This article is so stupid that the entire University fo Chicago should be embarrassed. The author ignores the staggering price multiplier that would apply should any serious effect occur as a consequence of climate change. What is the cost of carbon if the midwest has a 10-year drought? A two-year drought? The author uses parameters that are clearly farcical as a basis for a useless and inapplicable economic argument.
2
All these calls of "be realistic" and saying that it's not economically feasible to rapidly decarbonize our energy are evidence of the amazingly myopic threat perception of our species. It's like sending a probe into deep space - you set the trajectory in millimeters which over decades translate into millions of miles. Today, we set the trajectory for our future. To say that preventing massive climate change isn't feasible because it might increase the energy costs today, or heaven forbid, upset the fossil fuel gravy train, is the height of insanity. What price do we put on reliable weather patterns? What price to we put on keeping temperatures from spiking into deadly ranges for broad sections of the world; or flooding shorelines; or the thousand other horribles in the parade of a runaway greenhouse world?
Isn't our future worthy of a more significant investment?
Isn't our future worthy of a more significant investment?
5
I am deeply disappointed in the NY Times for printing this article. How can you put a price on ruining our environment, destroying our natural resources - air, water, forests and denying our basic rights as humans to these irreplaceable things ?
This article conveniently ignores all pollution of hydrofracking besides CO2 emissions - methane gas pollution, carcinogens released into the environment, water pollution, destruction of forests and cities, and use of millions of gallons of water per well, which is then polluted beyond repair. Is this the ruined world we want to leave our children.?
Even if this crazy idea became law, "carbon tax" would not limit the ability of Big Oil to drill anywhere they please.
Rich oil companies evidently have more rights than any of us citizens, and with their stranglehold on Congress, will not be denied. It is an empty promise that something will be "left in the ground".
Really I suspect that the oil companies thought up this idea, in hopes that people would be confused and bamboozled by seemingly "scientific analysis" which has no basis in reality.
Before we ruin everything, why don't we change our lives and figure out how to use cleaner resources? We don't have to ruin everything.
This article conveniently ignores all pollution of hydrofracking besides CO2 emissions - methane gas pollution, carcinogens released into the environment, water pollution, destruction of forests and cities, and use of millions of gallons of water per well, which is then polluted beyond repair. Is this the ruined world we want to leave our children.?
Even if this crazy idea became law, "carbon tax" would not limit the ability of Big Oil to drill anywhere they please.
Rich oil companies evidently have more rights than any of us citizens, and with their stranglehold on Congress, will not be denied. It is an empty promise that something will be "left in the ground".
Really I suspect that the oil companies thought up this idea, in hopes that people would be confused and bamboozled by seemingly "scientific analysis" which has no basis in reality.
Before we ruin everything, why don't we change our lives and figure out how to use cleaner resources? We don't have to ruin everything.
4
Scary monsters ...
I got a little curious about CCS a while ago, since I'd heard it was expensive and impractical. Think about it. The sheer volume of the stuff ... just think about it. Once you really consider what's involved, you'll realize it's not likely to be doable. Where would you put it. Nothing meets the scale we need.
However, I like the work that has been done with algae. Once again, however, I remember that algae is a better survivor than we are ...
I got a little curious about CCS a while ago, since I'd heard it was expensive and impractical. Think about it. The sheer volume of the stuff ... just think about it. Once you really consider what's involved, you'll realize it's not likely to be doable. Where would you put it. Nothing meets the scale we need.
However, I like the work that has been done with algae. Once again, however, I remember that algae is a better survivor than we are ...
A fine idea in principle, but the magic number is highly uncertain and hopefully subject to rapid change as the technology and economics of alternate energy improve. We know that burning coal must be discouraged and that alternate technologies must be encouraged and this can be done without arbitrary calculations. What governments mainly need to do now is invest much more in developing and testing alternate energy generation and also carbon removal. The value of these thing is impossible to calculate.
