The nation’s leading scientists have just reaffirmed that the government’s estimate of the benefits of reducing climate pollution reflect the best available science and economics. The National Academy of Science’s recent report urges the federal government to take advantage of advancements in science and economics in its valuation of the benefits of reducing climate pollution on an ongoing basis.
This gives us good reason to oppose any efforts of the incoming Administration to reconsider this measure. Adjusting this estimate down, or worse, rejecting its application altogether, suggests that there are little or no benefits to us, our children or our grandchildren of avoiding the worst impacts of climate change. We know definitively that this is not the case.
We know there are benefits to minimizing the impacts of climate change because the costs of climate change-related events are impacting our daily lives here and now. Four years ago, Hurricane Sandy ravaged the East coast, tragically claiming 159 lives, causing more than $60 billion dollars in damage, and forcing 776,000 people from their homes. Scientists have noted that climate change likely intensified the storm. The most devastating floods Louisiana has experienced in over a century killed 13 people and displaced thousands last year. The damages to Louisiana homes and businesses cost an estimated $10 billion; the National Oceanic and Atmospheric Administration estimated that the likelihood of this flood occurring was increased by 40 percent as a result of climate change.
These are just a couple examples of the mounting evidence that climate change is causing more frequent and extreme droughts, floods and storms that are disrupting businesses, agriculture, and all aspects of our lives in the U.S. and abroad.
Addressing these growing threats requires a scientifically-grounded approach to accounting for the benefits of curbing the carbon pollution driving climate change. Incorporating the benefits of reducing carbon pollution into decision making can help national and local governments in the U.S. and around the world determine the most cost-effective ways to make progress towards mitigating the worst impacts of climate change.
Specifically, we are referring to what has become known as the social cost of carbon (SCC). It is a measure of the dollar value of current and future costs associated with climate change for every ton of carbon pollution emitted. Agencies apply this concept in decision making to estimate the benefit (or avoided cost) of reducing one ton of carbon emissions.
Experts at the Environmental Protection Agency (EPA), the Council of Economic Advisers, and other federal agencies estimate that every ton of carbon pollution sent into the atmosphere from burning fossil fuels caused $39 of damage in 2015. There were about 5.3 billion metric tonnes of carbon pollution in the U.S. in 2015. That is the equivalent of nearly $207 billion in costs from climate change in 2015 alone. Many economists consider this a conservative estimate because it accounts for a limited number of economic sectors and omits costs associated with expensive problems like droughts, higher food prices, and some extreme weather events. Still, it remains a useful tool to quantify the benefits now and in the future of reducing carbon pollution.
The EPA’s Clean Power Plan (CPP) is one example of how decision makers apply this metric. The CPP sets the first-ever limits on carbon pollution from power plants, which have historically been the largest source of carbon pollution in the United States. The EPA projected that the CPP would reduce carbon pollution by nearly 400 million tonnes, calculating $20 billion in climate benefits in 2030 (leaving aside health benefits from reductions in other harmful pollutants). These benefits significantly outweighed the estimated cost of $8.4 billion, indicating that the CPP is a sensible, cost-effective policy.
In other examples, the Department of Energy (DOE) estimated the climate benefits of reducing carbon pollution alongside other benefits like customer savings when setting appliance efficiency standards. The Seventh Circuit Court of Appeals agreed with its approach and upheld it against industry challenges. The Ninth Circuit Court of Appeals separately rejected the application of a $0 figure for the benefits of reduced carbon emissions in a cost-benefit analysis of fuel economy standards.
The most recent report from the National Academy of Sciences (NAS) has reaffirmed that this measure of carbon reduction benefits is rooted in the latest peer-reviewed literature, and suggests steps to ensure this remains the case going forward. As we improve our understanding of climate change and its economic effects, we should utilize these advancements by incorporating them into the benefits estimates. Professor Ricky Revesz, a law professor and dean emeritus of the New York University School of Law, has suggested that the NAS’s recommendations could lead to a higher valuation of the benefits. This is important because it could mean that the benefits of reducing carbon pollution are even greater than our current estimates.
Fortunately, even as our estimates of the benefits of reducing carbon pollution are likely to increase, the costs of making these reductions are declining. We do not have to decide between protecting our economy and protecting our climate. We are making important progress on mitigating the worst impacts of climate change, and the costs of transitioning to a low-carbon future are rapidly falling. The nationwide trend toward lower carbon pollution shows no signs of abating. States, power companies, homeowners, and businesses are already enjoying the benefits of clean and affordable energy. Many, including financial sector experts, have reassuringly indicated expectations that this momentum will continue.
It is more critical than ever to have an estimate of the long-term benefits of reducing climate pollution, established through sound science and economics. The current valuation is a key benchmark ensuring that government actions reduce harmful greenhouse gas emissions in a cost-effective manner. Leading scientists of the NAS have now affirmed the underlying science and economics. The incoming Administration would be wise to heed the NAS recommendations. Anything less would be equivalent to denying the reality of climate change.