The U.S. government is seriously underestimating the negative effects that CO2 emissions and subsequent global warming have on the quality of human life, new research shows. These consequences – known in economics as “social cost” – include worsening human health, damages from rising sea levels, and changes in agricultural productivity.
The study, published in the Nature journal on Sept. 1, estimated the social cost of global warming at $185 per metric tonne: an assessment much higher than the current U.S. estimate of $51 per metric tonne.
“Higher estimates of the social cost motivate more ambitious mitigation of greenhouse gas emissions,” Brian Prest, co-author of the research and an economist at the non-profit Resources for the Future, told Reuters.
As greenhouse emissions are the biggest driving force behind global warming, the measure is important for the regulation of such emissions from power plants and vehicles. The metric is also used to estimate federal tax credits on carbon capture and storage (CCS) and in proposing federal tax legislation.
A report by the U.S. National Academies of Sciences, Engineering and Medicine published in 2017, however, established that the government’s way of calculating the social cost of CO2 emissions is outdated. The new Nature study confirmed this, saying that the government relies on old climate models. The Nature study uses improved projections, climate models, and economic discounting.
While the Trump administration cut the social cost estimate to under $10, Biden brought back the Obama estimate of $51 and the U.S. administration is now working to update this number.
“The higher the social cost of carbon, the better off future generations will be,” Jim Krane, an energy policy expert at Rice University in Texas, told Reuters.
Other countries across the globe also incorporate the social cost metric. Canada puts their estimate at $50 CAD ($38 USD), while Germany uses a much higher number – 180 euros ($178.92).