3
I get a kick out of the rational and humane plans and postulates put forth by the Times since I know that the Republican will never allow them to be implemented or even considered. It's actually deeply saddening - tragic really.
4
We have no way to accurately measure the cost of carbon capture and storage at scale since we have no way technically to accomplish it. Any approach to capture and storage would require input of much more energy and cost to do it, and the S.C.C would escalate well beyond $40/ton. Hence, in the not so distant future we will have to discourage use of coal by stronger means than price -- government policies which require coal to stay in the ground as the only effective way to avoid the emissions and massive incentives to replace coal power plant capacity with non-fossil fuel energy.
7
Sounds great, except that even the author notes that this would push production away from the US towards production in other countries. This is essentially a NIMB argument that does nothing to actually reduce the amount of global emissions.
All this would happen is we would lower the proportion of domestically produced fossils fuels that Americans use and increase the amount of imported fossil fuels that are consumed. While the price overall may rise slightly to cover the extra cost of shipping the fuel in from other countries, as long as there are other countries either willing of desperate enough to continue producing without a similar SCC adjustment, the world will still have lots of cheap fossil fuels available and there will be no market incentive to encourage either a reduction in fossil fuel usage or a shift to alternative sources of energy. In fact, if we increase the amount of imported fuel that we use, we would actually be increasing our footprint, since there is a environmental cost of shipping the fuel to us that we would not have to deal with when sourcing our fuel domestically.
So, this proposal would be taking jobs away from some already economically challenged parts of the country and exporting them (along with the environmental liabilities associated with extraction). Meanwhile, we'd still have the same global problem. Climate change is a global problem. Unless such a standard is adopted globally, this idea is hogwash.
All this would happen is we would lower the proportion of domestically produced fossils fuels that Americans use and increase the amount of imported fossil fuels that are consumed. While the price overall may rise slightly to cover the extra cost of shipping the fuel in from other countries, as long as there are other countries either willing of desperate enough to continue producing without a similar SCC adjustment, the world will still have lots of cheap fossil fuels available and there will be no market incentive to encourage either a reduction in fossil fuel usage or a shift to alternative sources of energy. In fact, if we increase the amount of imported fuel that we use, we would actually be increasing our footprint, since there is a environmental cost of shipping the fuel to us that we would not have to deal with when sourcing our fuel domestically.
So, this proposal would be taking jobs away from some already economically challenged parts of the country and exporting them (along with the environmental liabilities associated with extraction). Meanwhile, we'd still have the same global problem. Climate change is a global problem. Unless such a standard is adopted globally, this idea is hogwash.
2
I'm all for it, but the cost is, as mentioned by others, too low. We subsidize it instead, which is laughable considering these are the most profitable industries on earth. Their earnings on influence dollars? About 100:1
And as also mentioned elsewhere, the support for ignorance and political persuasion's success is staggering.
People, it's a nice hospitable planet. Don't you want to keep it so?
And as also mentioned elsewhere, the support for ignorance and political persuasion's success is staggering.
People, it's a nice hospitable planet. Don't you want to keep it so?
9
What if there were a "disruptive technology" available to manage CO2 and offer a myriad of other global benefits such as helping to end world hunger and in the bargain offered to do this at a cost too cheap to meter? Might this proven technology be on the agenda of the tens of thousands in Paris seeking to craft a trillion dollar per year global carbon tax? Nope. But it's is here to read http://russgeorge.net/2015/12/01/disruptive-co2-technology-too-cheap-to-...
Why only an SCC? The "Social Cost of Pollution (SCP)" from fossil fuel combustion is often estimated at 10 times the social cost of just the carbon emissions. Certainly, SCC is important, but we mustn't forget that PM2.5, NOx, SOx, etc. kill and sicken millions annually.
If I were a fossil fuel executive, I think I would want people to focus on the long-term, seemingly abstract impact of GHG emissions rather than on the short-term death and damage that is being caused by fossil fuel emissions. Focusing on people in the hospital today might raise more opposition than worrying about the future, but real, impacts of climate change.
