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Category — Social cost of CO2

CO2 Benefits Exceed Costs by … 50:1, more?

Cap-and-trade, carbon taxation, net social cost for carbon: all assume that increasing emissions of carbon dioxide (CO2) and other greenhouse gases by mankind have injurious effects that are not accounted for in private activity.  But the politically incorrect is intellectually correct: CO2 emissions make life better – even possible – for people, the economy, and the ecosphere.

Cost/Benefit Analysis

Weighing risks, costs and benefits is fundamental to life. We do it every day – when walking, driving, showering, heating our homes, and using stairs, ladders and tools; and when balancing the cost of new payments versus the benefits of a better home or car. The alternative is hunkering down in a bedroom or cave – until a lightning bolt, tornado, hurricane or armed burglar disturbs our false sense of security.

That is why government agencies are required to assess the benefits and costs of proposed regulations. Otherwise, officials could simply tout and exaggerate the supposed benefits of a rule, minimize its heavy costs, or ignore the values of the activity or product they want to regulate.

They could focus on the alleged risks of using a chemical, while disregarding the many ways it enhances and safeguards lives. They could abuse their power, to drive agendas that actually reduce our health and welfare.

Fed’s ‘Social Cost of Carbon’

That is now happening with the federal government’s efforts to “prevent dangerous climate change.” [Read more →]

February 11, 2014   1 Comment

‘Social Cost’ of Carbon vs. Climate Science

“The determination of the social cost of carbon (SCC) as made by [federal agencies] is discordant with the best scientific literature on the equilibrium climate sensitivity and the fertilization effect of carbon dioxide—two critically important parameters for establishing the net externality of carbon dioxide emissions…. The [federal government] should act not just to revise the current determination of the SCC, but to suspend its use in all federal rulemaking.”

- Patrick Michaels and Chip Knappenberger (Center for the Study of Science, Cato Institute). “Comment on ‘Technical Support Document, Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866’,” January 27, 2014.

Federal legislative attempts to price and regulate carbon dioxide have failed. Cap-and-trade, which passed the House in 2009, died the next year in the Senate. A carbon tax, much discussed, has not gotten the traction to reach a House vote.

However, a back-door energy tax is alive and well in a monetary-damage value assigned to carbon dioxide emissions in regulatory justification. Under federal cost/benefit analysis, for example, an energy efficiency standard can become more onerous by assigning a monetary benefit of reduced CO2 emissions.

The determination of the social cost of carbon by the Interagency Working Group (IWG), detailed in the May 2013 Technical Support Document (updated in November 2013) is worse than highly subjective, thus an arbitrary calculation. It is knowingly improper, inaccurate and misleading. It should be expunged from all federal matters.

What follows are some highlights of our new Cato study, which can be read in its entirety here. [Read more →]

January 31, 2014   9 Comments

The Positive Social Benefits of Carbon Dioxide

“The very real positive externality of inadvertent atmospheric CO2 enrichment must be considered in all studies examining the SCC [social cost of carbon].”

- Craig Idso, “The Positive Externalities of Carbon Dioxide: Estimating the Monetary Benefits of Rising Atmospheric CO2 Concentrations on Global Good Production.” Center for the Study of Carbon Dioxide and Global Change (October 2013).

The Carbon Sense Coalition has accused those waging a war on carbon dioxide of being “anti-green.” Why? Because CO2 is the gas of life, feeding every green plant, producing food for every animal and in the process releasing oxygen, another gas of life, into the atmosphere.

A recent study in Remote Sensing, Measuring and Modeling Global Vegetation Growth: 1982–2009) notes that data from remote sensing devices show significant increase in annual vegetation growth during the last three decades.

They also report that CO2 fertilization is more important than climate variation in determining the magnitude of the vegetation growth. In its words: [Read more →]

October 24, 2013   8 Comments

Surprise! Current Motor Fuel Taxes Exceed the Estimated Social Cost of Carbon (SCC) in Most Industrialized Countries

“Simple math demonstrates that the average taxes (including duties) on gasoline and diesel in virtually every developed country exceed the average U.S. EPA’s (over)estimated global social cost of carbon now and through 2025 (at least). In fact, motorists in most European countries already pay taxes in excess of the upper bound estimate of the social cost of carbon through the middle of this century.”

According to the U.S. Environmental Protection Agency (EPA), the average global social cost of carbon (SCC), which is the level at which a global carbon tax should theoretically be set, ranged from $5.6 to $41.8 per tonne of carbon dioxide in 2010 (in 2012 US$), and should rise to between $18.7 and $77.4 in 2050 (as shown in Table 1). Per the EPA, the “central value” is represented by the “3% Average” column in the Table. Upper bound estimates are obviously much higher (see last column). [1]

There are several good reasons to believe that both average and upper bound SCC estimates are severely overstated. Suffice it to say that the major reasons for this are, first, the globe is warming much less rapidly than projected—not to be confused with “predicted”—by models of the same vintage as the models used by EPA to estimate SCC, that is, models from the 1990s and early 2000s [Ref. 2, pp. 4–13].

Second, the SCC estimates downplay, if not ignore, technological change that ought to occur over the next century or more and increase adaptive capacity, if the past couple hundred years are any guide. This means that impacts would be much lower than projected, particularly for the poorest countries which are deemed to be most at risk from global warming [Ref. 2, pp. 13–21]. No matter, for this exercise let’s assume that EPA’s SCC estimates are accurate. [Read more →]

May 30, 2012   12 Comments