Another Report Questions Feds' Carbon Calculations
By Erin Weaver
The U.S. government is greatly underestimating the costs of carbon pollution, according to a study in the Journal of Environmental Studies and Sciences. “The Social Cost of Carbon in U.S. Regulatory Impact Analyses” says the Office of Budget Management (OBM) uses a faulty analytical model, utilizing an unjustifiably high discount rate to translate future costs into present values and ignoring the greater economic impact on poor regions.
The model was developed in 2010, when the OBM estimated the “social cost of carbon”—the value to society of reducing carbon emissions—to be $21 per ton of emissions. The new study argues that a more accurate cost is between 2.6 and 12 times higher, but coauthor Laurie Johnson, Ph.D., economist with the Natural Resources Defense Council, points out that even the study’s high-end estimate of $266 per ton leaves out worst-case scenarios and damages that couldn’t be quantified.
As EBN noted in 2011, the Economists for Equity and Environment network estimated that the social cost of carbon could be as high as $894 per ton (see “,” EBN July 2011). These numbers show that a shift to wind and solar power would be more cost-effective than natural gas or coal, says Johnson.