We must end reliance on fossil fuels for electricity, transportation and heating. We must transition to solar/wind/hydro, electric vehicles and geothermal heat pumps. Climate change and carbon emissions are only part of the reason that we need to do these things.
If I were a fossil fuel executive, I think I would want people to focus on the long-term, seemingly abstract impact of GHG emissions rather than on the short-term death and damage that is being caused by fossil fuel emissions. Focusing on people in the hospital today might raise more opposition than worrying about the future, but real, impacts of climate change.
We must end reliance on fossil fuels for electricity, transportation and heating. We must transition to solar/wind/hydro, electric vehicles and geothermal heat pumps. Climate change and carbon emissions are only part of the reason that we need to do these things.
10
It may be possible in future, when technologically feasible on a large scale, to price carbon based on how much it would cost to capture and store emissions. Pump it back in the ground.
how?
3
This is an important contribution to questions around how the Interior Department should manage our publicly-owned fossil fuels. Calculating the social cost of carbon per BTU is helpful in showing the differences between fossil fuel types. For a closer look at what it would mean to incorporate the social cost of carbon for federal coal, check out http://www.greenpeace.org/usa/research/leasing-coal-fueling-climate-chan...
It's a slightly different approach, contrasting the social cost of carbon damages to the amount received by the government for leasing the coal (instead of market price) - just $1.03 per ton, on average, for the 2.2 billion tons of our coal that have been leased during the Obama administration. Meanwhile, the social damage from each ton of that coal would be as high as $237, using the government's highest social cost of carbon estimate, or $117, $79, $22 per ton. The government uses a range of social cost of carbon estimates, none of which are likely high enough since they leave out potentially catastrophic impacts like sea level rise. But all show that the public is getting a terrible deal for our coal, and the best value by far would be to leave the vast majority of it in the ground.
Unfortunately, the Interior Department has allowed the federal coal program to be run largely by the coal industry itself. The White House must step in if it hopes to stop this program from undermining its efforts to address climate change.
It's a slightly different approach, contrasting the social cost of carbon damages to the amount received by the government for leasing the coal (instead of market price) - just $1.03 per ton, on average, for the 2.2 billion tons of our coal that have been leased during the Obama administration. Meanwhile, the social damage from each ton of that coal would be as high as $237, using the government's highest social cost of carbon estimate, or $117, $79, $22 per ton. The government uses a range of social cost of carbon estimates, none of which are likely high enough since they leave out potentially catastrophic impacts like sea level rise. But all show that the public is getting a terrible deal for our coal, and the best value by far would be to leave the vast majority of it in the ground.
Unfortunately, the Interior Department has allowed the federal coal program to be run largely by the coal industry itself. The White House must step in if it hopes to stop this program from undermining its efforts to address climate change.
10
Good idea but for the politics. For many decades economists have called for the use of various market based mechanisms to internalize environmental and social costs to avoid the classic 'tragedy of the commons'. Unfortunately the lawyers have dominated the regulatory landscape with 'safe/unsafe' standards which are inefficient, frequently ineffective but easy to understand. Likewise our legislators shy away from anything that cannot be reduced to a bumper sticker. So while the S.C.C. makes sense, it will be a hard sell.
3
Mr. Greenstone's market-based solution is unlikely to work. Carbon already in the atomosphere will not dissipate for hundreds of years. So it continues to increase and is now approaching unsustainable levels. We need to take quick action, but a price/market solution works slowly by cushioning shocks. By the time it makes a significant difference, it will be too late to avoid severe climate effects, especially in many poor countries but also in the United States. A better solution would be for governments to institute strict carbon budgets. In order to do this, they would have to bail-out the fossil fuel energy industries and require them to switch to non-fossil fuel sources, such as wind, solar, and water power.
5
Fossil fuels have been underpriced for decades. This would be one way to get the producers (and users) to pay the piper.
