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Obama's 'Social Cost of Carbon' Is at Odds with Science

October 28, 2013 in Economics

By Paul C. "Chip" Knappenberger

Paul C. “Chip” Knappenberger

The Obama administration’s latest, greatest weapon to prosecute its war on global warming is something called the “social cost of carbon.” It is an instrument honed on ill-founded climate alarm and is readily blunted in the face of the best science.

The social cost of carbon is supposed to be a complete accounting of the market externalizes, both positive and negative, resulting from carbon dioxide emissions released by burning fossil fuels like coal, oil, or natural gas.

In its pursuit of a high social cost of carbon the administration is going further down a path that is divergent from the one paved by the very best science on the issue.”

But as its name implies, the government’s accounting of the social cost of carbon focuses almost entirely on conjured “costs” while ignoring proven “benefits” of carbon dioxide emissions.

The administration has determined that each ton of carbon dioxide emitted into the atmosphere today from human activities leads to a future cost to global society of about $40 (in today’s dollars).

This assigned $40 premium on carbon dioxide emissions proves to be a powerful sword that the administration has been wielding to slash the apparent costs of a flurry of proposed new rules and regulations aimed at reducing emissions.

Here’s how it works: any new proposed regulation viewed as reducing future carbon dioxide emissions gets a cost credit for each ton of reduced emissions equivalent to the value of the social cost of carbon. That credit is then used to offset the true costs.

In this way, all qualifying rules and regulations, including the EPA’s promised emissions limits on new and existing power plants, appear less costly — a critical asset, as costs are often the greatest barrier to approval.

Since the war on global warming is a high priority within the Obama administration, finding ways to make the social cost of carbon appear to be as high as possible is the ongoing objective.

Back in May, the administration increased its previous estimate by more than 50%, from $25 to $40, which means that all proposed carbon dioxide emissions cuts are now some 50% more valuable.

But that increase doesn’t jibe with science. In fact, in its pursuit of a high social cost of carbon the administration is going further down a path that is divergent from the one paved by the very best science on the issue.

For example, its new estimate …read more

Source: OP-EDS

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