that response

D Boss
June 9, 2021 6:45 am

So am I interpreting this finding correctly:

The results show the net benefits of CO2 emissions are 11.74 and 8.41 US$/tCO2 at 3% and 5% discount rate, respectively.”

This means that the gov should pay me between $8.41 and $11.74 per ton of CO2 I emit from all sources?

Oh my, Liberal and Climate Cultist heads are going to explode!

So from this “green” website’s “CoolClimate Calculator”

My household emits 41 tons CO2 equivalent per year, so at say $10/ton, I am owed $410/year in “Carbon Rebates” from Uncle Sam! And wait, my 64 years on this planet, means I am owed somewhere north of $25,000 for back rebates!

But wait, if CO2 has a net benefit then there is no more “crisis” upon which to usher in Global Socialist and Marxist ideology and do some grand “reset” for elites to squash and probably kill off large numbers of the masses….

I had a business partner back in the early 1990’s who used to love making the neck veins bulge of the brainwashed at the time in social gatherings – regarding the crisis of loosing tropical rainforests by clear cutting. He used to say after one of them brought it up, “yeah I’m going to invest in buying them more chainsaws – I want to abolish winter” – which put the left loonies in apoplectic shock and was highly amusing to watch their reactions.

Reply to  D Boss
June 9, 2021 9:07 am

When I want to make liberal heads explode, I tell them that instead of being taxed, CO2 emissions should be subsidized.

Reply to  MarkW
June 9, 2021 9:06 pm

That’s not a bad idea – but I’d settle for all the taxes to be taken off fuel, and the public and private utilities forced to produce and sell energy as cheaply as possible, allowing for state of the art pollution controls (of real pollution, not co2 unicorn farts)

Christina Widmann
Reply to  MarkW
June 11, 2021 2:55 am

They’d just set oil fields on fire. Fastest way of getting all the CO2 into the air. If you want the oil refined and delivered to your local gas pump instead, you’ll have to pay for it.

June 9, 2021 7:32 am

The benefit of CO2 on agriculture is supported by the satellite data showing substantial increased greening of the planet. When one realises CO 2 is often described as plant food a positive benefit caused primarily by additional CO 2 should not be a great surprise

Ron Long
June 9, 2021 7:35 am

WATTS, the place to go for Reality Checks.

June 9, 2021 7:36 am

The social cost of no fossil fuels (carbon) would be a reduction of the worlds population of humans to under one tenth of what is is today, so there you have it.

Reply to  H B
June 10, 2021 7:02 am

That’s not a “cost” to the people pushing this scam

June 9, 2021 8:00 am

A double whammy

The new CMIP6 models aren’t much better. The following two figures reveal just how much both CMIP5 and CMIP6 models exaggerate predicted temperatures, and how little the model upgrade has done to shrink the difference between theory and observation.

So if, as we know, the climate models run way too hot, then what follows from that is utter nonsense

The FUND model runs too warm compared to climate models.

I rest my case.

June 9, 2021 8:17 am

In the interim, buffoons like this are at the controls of the United States government pushing us further LEFT and toward the abyss.

3,560 Days Left For The Planet

June 9, 2021 8:45 am

Another esteemed expert weighs in……Dr. Roy W. Spencer, Ph.D., Principal Research Scientist at the University of Alabama in Huntsville and former NASA climate scientist, gives a presentation about why there is no climate emergency and joins Michelle Stirling for a question and answer session.

The Most Important Reasons Why There is No Climate Emergency – Dr. Roy Spencer

Steve Z
June 9, 2021 8:49 am

I read the entire report by Ken Gregory, which was excellent. The benefits to agriculture from CO2 fertilization dominate the net effect in all areas of the world. Net energy consumption tends to decrease in high-latitude areas, but increase near the tropics (where air-conditioning bills would increase), but the overall decrease in GDP due to increased energy consumption is less than 10% of the benefit from agriculture. The effect of sea level rise and storms is negligible in comparison to agriculture and energy.

