Laurie Johnson, Chief Economist, Climate and Clean Air Program, Washington, DC
Last week the US Office of Management and Budget (OMB) invited additional comment on the government’s “social cost of carbon” (SCC), an estimate of climate change damages resulting from carbon pollution. The invitation comes after a recent update provoked intense backlash by the fossil fuel lobby against its use.
Couching their attack in terms of process issues and imprecision in the estimate, polluters accused the Administration of secretly manipulating and inflating the SCC in order to justify stricter standards on carbon pollution. They demanded that any new clean air standards ignore SCC benefits, i.e. essentially to count any benefits of reduced climate change as zero.
While ostensibly about process and imprecision, the attack is really about stopping the Environmental Protection Agency (EPA) from implementing protective carbon standards to reduce risks of catastrophic climate change; it comes after numerous bills aimed at accomplishing the same goal failed to go anywhere in Congress.
The update did not involve any change in how the government calculated the SCC. Its estimate had been used in over two dozen rulemakings, with multiple opportunities for comment on the methodology used to derive it. The government simply replaced outdated versions of the economic models it used with newer versions, published independently in the academic literature to reflect more recent climate science.
What’s all the fuss then? Why would a seemingly routine best-practice exercise for cost benefit analysis create such an uproar?
The answer is simple: with climate science progressing rapidly and the costs of carbon pollution growing increasingly more severe and apparent, the estimate increased by approximately 50%. At the same time, for the first time ever, forthcoming rules will limit carbon pollution coming from the largest source of these emissions: existing power plants. These plants account for fully 40% of carbon pollution, representing a very large source of profits for the fossil fuel industry.
Herein lies the rub: it turns out that the SCC tips the scale against fossil fuels in favor of cleaner energy. Once you add climate change costs (as partially measured in the SCC) to the cost of electricity generation, cleaner energy is cheaper to society than dirty. If the new rules sufficiently consider climate costs, the logical regulatory outcome spells further growth in the clean energy economy and reduced profits for the fossil fuel industry.
For all the fanfare about the Administration supposedly trying to manipulate the SCC, the real concern of opponents is not process or academic rigor. It is about protecting their own bottom line, which matters more to them than our children and grandchildren’s futures.
Photo Credit: Social Cost of Carbon/shutterstock
Nice picture of steam from the nuclear plant. Steam, for those over at the NRDC is water vapor, not CO2.
Yes, steam from the cooling towers. But the skinny red and white towers could be coal exhaust; if so, the steam coming from them would indicate the use of a water-based SO2 scrubber (so there would be N2, H2O, CO2, with a bit of nitrous oxides, particulates, and mercury coming out).
Funny, fossil fuel lobbyists vigorously oppose accounting for the social cost of carbon emissions (SCC), but they don’t mind wind and solar power. Could it be that SCC is a bigger threat to them?Hint: the linked NRDC article on SCC describes a study by Yeh and Hope which used a 1.5% discount rate to evaluate SCC, and not surprisingly, found fossil fuels very expensive (high discount rates basically discount thing which happen in the future, but 1.5% is quite low). Of course they had to ignore nuclear power, which is half the cost of renewable power when we don’t discount the future, due to the long (60-80 year) plant lifetime.Normally a discount rate of around 8% is used to calculate the levelized cost of nuclear and renewable power; in this way, a nuclear kWh delivered 40 years in the future has a value which is only 5% of a kWh today, but using a 1.5% discount factor makes it 55% as valuable.
