LONDON: The US government is drastically underestimating the social cost of carbon dioxide emissions, which is 3.6 times higher than the estimate currently used to inform many of Washington’s key climate policies, a study suggested on Thursday.
Carbon dioxide is the greenhouse gas chiefly responsible for global warming and therefore negatively affects human wellbeing. US economists call this the “social cost” and they calculate it in dollars, considering repercussions such as changes in agricultural productivity, damages from sea level rise and worsening human health.
The US currently puts that cost at around $51 per metric tonne a figure which dates back to the Obama administration, adjusted for inflation.
But in research published on Thursday in the journal Nature, a team of American scientists say the reality of such damages is likely far greater, at $185 per tonne.
That’s important because “higher estimates of the social cost motivate more ambitious mitigation of greenhouse gas emissions,” said co-author Brian Prest, an economist at the non-profit Resources for the Future.
The US federal government relies on the social cost figure to inform standards for vehicle and power plant emissions and the energy efficiency of appliances. It is also used as a basis for federal tax credits on carbon capture and storage, zero emission credit payments for nuclear generators and in proposed federal carbon tax legislation.
But a 2017 report by the US National Academies of Sciences, Engineering and Medicine called out the federal government for using outdated research to calculate the consequences of greenhouse gas emissions.
The government’s social cost estimate relied on old climate models that generated global temperature changes inconsistent with those predicted by more sophisticated Earth systems models, the Nature study said. The estimate also did not incorporate a growing body of research on how climate change is expected to affect human wellbeing, it added.
The Trump administration then slashed the social cost estimate to below $10 per metric tonne. This allowed federal agencies to roll back fuel economy standards.
Last year, US President Joe Biden reinstated the Obama-era $51 social cost as a temporary measure and re-established the Interagency Working Group on the Social Costs of Greenhouse Gases.
Members of the working group did not respond to a request for comment. They are expected to release an updated social cost estimate later this year.
Prest and his colleagues hope the government will consider their research, which relies on improved socioeconomic projections, climate models, climate impact assessments and economic discounting, or the value that researchers today put on costs incurred by future generations.
Published in Dawn, September 2nd, 2022
