Social Cost of Carbon Dioxide

The Obama administration recently increased the federal government’s estimated social costs for carbon emissions. The federal government’s asserted social costs for carbon emissions are important because they are a major factor in federal government decisions regarding land development, business permits, energy production, carbon dioxide restrictions, and a host of other applications. A review of the Obama administration’s asserted costs show they are flawed in many particulars.

The White House Interagency Working Group technical document for how to calculate a “Social Cost of Carbon” (SCC) will be used to “allow agencies to incorporate the social benefits of reducing carbon dioxide (CO2) emissions in cost-benefit analyses of regulatory actions that impact cumulative global emissions.”

The White House document makes many scientifically dubious assumptions that allow the federal government to assign unrealistic social costs to carbon dioxide emissions. For example, the technical document dubiously assumes higher atmospheric carbon dioxide concentrations harm agricultural production, even though carbon dioxide serves as aerial plant fertilizer. U.S. crop production continuously sets new records for gross yields and yields per acre as atmospheric carbon dioxide levels rise. The same holds true on a global scale, with global production of food staples doubling and tripling during the past 40 years as atmospheric carbon dioxide levels rise.

Similarly, the White House’s technical document dubiously assumes rising sea levels will inundate coastal regions, resulting is substantial land loss. There was no such occurrence during the twentieth century, as sea level rose approximately seven inches, and there has been no acceleration of sea level rise during the twenty-first century.

Strikingly, the technical document totally ignores the many benefits of carbon dioxide emissions and their assumed climate impacts. Hurricane frequency and severity have substantially lessened as carbon dioxide emissions have risen. Tornado frequency and severity have substantially lessened as carbon dioxide emissions have risen. Global and U.S. soil moisture have substantially improved, and foliage density, particularly in the U.S. West and arid regions throughout the world, has dramatically increased.

In another glaring shortcoming, the technical document does not provide relative comparisons for the social costs of the environmental impacts of non-carbon energy sources. For example, U.S. wind turbines, while providing less than 3 percent of the nation’s electricity, kill at least 1.4 million birds and bats—including many endangered species—every year. Also, according to the wind industry’s own numbers, it requires 300 to 600 square miles of wind turbines to replace a single conventional, carbon-emitting power plant (and the plant must remain open and running anyway, because of the unreliable, intermittent nature of the wind). Measuring and placing a price on the asserted social costs of carbon emissions, while failing to do the same for negative environmental impacts and social costs associated with other energy sources, is not an honest, apples-to-apples assessment.

Robert Murphy of the Institute for Energy Research told the U.S. Senate the SCC estimates could have “profound impacts on both industry and consumers.” SCC estimates are extremely malleable, Murphy testified, because they depend on very subjective modeling assumptions which can allow government agencies to produce studies justifying whatever policy they desire. Policymakers and regulators should be aware of the SCC’s unreliability as a scientific measure and not use it to justify regulations.

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