The question is, how can you price climate damages when we have no idea how to remove carbon dioxide and carbonic acid from our environment? In fact, that value could be $3/MMBtu or $300/MMBtu - we really don't know.
The obstacle economists frequently run into is their belief that money always drives outcome, while in reality there can be physical/logistical complications that make economic models impossible to realize. This is particularly true in the arenas of energy efficiency and carbon emission reductions.
This is certainly an improvement over our current look-the-other-way approach, however, and merits further discussion.
The obstacle economists frequently run into is their belief that money always drives outcome, while in reality there can be physical/logistical complications that make economic models impossible to realize. This is particularly true in the arenas of energy efficiency and carbon emission reductions.
This is certainly an improvement over our current look-the-other-way approach, however, and merits further discussion.
1
There are plenty of ways to remove carbon dioxide from the environment - it's just that we're not willing to make the investment to implement them. In the end, it's cheaper to leave the stuff in the ground, allow the rain forests to recover the millions of acres that have been destroyed for grazing and farming, and shift to cleaner technologies rapidly. Again, what price do we put on keeping this relatively hospitable biosphere that has allowed our species to flourish for thousands of years? Would seem to me, the price we should be willing to accept is pretty high (especially when you realize that the actual value of "money" is a pretty conceptual at this point...when everything breaks down, you can't eat a dollar).
3
This article brings up an important and useful notion, but it doesn't quite go all the way to the justifiable conclusion. Greenstone suggests that more rational decisions will be made if carbon costs are introduced into decisions about production. This is true; the marginal decisions between use of coal and natural gas for electricity production, or between fueling up your car with oil or electricity, should be driven by a carbon tax tendered at the point of production of the fuel. That will impel people to produce fuel in ways that are most CO2 efficient.
All of the most interesting bits are what happens next, or what is neglected to be considered next. Introducing this tax in producer regions will be sharply detrimental to the economies of those regions, as Greenstone notes. The obvious resolution is for production taxes levied in a region to go to the regional government in which the production occurs. This will mitigate the economic costs experienced by that region because of the new tax, which lets everyone ascertain that the introduction of the tax is truly for environmental reasons, rather than being a tax grab in one region that will be transfered to other regions. At the same time, the federal government should apply the tax to all imports of fuels from countries that do not implement this system, so that fuel use is priced efficiently as well.
This closes the gaps that Greenstone left open regarding the mere shifting of production in the fairest way.
All of the most interesting bits are what happens next, or what is neglected to be considered next. Introducing this tax in producer regions will be sharply detrimental to the economies of those regions, as Greenstone notes. The obvious resolution is for production taxes levied in a region to go to the regional government in which the production occurs. This will mitigate the economic costs experienced by that region because of the new tax, which lets everyone ascertain that the introduction of the tax is truly for environmental reasons, rather than being a tax grab in one region that will be transfered to other regions. At the same time, the federal government should apply the tax to all imports of fuels from countries that do not implement this system, so that fuel use is priced efficiently as well.
This closes the gaps that Greenstone left open regarding the mere shifting of production in the fairest way.
10
The left and the right should view meeting the current energy needs of the nation as a matter of national security. We should build 200+ carbon free nuclear power plants, more wind farms, solar and yes....drill everywhere. In fact, the import of energy should be illegal. If we were an energy exporter then the affairs of other countries would cost us a lot less!
One thing not quantified in such mathematical approaches s that no one is making new petroleum. Ever. This is a valuable and (by definition) scarce natural resource that has uses other than being burned for fuel. To the extent (yes, that is a qualifier) that we have or can readily create alternatives to oil and gas for fuel purposes, we should do so - not only to mitigate forced warming of the planet, but also to preserve a scarce resource that can be put to better uses.
5
I’m getting confused here. Looking at the definition of SCC, it is only valid for “for a small emission reduction” and explicitly excludes “important damages”. As such, it seems to be to be intended only as a tool for making minor choices between alternative means of carbon emissions, given a premise that such usage is unavoidable. In this light, it would indeed appear to be an appropriate kind of tool for choosing between petroleum and coal, as per professor Greenstone’s example.
