Saturday, September 29, 2018

Country-level social cost of carbon

The social cost of carbon (SCC) is a commonly employed metric of the expected economic damages from carbon dioxide (CO2) emissions. Although useful in an optimal policy context, a world-level approach obscures the heterogeneous geography of climate damage and vast differences in country-level contributions to the global SCC, as well as climate and socio-economic uncertainties, which are larger at the regional level. Here we estimate country-level contributions to the SCC using recent climate model projections, empirical climate-driven economic damage estimations and socio-economic projections. Central specifications show high global SCC values (median, US$417 per tonne of CO2 (tCO2); 66% confidence intervals, US$177–805 per tCO2) and a country-level SCC that is unequally distributed. However, the relative ranking of countries is robust to different specifications: countries that incur large fractions of the global cost consistently include India, China, Saudi Arabia and the United States.

by Katharine Ricke, Laurent Drouet, Ken Caldeira & Massimo Tavoni 
Nature Climate Change
Volume 8, Published: 24 September 2018; pages 895–900

which appeared in Inside Climate News Stacy Morford notes that the future economic costs within the U.S. borders are the second-highest in the world, behind only India."
The results suggest that the U.S. has been underestimating how much it benefits from reducing its greenhouse gas emissions and that the country has far more to gain from international climate agreements than the Trump administration is willing to admit.
"Our analysis demonstrates that the argument that the primary beneficiaries of reductions in carbon dioxide emissions would be other countries is a total myth," said lead author Kate Ricke, an assistant professor at the University of San Diego's School of Global Policy and Strategy and Scripps Institution of Oceanography.
Some smaller countries are expected to lose significantly larger portions of their economies to climate change. But the authors found, after modeling hundreds of scenarios, that the U.S. consistently faces among the costliest damages, as measured by what economists call the social cost of carbon....
The U.S.'s share of the global damage, about 12 percent according to the study, is slightly less than its share of the global emissions. But India's share of the damage is four times higher than its contribution.
Countries' share of global social cost of carbon vs. share of global emissions
The case of Russia shows how some of the major emitters could even gain from rising temperatures, as a warming Siberia would benefit Russia economically in the short term, according to the findings, (though the estimates don't account for longer-term impacts the country will face, such as damage to Arctic ecosystems and the rising ocean). Northern Europe and Canada also could have low costs or even short-term net benefits from CO2 emissions, according to the estimates.
If these countries only considered the current economic impact within their borders, they would appear to have little incentive to cut their emissions.
The U.S. government uses a social cost of carbon in its cost-benefit analyses when it designs new environmental regulations or rewrites old ones, but its numbers are much lower than those in the study.
The Obama administration set its median social cost of carbon at about $42 per metric ton for 2020. It based that on calculations of the global harm being created by each ton of U.S. emissions. When the Trump administration came in, it argued that the social cost of carbon should only address the impact on the U.S., and it wanted a higher discount rate. When the Trump administration issued its cost-benefit analysis for rolling back the Clean Power Plan, it cited numbers closer to $3 per ton.
Looking just at the impact within U.S. borders, the new study estimates the U.S. social cost of carbon emissions is nearly $48 per ton.
That wouldn't support the Trump administration's plans for weakening the Clean Power Plan and energy efficiency standards.

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