A Free-Market Energy Blog

RFF Goes NRDC (“Social Cost of Carbon” Study Ahead)

By Robert Bradley Jr. -- August 11, 2017

“On the climate issue, RFF has become the intellectual arm of the Natural Resource Defense Council (NRDC), just as RFF board member David Hawkins (of NRDC) desires.”

Resources for the Future (RFF) was once a much more scholarly think tank than it is today. It did not assume but evaluated and debated energy economics and related environmental issues.

On climate change, in particular, RFF has gone into the tank of alarmism–and is now a full-fledged foe of the free-market-oriented energy policies underway in the Trump Administration. In fact, RFF has become the intellectual arm of the Natural Resource Defense Council (NRDC), just as RFF board member David Hawkins (of NRDC) desires.

Sad, sad. From its glorious beginning in the 1950s and 1960s–publishing treatises and shorter studies on resource availability–RFF went Malthusian in the 1970s, a story recounted by the late mineral economist Richard Gordon and myself elsewhere. [1]

A 1975 essay by John Krutilla and Talbot Page—citing helpful input from the Environmental Defense Fund, Natural Resources Defense Council, Sierra Club, and Wilderness Society—was long on conservationism and government intervention and short on the free market. [2]

In this case, bad company led to bad economics. Rather than environmental groups, RFF should have provided a home for the energy resource optimists instead of demoting them from its ranks.

Global Warming: A Promising Beginning Goes Very Sour

When the global warming issue first hit in the late 1980s, RFF stayed on scholarly course, proposing to study the issue rather than assume a major problem (negative externality) requiring government action. In his President’s Report, RFF head Robert Fri put the burden of proof where it belonged:

Veterans of earlier crises, economists prominently among them, suspected another rebirth of Malthusian fear and asked how [global warming] differed from the last several. [3]

But with Paul Portney’s buildup of RFF in the 1990s, the temptation was too great. Assume the climate problem, don’t worry too much about dissent, much less about government failure in the attempt to address market failure. And let the private support and government grants roll in!

Ignored in all this were the studies of Robert Mendelsohn of Yale University that lower warming scenarios had benefits, not only costs, and the sign of the externality was positive (not negative) at the lower range of climate sensitivity estimates. Moreover, Mendelsohn argued that free market policies were vital to allow society’s to turn climate change (natural or anthropogenic) into a positive.

Free market adaptation, in other words, competed against government mitigation policies.  But not at RFF.

Way, Way Left

Perhaps the decision to have David Hawkins, the Director of the Climate Center at the Natural Resources Defense Council, join RFF’s board in the Portney era was the canary in the coal mine for the organization’s eventual fate. In any case, Phil Sharp took RFF full Obama, and now Richard Newell is taking RFF full anti-Trump as regards energy and climate policy.

The rank partisanship now evident at RFF was revealed in this blog post by Nathan Richardson, visiting fellow at RFF, “Trump’s Climate Executive Order Discards American Values.” (March 28, 2017):

America has a short list of truly shameful ‘days,’—among them the Dred Scott decision, the Trail of Tears, Japanese internment, and Abu Ghraib—most of them symbolic of a larger national moral failure. I hope I am wrong, but I fear that today will join that list.

If Trump ‘s climate policy “comes to pass,” Richardson stated, “then I predict future generations will look back on today with particular scorn and shame.” And just to add certainty to his verdict, he issues the Big Scare:

A single executive order might therefore seem unremarkable. But today’s action is significant….  At stake are the global economy, entire ecosystems, and the lives of millions—most of them not yet living. Those future generations will judge the authors of today’s policy harshly.

Social Cost of Carbon Study (Kopp Fundraising Letter)

I was motivated to write this post when I received the following fundraising letter from Ray Kopp, RFF’s vice president of energy and climate–and the organizer of their climate events, where they EXCLUDE any challenge from the viewpoint of climate alarmism and forced energy transformation.

Kopp’s August 8th letter, “Playing a Role That Government Can’t,” decried the Trump Administration’s decision to de-emphasize the “social cost of carbon” that was “a key metric in over 150 proposed and final regulatory measures, including land use decisions and standards for vehicle fuel efficiency, power plant emissions, and appliances.”

The government’s $42/metric ton (in 2010$) estimate, rife with questionable assumptions, deserves to be ditched—and a realistic estimate substituted, if it should be done at all. But to RFF, they must fill the gap with a new SCC estimate–and they know it will be a negative, a net social cost. Kopp writes:

To inform action on climate change, experts at RFF believe that it’s essential to identify the actual costs that carbon emissions impose on society, and the social cost of carbon is a way to do just that. The social cost of carbon is an estimate of the dollar value of climate damages caused by every additional ton of carbon dioxide released into the atmosphere—and it affects billions of dollars of regulatory and investment decisions each year.

Dear RFF: How about the other side of the equation? What about the benefits of carbon emissions, beginning with the advantages of dense carbon-based energy (versus dilute, intermittent alternatives) and continuing with CO2 fertilization and the gains from a moderately warmer and wetter–a greener–world?

Future posts at MasterResource will challenge RFF to be intellectually honest in its planned major multi-year study of the social cost of carbon.


[1] See Robert Bradley, Jr. Capitalism at Work: Business, Government, and Energy (2009), Appendix D (“Resources for the Future: Away from Optimism,” pp. 343–50).

[2] “Towards a Responsible Energy Policy” was depletionist [“we will be forced to rely on new domestic sources and to pay higher prices for energy in the years to come [from] … our previous policy encouraging [mineral resource] exploitation” (78)] and interventionist [“we might consider the appropriate taxation of commodities whose prices do not reflect the external or environmental cost of their production, distribution, and consumption” (87)].

[3] Robert Fri, “Global Warming: A Policymaker’s Dilemma” (President’s Report). Resources for the Future: 1988 Annual Report, pp. 6–7.


  1. Ron Clutz  

    Some thoughts on social costs and benefits of carbon (really CO2).

    In February 2009, a month after Barack Obama took office, two academics sat across from each other in the White House mess hall. Over a club sandwich, Michael Greenstone, a White House economist, and Cass Sunstein, Obama’s top regulatory officer, decided that the executive branch needed to figure out how to estimate the economic damage from climate change. With the recession in full swing, they were rightly skeptical about the chances that Congress would pass a nationwide cap-and-trade bill. Greenstone and Sunstein knew they needed a Plan B: a way to regulate carbon emissions without going through Congress.


    Several commenters raised a quite separate problem, namely that SCC is biased by addressing only estimated damages from CO2 and not the social benefits. That is not surprising since the entire purpose of the SCC is to get a large enough dollar figure to justify imposing expensive regulations, supposedly to avoid the damages by reductions in CO2 emissions. The framers had no interest or incentive to reduce damage estimates by considering benefits.

    However a normal cost/benefit analysis would only project damages net of the expected benefits, which is clearly not the case here. Let’s consider three categories of Social Benefits of Carbon which properly must be included, rather than ignored.




  2. Mark Krebs  

    PS to Ron:

    Start conforming or be deemed part of the Axis of Climate Evil.”


  3. John W. Garrett  

    There was a day when I paid attention to RFF.

    That day ended when they joined the “swamp” and became yet another hog feeding at the Big Government trough.


  4. Energy Realism at RFF (Krugman rebutted, decarbonization drawbacks specified) - Master Resource  

    […] A recent blog post by Daniel Raimi and Alan Krupnick of Resources for the Future (RFF) is unusual, even remarkable, given the institutional history of their organization. For RFF in recent decades has gone Left, way Left, for the cause of climate alarmism/forced energy transformation (see here).  […]


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