This analysis shows that the Club of Rome doomsayers from the 1970’s, who were claiming that population increases would lead to mass starvation, were either ignorant or deliberately lying. World population has increased from about 3.7 billion in 1970 to 7.8 billion in 2020, an increase of about 110% in 50 years. Yet fewer people are starving now than in 1970, due to improvements in agriculture, and there is more land that is forested now than in 1970.

Today’s global warm-mongers are analogous to the “population-bombers” of the 1970’s, predicting an imaginary future catastrophe as a justification for world domination by the “elite intelligentsia”, who are either ignorant of the truth or willing to suppress it to achieve their agenda.

According to Ken Gregory’s report, the benefits of increased CO2 in the air far outweigh the costs, most likely by at least a factor of 10. There is no justification whatsoever to limit fossil fuel use due to CO2 in the air (although policies should be implemented to reduce emissions of sulfur dioxides and particulates from burning coal and heavy fuel oils), particularly since the reserves are estimated as at least 650 years’ worth of today’s consumption rate. CO2 fertilization of plants and crops is the “elephant in the room” which overwhelms the “social costs” of CO2, which warm-mongers are chasing with the equivalent of an expensive golden fly swatter.

Reply to  Steve Z
June 9, 2021 1:54 pm

Since there is a lot of overlap between the energy bands of H2O and CO2, anyplace with a lot of water in the air, CO2 will have very little extra impact.
For the most part, the tropics have lots of water in the air.
The idea that CO2 is going to have a drastic impact on the temperature in the tropics is completely false.

June 9, 2021 8:51 am

Scientists are not programmers and programmers are not scientists .
Yet so many people believe in ‘models’
AI has taken over independent thought partly courtesy of the education system .

June 9, 2021 8:51 am

The ECS is zero.

Reply to  mkelly
June 9, 2021 9:13 pm

Comparing temps from 1998 to 2021 (or 1098 to 2021 even!) with the huge increases in coal, oil and gas throughout the world, any sane person would have to agree.

June 9, 2021 9:32 am

At best, the social cost of carbon is very much net beneficial. Nothing can be proven that additional warming is a threat…on the contrary, it is net beneficial as evidenced by the carrying capacity of the planet. The introduction of additional CO2 to the biosphere is responsible for the ability of the Earth to cary nearly 8 Billion, made possible by the energy density of fossil fuels which gives us a tiny CO2 boost that temporally causes atmospheric CO2 to accumulate. But it will be temporary in the scheme of things. Geological time has atmospheric CO2 reducing to below levels required to keep life alive. CO2 has slowing being reducing for millions of years, getting to lows at the peaks of glacial advances just above the limit for life to even survive. If there was any reason for humans to appear on the good Earth, it was to liberate CO2 to keep life alive for as long as humans can survive. Carbon (CO2) is Life.

June 9, 2021 9:49 am

It’s nominally CO2, CO2, CO2, but it’s carbon emissions that they detest. An actual “burden” in their religious perspective, to be planned, per chance repurposed, and sequestered for social progress.

June 9, 2021 9:58 am

Let’s suggest a new venue. There’s probably an unused convention center in Wuhan.

Rich Lentz
June 9, 2021 10:07 am

This explains why the CAGW crowd dismissed doing Economic Impact studies on CO2 decades ago and they remain un used. Worked in an industry where they were mandatory for any proposed project or revision thereof – they saved the company $Millions.

June 9, 2021 10:09 am

Oh Look. Someone has finally derived a cost/benefit ratio for the price of carbon.

Why does the government think CO2 is only a burden to be mitigated? No other natural resource is ever regarded in that way.

Smart Rock
June 9, 2021 10:22 am

The so-called Social Cost of Carbon appears to be based on wild guesses on top of faulty assumptions derived from flawed models. How could it possibly be related to any kind of reality?

And of course, like everything else in climate science, if manipulation of so-called data doesn’t produce a “bad news” conclusion, they keep re-doing it till they get the answer they want. And if they can produce a “worse than we thought” answer, they get extra coverage from BBC, Guardian, NYT, WaPo etc. etc.