However, professor Greenstone presents the scope of his article to be much wider - “Is there a middle ground that can supply the energy we need without causing significant climate damages? Yes”. I cannot see that SCC - as currently defined - has anything to do with limiting significant climate damages. Professor Greenstone needs to present some kind of additional reasoning behind his claim.
However, professor Greenstone presents the scope of his article to be much wider - “Is there a middle ground that can supply the energy we need without causing significant climate damages? Yes”. I cannot see that SCC - as currently defined - has anything to do with limiting significant climate damages. Professor Greenstone needs to present some kind of additional reasoning behind his claim.
5
How about setting the fee on a sliding scale that would go up when the price of the fuel goes down? That would help stabilize prices, which would encourage investment in alternative renewable energy sources and avoid the destructive boom-and-bust cycle that OPEC and the Saudis are engaged in. And it would deter the short term over-exploitation that occurs when the prices peak (which we might regret when the seas start closing in on the US East Coast.)
3
It makes perfect sense, but sadly the Obama Administration has been loathe to acknowledge the value of social cost of carbon in its fossil fuel decisions. In spite of a federal court ruling, the U.S. Department of the Interior continues to argue that social cost of carbon analyses aren't appropriate, going so far as to claim they are "misleading" and lead to "unbalanced" results. Here's an excerpt from a recent coal leasing decision by the Bureau of Land Management in Wyoming:
"BLM’s analyses of plans and projects usually provide a regional economic impact analysis, which estimates the direct, indirect, and cumulative economic activity that a given action is expected to create within a specified geographic area. This activity is typically expressed as projected changes in employment, personal income, or economic output. In contrast, SCC provides one element of a benefit-cost analysis: the monetization of all meaningful economic benefits and costs. Monetizing only certain effects on social welfare can lead to an unbalanced assessment. Reporting the SCC in isolation would be misleading."
See, http://www.blm.gov/style/medialib/blm/wy/information/NEPA/hpdo/W-Antelop.... There are many more examples of these same statements.
The idea is sound, but in practice, social cost of carbon is being dismissed. The result is the Administration continues to rubberstamp more coal mining with no meaningful assessment of climate impacts.
"BLM’s analyses of plans and projects usually provide a regional economic impact analysis, which estimates the direct, indirect, and cumulative economic activity that a given action is expected to create within a specified geographic area. This activity is typically expressed as projected changes in employment, personal income, or economic output. In contrast, SCC provides one element of a benefit-cost analysis: the monetization of all meaningful economic benefits and costs. Monetizing only certain effects on social welfare can lead to an unbalanced assessment. Reporting the SCC in isolation would be misleading."
See, http://www.blm.gov/style/medialib/blm/wy/information/NEPA/hpdo/W-Antelop.... There are many more examples of these same statements.
The idea is sound, but in practice, social cost of carbon is being dismissed. The result is the Administration continues to rubberstamp more coal mining with no meaningful assessment of climate impacts.
2
In reply to the BLM, isn't the benefit that leads companies to go to all the effort to drill and mine, etc., and then process and distribute, etc., the fuels represented in the price society pays for those fuels? The SCC is an effort to correct the market failure embedded in these transactions, Econ 101 cites pollution as a classic negative externality, and some kind of tax or fee is usually the recommended fix.
That said, I agree with others in the comments that the correct value of the SCC is really just a wild guess. CO2 accumulates in the atmosphere, the SCC will depend on one's opinion of the value of the unborn.
That said, I agree with others in the comments that the correct value of the SCC is really just a wild guess. CO2 accumulates in the atmosphere, the SCC will depend on one's opinion of the value of the unborn.
1
Here's the formula: stop using them as soon as possible, by making them as expensive as possible. Provide alternatives, like carbon-neutral synfuels generated using nuclear energy.
Any attempt to calculate "full climate damages" are manipulations by the extraction industries to buy time. Put them out of business - the sooner, the better.
