Cost of global warming may be higher than government estimates

As part of its effort to regulate greenhouse gas emissions, the federal government a few years ago assigned a “social cost” to carbon, estimating the economic damage done by 1 ton of carbon dioxide emissions at $21. Australia came up with a similar figure last year. But new research suggests the real cost may be vastly higher, Dan Watson reports at Miller-McCune.

The number is important because it helps determine what it’s worth to control carbon emissions, whether through a carbon tax, a cap-and-trade system, improved auto efficiency standards or other means. Australia has begun assessing its 500 biggest polluters about US$24.50 per ton of carbon based on its calculation of the social cost.

A new peer-reviewed report, “Climate Risks and Carbon Prices: Revising the Social Cost of Carbon,” by economists Frank Ackerman of Tufts and Elizabeth A. Stanton of the Stockholm Environmental Institute, suggests that the true cost of carbon is far less certain and probably much higher than either of the government estimates. The US estimate of $21 per ton “omits many of the biggest risks associated with climate change, and downplays the impact of our current emissions on future generations,” the researchers said.

Their review found that the current cost of carbon emissions is at least $28 per ton, and possibly as much as $893; that figure could rise to $1,500 per ton by 2050. If the true costs are anything like their worst-case scenarios, they said, “then almost anything that reduces emissions is worth doing.”