social cost of carbon
President Trump’s Executive Order on climate policy is an invitation to bad policymaking and legal uncertainty. The big-ticket item targeted by the Order, of course, is the Obama Administration’s Clean Power Plan and related rules on carbon dioxide emissions from power plants. The EO has limited immediate legal impact: none of the major rules can …CONTINUE READING
The true victims aren’t you and me. It’s our descendants who will pay the price, long after Trump is gone.
We live in a time of contrasts. Yesterday, scientists reported more evidence that climate change will intensify heat waves and droughts in temperate zones through changes in the jet stream. Today, however, the Trump Administration initiated the process of eliminating federal climate policies. In a pointed insult to EPA staff who have worked long and …CONTINUE READING
Considering climate impacts isn’t just a good idea. It’s the law.
Many people seem to think that considering climate impacts and the social cost of carbon was just a policy decision by the Obama Administration, which Trump if he doesn’t buy the reality of climate change. But it’s not that easy. But there are strong arguments that considering climate change is mandatory. First, the whole idea of considering …CONTINUE READING
We can impose a price on carbon without a tax or emissions trading. Here’s how.
Cap and dividend is a politically appealing idea; put a price on carbon, then refund the money to consumers in equal shares. But conservatives and libertarians object to this idea on two grounds. First, cap-and-trade systems are complex and require a lot of regulatory oversight. Second, if the government collects the money, despite its current …CONTINUE READING
Merging Cost-Benefit Analysis and Feasibility Analysis
The U.S. government has devoted a lot of time and effort to estimating the social cost of carbon. This is basically a standard exercise in cost-benefit analysis, following a familiar three-step process: 1. Impacts. Figure out the physical impacts of the emissions. This involves setting up some emissions scenarios and then running computer simulations to …CONTINUE READING
Tomorrow’s Emission Determine Today’s Social Cost of Carbon
Here’s the weird thing: the social cost of carbon today, depends significantly on the year-by-year emissions of carbon in the future, which we obviously don’t know. (Because it depends on our own future actions!) It takes some explanation to show why that’s true and how it matters. If you know a bit about climate policy, you know …CONTINUE READING
A recent CRS report provides a wealth of information about carbon capture. You can learn a lot about the various technologies and how close or far they are from possible adoption. But for most of us, the technical details matter less than the answers to some key questions: Is carbon capture technically feasible? Can it …CONTINUE READING
Last week, the House passed HR 1582 on a 232-181 vote. The law is designed to restrict EPA regulation of power plants, but the House also adopted an amendment that takes a swipe at environmental economists. HR 1582 is mercifully brief and to the point. When EPA proposes a rule that would impose over $1 billion …CONTINUE READING
In 2010, an inter-agency task force provided a series of estimates of the “social cost of carbon” to guide government cost-benefit analyses. The estimates vary with the discount rate and the date. For instance, using a 5% discount rate, it would be worth spending hardly anything — only $4.70 — to eliminate a ton of CO2 …CONTINUE READING
Many people are worried that a high national debt imposes a burden on future generations, though not all economists agree. But carbon emissions are also a burden on later generations — the CO2 will stay in the atmosphere many decades to come, causing damaging climate change. If we’re worried about burdens on later generations, is …CONTINUE READING