Anyone who values the scientific method should read this great article written by Dr. Bob Carter. CAGW is based on faith, not science. I put my faith in God, for everything else I demand proof. http://www.aitse.org/global-warming-anthropogenic-or-not/
The real issue here is that there are both benefits and costs to carbon, and both benefits and costs to limiting carbon emissions. In fact there are both benefits and costs to global warming. The Earth is currently in what is rightfully called a “climate optimum” where temperatures are optimal for life. What is completely buried by the alarmist crowd is that the net effect of the 0.8 deg Celsius of current warming since 1880 and for another full 2.0 degrees Celsius of warming above what it is today is calculated by climate scientists to be of net benefit to humanity and the Earth. It is only beyond the additional 2 degress that the balance turns negative. This is why the target has been to stop warming by this point. Coal’s primary benefit to the world today is providing low-cost electricity. The true comparison to be made is not coal to gas or coal to nuclear but coal electricity to no electricity. 1.2 billion people in the world have no electricity in their homes. Billions more still burn wood, charcoal, or dung inside their homes for cooking and heating. The terrible air quality from this practice is far worse than that from even unscrubbed coal plants and is estimated by WHO to kill 3 million people each year. And the CO2 from all this inefficiently burned biomass is not carbon neutral, because it is coming from deforestation of the ancient carbon sink forests and peat bogs of Asia, Indonesia, Africa, and South America. We certainly need to accurately count the costs of carbon, social and otherwise, but we also must count the benefits of hydrocarbon fuels and the costs and benefits of alternatives. This is the only way to craft sound energy policy. The social costs avoided by curtailing carbon need to be weighed against the social costs of curtailing carbon.The social costs of replacing cheap coal electricity with higher-cost, lower-efficiency, arbitrarily intermittent alternatives such as wind and solar are to inflate the price and reduce the reliability. Dramatically higher electricity costs across Europe that correlate to the high penetratrion of wind and solar have created an increasing wave of energy poverty and forced the poorest to raid their national forests for firewood because they can’t afford electricity. The number of people who die of temperature extremes in winter and summer is statistically linked to the price of energy, and bad “renewable” electricity policy is literally killing people in the developed world by increasing energy poverty just as bad “renewable” biofuel policy is killing people in the developing world by displacing food agriculture with fuel agriculture and forcing hundreds of millions more into food poverty.Additionally, it is important to calibrate the costs with the latest science. The just-released 2013 IPCC Working Group I report that represents the scientific consensus needs to inform the calculations. This 2,216 page report reads far differently than the 20-page Summary Report that got all the media airplay. This is because the 20-page Summary Report is a political consensus document, not a scientific consensus document. For example, when the advanced copy of the summary report was released, the western governments with a political stake in climate change alarmism were not pleased by its frank acknowledgment of a 15-yr hiatus in warming or its frank admission that all of the climate models had overshot actual temperature rise by more than a quarter of a degree C. German politicians called for the reference to the warming slowdown to be deleted, saying it wasn’t fair to consider trends shorter than 30 years. US politicians urged the authors to include the ‘leading hypothesis’ that the reduction in warming is linked to more heat being transferred to the deep ocean despite the fact that 3 out of 5 studies considered by the IPCC showed ocean warming had also slowed. The increase to 95% certainty of human responsibility for climate change is a complete political fabrication and appears only in the summary report as it was not justified by the data and was not a point of consensus for the scientists themselves. Here is a record of how each nation negotiated the language it wanted to see in the summary report. http://judithcurry.com/2013/10/01/negotiating-the-ipcc-spm/.The full report is actually quite honest and evenhanded because it was not politically scrutinized. It is therefore very instructive to find that it does not support the quasi-religious dogma of the doomsday alarmists, but rather openly acknowledges lack of consensus, contrary evidence, failed model predictions, alternative theories, and assumptions used in place of hard data in key areas. It backs aways and recants from statements in AR4 and earlier IPCC reports of increasing droughts or hurricanes or imminent climate catastrophes or irreversible tipping points. In other words, it is refreshingly scientific, much more moderate, and should be cause for recalibrating the long-term costs of GHG emissions against the near-term costs of mitigating those emissions. Read it here (http://www.climatechange2013.org/images/uploads/WGIAR5_WGI-12Doc2b_FinalDraft_All.pdf).The current White House approach was conducted behind closed doors, without broad participation, without the benefit of the latest IPCC report, and was based upon a raft of unscrutinized assumptions about such fundamental variables as the discount rate to be applied to future costs. It also amazingly ignored methane, nitrous oxide, nitrogen triflouride, and other GHGs that are hundreds and thousands of times more potent at global warming than CO2 but are emitted by politically favored activities such as farming, biofuels production, and solar panel manufacturing. The nation and the world needs a far better basis upon which to make energy policy that literally affects the lives and deaths of current and future generations.