June 9, 2021 10:50 am

Models do not take chaos factors into account. Therefore, they are invalid.

Reply to  Sara
June 9, 2021 11:09 am

Incompletely, and, in fact, insufficiently characterized, and unwieldy. Divergence is the rule, not the exception, outside of a limited frame of reference in an open system.

June 9, 2021 11:42 am

And the corollary: the social cost of Green.

That said, the social cost of carbon is denominated in units of diversity of individuals, minority of one (e.g. babies and other four-letter “burdens”).

June 9, 2021 12:54 pm

Did they factor this in? Did you know that after almost 50 years of development, the efficiency rate of a solar panel’s ability to convert sunlight into electricity is still only 14%? Neither did I.

Researchers develop solar cell with efficiency of 14%

Reply to  TEWS_Pilot
June 9, 2021 9:28 pm

That’s pretty low. Most cells are at 20+% and the latest designs are in the high 20s/low 30s if memory serves. I read a bit of the article but it’s late and my tolerance for climate crisis poop is very low. If you’re immune and you read the whole thing let us know why they were crowing about a measly 15%. I know there’s been a lot of noise about the increasing efficiency of perovskite cells (lower than silicon but getting closer) but at least they are a lot cheaper than silicon (but not nearly as long lasting). Maybe it’s something similar in this case.

Reply to  TEWS_Pilot
June 9, 2021 9:42 pm

I wonder if that is a typo or a record only for the material they are using? On the same page are articles talking about mid 20s % efficiencies for perovskite, dual layer, and both-sides-contacted cell types, so why the article you cited is crowing about 15% efficiency escapes me. Anyways it’s all for naught on Earth under the clouds and with the day-night rotation. One could get 6 times as energy out of the cells putting them in space, a solar power satellite. Surprised Biden’s end of the world spending spree hasn’t thown at least a bone to NASA to reinvestigate the idea.

Dave Andrews
Reply to  PCman999
June 10, 2021 7:14 am

According to clean energy reviews (March 2021) the top ten solar panels range in efficiency from 20.6% to 22.6%


Dave Andrews
Reply to  Dave Andrews
June 10, 2021 7:22 am
Last edited 14 days ago by Dave Andrews
June 9, 2021 4:37 pm

Why Social Cost of Carbon is Wrong yet used as a club to purposely mis-inform publics! It should Social Benefit of Carbon (SBC). Benefits from emissions in States and countries are growing and benefitting populations while emissions are falling.

Three lies used by the SCC liars (IWG2016) are use of the wrong discount rate, used for an inappropriate predictor two centuries into the future and failure to consider any benefits. But shown here using emissions as the sole measure carbon is a benefit. But too, use of the discount rate recommended by Obama’s Office of Management and Budget (OMB Circular A-4, A-94) of 7% on its own easily brings SCC from cost to benefit, SBC. The SCC liars use a rate of 2.5% in IWG2016. Businesses use a discount or hurdle rate 20% or more today to evaluate business ventures five years hence as large errors of uncertainty arise for analyses to longer periods.

Data on carbon emissions vs. economic benefit for Washington State shows we have been lied to by liars (stressing disadvantages) when the data shows carbon emissions an enormous benefit (Sources: US Census; US Bur of Econ. Analysis; US Energy Information Admin.).

Benefits that accrue from carbon emissions, expressed in terms of Washington
State’s gross domestic product, show economic growth expanding from $1,000 in GDP
per tonne emissions in 1980 to $7,000 in GDP per tonne in 2018, a 600%-700%
improvement. The benefit is growing, not linearly but accelerating exponentially and with a
firmly established upward trend with a correlation coefficient of 99.4%.
Second, emissions are falling on a per person basis decreasing from 11.8 tonnes
per capita in 2008 to 10.1 tonnes per capita in 2018, a 16.8% decrease.

U.S.-wide values are similar to Washington State while world values are in the range of
$4,500 in GDP per tonne of emissions.

