Carbon should cost 3.6 times more than US price, study says

Each ton of carbon dioxide that exits a smokestack or tailpipe is doing far more damage than what governments take into account, researchers conclude in a scientific paper published Thursday.

Major hurricanes pack more rain, while extremes of wildfire, drought and downpours are all happening more often and with more intensity due to climate change, causing loss of communities, homes and lives all over the world. But what is the actual cost in dollar terms of the carbon emissions driving climactic change?

That’s what researchers from a variety of fields — science, economics, medicine — are trying to figure out through a metric called the social cost of carbon, a price that represents the total climate damage caused to society through carbon emissions. It’s been used in the past to justify tougher limits on carbon emissions and more spending on climate solutions, like transitioning to renewable energy and natural flood protection.

Currently, the United States government uses a price of $51 per ton of carbon dioxide emitted, but the researchers wrote in the journal Nature that the price should be $185 per ton — 3.6 times higher than the current U.S. standard.

“Our results suggest that we are vastly underestimating the harm from each additional ton of carbon dioxide in the atmosphere,” said Kevin Rennert, a study author and director of the federal climate policy initiative at Resources for the Future, an environmental nonprofit based in Washington, D.C. “And the implication is that the benefits of government policies and other actions that reduce global warming pollution are greater than has been estimated.”

Researchers began calculating damages from carbon emissions in the 1980s and before 2017, the last updates to the modelling were in the early to mid 1990s, “when the Counting Crows were still at the top of the charts,” said Max Auffhammer, an author of the 2017 report and professor of international sustainable development at the University of California, Berkeley. Auffhammer, who was not involved in the Nature study, praised the updated model.

While the social cost of carbon has been considered in more than a dozen actions under Biden – including tougher fuel efficiency standards for cars and light trucks and new oil and gas lease sales on public lands – federal officials have said in court briefings that so far it has not been a deciding factor.

The Biden administration was due to release an updated estimate in January, but that was delayed in part by the litigation from states.

The White House said it is still reviewing the best way to price climate damages when making policy decisions. But officials already have determined that the interim price of $51 per ton is too low. In an analysis of the new climate law published last week by the White House Office of Management and Budget, officials wrote that “the interim social cost of carbon estimates are currently significantly underestimated because they do not account for many important climate damage categories, such as ocean acidification.”

An agency spokesperson declined to give a timeline for a new cost estimate.