New Study Blasts Obama Administration Carbon Dioxide Cost Estimates

Published August 13, 2015

The Obama administration’s “social cost of carbon,” estimates, the calculation of the net costs additional units of atmospheric carbon dioxide has upon society, have been falling. A new study from Reason Foundation, “Assessing the Social Costs and Benefits of Regulating Carbon Emissions,” shows they would decline even more if the administration would use the most up to date, improved scientific evidence to calculate the relative benefits and costs of carbon dioxide emissions.

Under an executive order signed by then President Clinton in 1993, agencies of the U.S. government are required to “assess both the costs and the benefits of the intended regulation and, recognizing that some costs and benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs.” 

The Reason study finds the Obama administrations social costs of carbon calculations are flawed, overestimating both the costs of harms from climate change due to human greenhouse gas emissions and the benefits resulting from regulations like the new Clean Power Plan and other federal regulations targeting emissions of greenhouse gases. 

True Costs of Carbon Dioxide ‘Zero’

The study by Julian Morris, vice president of research at Reason Foundation, finds the administration’s estimates of the social cost of carbon are “biased upwards” due to their reliance on flawed models all using inflated estimates of climate sensitivity, overestimating the economic impact of climate change. 

Given the significant uncertainty in the possible harms and benefits of climate change and the estimated high costs of preventing the ongoing rise of greenhouse gas emissions, including, among other things, slow down the rate at which poor countries develop, thereby making the inhabitants of those countries more susceptible to climate and other changes, Morris says, “The current best estimate for the social cost of carbon is zero.” 

“Using that number, most federal regulations limiting carbon emissions, including the Clean Power Plan, could no longer be justified” said Morris in a statement issued upon release of the study.

The Reason study finds, low end estimates of the social impact of carbon dioxide emissions shows increasing greenhouse gas levels may produce overall beneficial effects, producing more benefits than costs, while even high cost estimates from an ongoing rise in carbon dioxide emissions will be very unlikely to result in catastrophic harms, with costs far lower than the policies enacted to prevent climate change.

H. Sterling Burnett, Ph.D., ([email protected]) is the managing editor of Environment & Climate News.

Internet Info

Julian Morris, “Assessing the Social Costs and Benefits of Regulating Carbon Emissions”