Further, IWG2016 is infected with uncertainties as Cost Benefit Chapter in Climate Change Reconsiders explains, a perfect example of agencies “seeing like the state wants” phenomena that succumb to find what they believe their overseers want them to find. This social cost of carbon document of IWG2016, EO 13990 is now withdrawn as not providing a reliable guide for policymakers. Its analyses are saddled with immense, deep structural, and cascading uncertainties, propagation of errors, and many crucial flaws as it fails to capture any of the foundations for prediction and uncertainty, together renders its use irresponsible.

Washington State succumbed to the liars as it legislated and the Governor signed the Clean Electricity Transformation Act, 2019, to end fossil fuels, mandates wind and solar using zero carbon mythology with the liars discount rate of 2.5%. The effect: Washington legislator’s laziness, a codified IWG2016, ignorance of the economic benefits of carbon emissions cements a path to hell for this state.

June 9, 2021 5:11 pm

Here’s a very short version of the incredible improvement for humans over the last 50 years.

Human life expectancy in 1970 about 57 years and in 2021 about 73.
Yet population in 1970 3.7 bn and today 7.78 bn. That’s an increase of 4.1 bn in just 50 years.
Next our poorest continent Africa life exp in 1970 about 47 and in 2021 about 64. Yet pop for Africa in 1970 about 363 million and today pop is about 1370 million or 1.37 bn. AGAIN THINK ABOUT IT and WAKE UP.
There’s NO EXISTENTIAL threat or CRISIS OR APOCALYPSE. In fact this is the best time to be alive since 1970 or 1950 or 1900 or 1800 and our planet is GREENING. See CSIRO and NASA data since 1980s.
OH and deaths from extreme weather events have dropped by 98% over the last 100 years.

June 9, 2021 5:22 pm

The government cannot give out anything that it does not first take from taxpayers, savers and people on fixed income. They take from savers and people on fixed income by printing money which dilutes the buying power of what you have or will get. 

Mike Dubrasich
June 9, 2021 9:51 pm

This analysis, seemingly generous, greatly underestimates the benefits of carbon emissions.

First, the terminology is flawed. “Carbon emissions” are a euphemism for fossil carbon (oil, coal) usage. The benefits of petrochemicals are huge. Modern civilization would not be possible without them. Every economic sector is utterly dependent. No country on Earth operates without petrochemicals. There are no substitutes; not even nuclear power can do all the things that oil does. I estimate that 95% of the world’s GDP is based on oil. Without oil, the world’s economic output would shrink by 95%.

Second, if carbon dioxide is a GHG (many believe it to be, including so-called Luke-Warmers) the additional warmth is extremely valuable. CO2 fertilization is in the model, but the extra growing degree days are even more significant. Second and third cuttings, extra rotations, and full ripening more than double ag net incomes (fixed costs remain the same, gross sales double or triple).

The Earth is still in the Ice Ages, the Holocene is a temporary interglacial, and a severe cooling is inevitable. If that eventuality can be delayed or forestalled, the economic benefit is incalculable. Imagine what continental ice sheets covering a third of the Northern Hemisphere would cost, then put that amount in the benefit column. God bless CO2.

Matthew Sykes
June 10, 2021 12:02 am

There is no social cost, CO2 is entirely beneficial, mild warming, big increase in plant growth, including crop yields. It alleviates starvation, provides cotton and other materials, makes plants more drought resistant, reducing water demands, and allowing plants to grow where it was too dry.

What’s not to like about CO2? We should try to get it to 1000 ppm as soon as possible. The planet needs it.

Don Thompson
June 10, 2021 6:27 am

ECS of 1.04 is well below the mainstream calculation, and the US Climate Reference Stations seem to align pretty well with the UAH trends–which should eliminate the UHI effect. A set of calculations using the current 1.04, 1.7 and 3.0 ECS would create a useful comparison set. Even for the 3.0 case, I suspect that the SCC would be only mildly negative if agricultural productivity is properly considered.

The far bigger issues for environment today are overall water supplies and clean water and energy for the developing world.

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