By CHIP KNAPPENBERGER
Posted 10/28/13 INVESTOR'S BUSINESS DAILY
Posted 10/28/13 INVESTOR'S BUSINESS DAILY
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 externalities, both positive and negative, resulting from carbon dioxide emissions released by burning fossil fuels like coal, oil, or natural gas.
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 completely ignores a large and growing body of scientific evidence that suggests that the Earth's climate is much less sensitive to carbon dioxide emissions than the administration assumed.
This means that carbon dioxide emissions result in less global warming, less sea level rise, and less overall climate impact than previously thought.
In other words, the social "costs" that may result from human-caused climate change are substantially, some 33%, less than those in the administration's calculation.
Another important point largely ignored by the current administration is that there are "benefits" in addition to the "costs" of carbon dioxide emissions.
One of the key benefits is enhanced global food production. Carbon dioxide is a fertilizer for plants, and more carbon dioxide in the atmosphere means stronger, healthier, and more productive vegetation, including most crops — a fact established by literally thousands of scientific studies.
A new analysis by Dr. Craig Idso of the Center for the Study of Carbon Dioxide and Global Change estimates that over the last 50 years, the value of global food production has increased by $3.2 trillion as a result of our carbon dioxide emissions.
The handling of this large, significant and proven benefit from carbon dioxide is grossly deficient in the administration's accounting of the social cost of carbon.
Had the new science on the Earth's climate sensitivity to carbon dioxide, the science on carbon dioxide's role as a plant fertilizer, and other critical issues not been largely ignored, the administration's latest estimate of the social cost of carbon would have dropped to near zero, or perhaps actually become negative.
A proper accounting of the social cost of carbon would have sheathed the administration's blade, or even turned it upon itself, as Congress and the American people would see the true cost of the regulations being imposed on them, and the president's climate war effort would be eviscerated for lack of alarm.
• Knappenberger is the assistant director for the Center for the Study of Science at the Cato Institute.
Prior posts on Obama's social cost of carbon trick