New! Nerd* Corner
*Nerd: (Noun, a complement) A person who is extremely enthusiastic and knowledgeable about a particular subject, especially one of niche interest.
New Study Confirms Huge Benefits of Climate Action
Jonathan Marshall,
CCL economics research coordinator,
former economics editor, S.F. Chronicle
Last week I reported a stunning estimate by the Office of Management and Budget that the social benefits of the Inflation Reduction Act’s climate provisions could be as high as $1.9 trillion. That seemed like a big deal to me at the time, and a great return on a 10-year investment of $370 billion.
Starting today, however, that number needs to be revised up—way up. Based on a new study by two dozen leading economists and climate researchers in Nature magazine, the actual benefits of the IRA could be $4.5 trillion or even higher. Remember that jaw-dropping number anytime someone tells you government solutions never work.
The new study re-estimates dramatically upward what economists call the “social cost of carbon” (SCC). The term refers to the net damage, in current dollars, caused by the emission of an additional ton of carbon dioxide into the atmosphere. (That’s about what one passenger car produces over 2,500 miles.) The damage can range from fires, droughts, and floods to the loss of human life from excessive heat.
Often called “the most important number you’ve never heard of,” the SCC has become incredibly important to environmental policy and regulation. Careful study by serious experts in the Obama administration set the number at $51 per metric ton of CO2. Federal and state government planners here and abroad have subsequently used SCC estimates to justify fuel economy standards, power plant regulations, limits on emissions from oil and gas facilities, procurement decisions, and national carbon prices.
Because of its importance, the SCC has also become a target of climate skeptics. A research fellow at the right-wing Heritage Foundation dismissed it as “the most useless number you’ve never heard of.” Determined to roll back EPA regulations on power plant emissions and vehicle fuel efficiency, the Trump administration slashed its official SCC estimate to between $1 and $7/t-CO2.
Reflecting its significance, one of President Biden’s first acts on taking office was to order a full review of SCC estimates, due sometime this year. In the interim, his administration revived the Obama-era $51 number for use by federal agencies. Last May, the Supreme Court overturned an injunction by a Trump-appointed Louisiana judge and allowed the Biden administration to keep using the SCC for planning purposes.
Beating his administration to the punch, two dozen scholars from institutions such as the University of California, Princeton, Harvard, and Resources for the Future, reported today on the results of their five years of work to implement a landmark 2017 report by the National Academies of Sciences, Engineering, and Medicine on ways to improve the scientific basis of SCC estimates.
The team’s central estimate for the SCC is $185/t-CO2, 3.6 times higher than the government’s current value.
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