Cost of Carbon Pollution Estimates Jump 60% in Two Years

Every ton of carbon dioxide emitted this year will cost the nation an estimated $35, according to a new report issued by the Office of Management and Budget (OMB).

The estimate represents a 60 percent increase over 2010’s $21 and is meant, according to the Environmental Protection Agency (EPA), to be a comprehensive estimate of climate change damages and includes changes in net agricultural productivity, human health and property damage from increased flood risk.

It does not include, the EPA continues, “all of the important physical, ecological and economic impacts of climate change recognized in the climate change literature” due to a “lack of precise information on the nature of damages” as well as a lag between the most recent studies on the subject and the incorporation of their findings into the models to calculate the effects.

OMB Spokeswoman Ari Isaacman Astles defended the estimate in saying, as reported by The Hill, that the new number is in agreement with many other estimates.

“These updated values are within the range of mainstream estimates; indeed, similar estimates are used by other governments, international institutions and major corporations,” she said.

In terms of policy, regulatory experts believe the change could help the White House move forward with controversial rules such as those designed to limit emissions from power plants.

“It certainly gives them a justification to be more aggressive than they otherwise would be,” Jeff Holmstead, the EPA’s air quality chief under former President George W. Bush, told The Hill of the update.

In the past, the Obama administration’s estimate for social cost of carbon dioxide has been criticized for being too low, in particular by the economists Frank Ackerman and Elizabeth Stanton who, in 2010, authored the report Economics for Equity and the Environment.

In it, the researchers found that the true dollar amount is closer to $1,000 than either $20 or $30.

“The very low numbers are based on outdated and unrealistically optimistic estimates on what’s going to happen,” Ackerman told The New York Times at the time.

Regardless of the true number, however, the two write in their report Emmission Reduction, Interstate Equity, and the Price of Carbon that the “fate of the earth may depend on U.S. success in reducing greenhouse gas emissions. And the U.S. climate policy may depend on its success in addressing the fears that it will cause economic harm.”

Thus, by arguing that money is ultimately loss by avoiding the issue of greenhouse gases, the writers believe that not only lawmakers, but the general public may feel better about enacting stricter policies.