Any attempt to calculate "full climate damages" are manipulations by the extraction industries to buy time. Put them out of business - the sooner, the better.
7
$40/ton CO2 on fuel from public lands might be a very good starting point. I suspect however, the S.C.C value of $40 is low, having been calculated a few years ago. We have accumulating evidence that the climate problem is even more urgent than previously thought—an updated social cost of carbon perhaps $80.
As always, the politics is the challenge. The science community has long urged reducing carbon emissions, and now even conservative economists are wrestling with ways to do it. Unfortunately politicians, including most of the Republican Party are still protectors of legacy energy interests.
In an entry for the recent MIT Climate CoLab contest for ideas for putting a price on carbon, I proposed $60/ton. The estimated revenue of $333 billion/year would be returned to the economy in the form of a 1/3 cut in FICA tax rates, a $333 billion tax cut for American workers. http://climatecolab.org/web/guest/plans/-/plans/contestId/1301419/planId...
As always, the politics is the challenge. The science community has long urged reducing carbon emissions, and now even conservative economists are wrestling with ways to do it. Unfortunately politicians, including most of the Republican Party are still protectors of legacy energy interests.
In an entry for the recent MIT Climate CoLab contest for ideas for putting a price on carbon, I proposed $60/ton. The estimated revenue of $333 billion/year would be returned to the economy in the form of a 1/3 cut in FICA tax rates, a $333 billion tax cut for American workers. http://climatecolab.org/web/guest/plans/-/plans/contestId/1301419/planId...
4
What if we continued to lease the rights to access fossil fuels on federal land but required the leases and royalty payments to reflect the full climate damages from these fuels? The problem is both simpler and more complex than proposed. First, is $40 per ton a reasonable or correct value of the full cost of carbon? Second, one has only to look at various other fees charged to private individuals or corporations for use of public resources. Look at the furor over Clive Bundy and grazing fees as an example of the difference between what a private owner would charge compared to the pitiful fees collected by the taxpayer. Unless and until the federal government charges the true and full value for the use of all resources on public lands, the SCC related fee is just a pipe dream that will be fought tooth and nail by the extractors and the profits they use to elect politicians that defend the lower fees.
13
We need to start somewhere; a big 1st step for USA.
It is amazing that there is no discussion of using nuclear energy or other alternative energy sources and how their increased use might alter the state of affairs.
3
note that some (emission-free) nuclear plants have shut down due to rise of gas-fired power plants. (per today's NYT)
Nuclear plants are only "emission-free" when they are working properly. Unfortunately, when they break, they tend to emit some pretty nasty stuff. Their waste causes other emissions issues... If nuclear really was "emission-free," it would be much easier to support.
4
I think this piece had a different focus -- how to distinguish among carbon fuel extraction possibilities.
But a broader definition of the true costs of various energy sources would be worthwhile. In the case of nuclear energy it would have to include calculations of the costs of dealing with our already massive used fuel storage problems, and the true cost of the uranium extraction. Nuclear processes that could utilize fuel and not lead to huge stockpiles of nuclear waste materials might become more cost effective if the true cost of the heavily subsidized present nuclear energy usage were considered.
But a broader definition of the true costs of various energy sources would be worthwhile. In the case of nuclear energy it would have to include calculations of the costs of dealing with our already massive used fuel storage problems, and the true cost of the uranium extraction. Nuclear processes that could utilize fuel and not lead to huge stockpiles of nuclear waste materials might become more cost effective if the true cost of the heavily subsidized present nuclear energy usage were considered.
1
I decided some eight years ago to have the Fee and Dividend become the heart of carbon-based international monetary system by wedding it to the carbon monetary standard of a specific tonnage of CO2e per person. Thus the Tierra Fee and Dividend system was born. The conceptual, institutional, ethical and social dimensions of this Tierra monetary system are presented in Verhagen 2012 “The Tierra Solution: Resolving climate change through monetary transformation” and updated at www.timun.net.