Yesterday, the House Subcommittees on Environment and Oversight held a hearing on the social cost of carbon. The Republican Congressmen and their witnesses argued the federal estimate is too high, but a majority of economists think it’s too low. Not surprisingly, the Republican witnesses have been heavily funded by the fossil fuel industry. They made two main arguments: 1) that the $37 estimate should be based on domestic, not global climate impacts, and 2) that the government should have used a higher discount rate, which would result in a lower estimate.
Both arguments are entirely backwards.
Carbon pollution causes expensive global climate damages
The first argument, articulated by Chairman Andy Biggs (R-AZ), is an immoral one:
It is simply not right for Americans to be bearing the brunt of costs when the majority of benefits will be conferred away from home.The “benefits” other countries would reap are effects like reducing the decimation of their crops by climate-fueled droughts. An accurate rephrasing of this statement would read: ‘It is simply not right for Americans pay for their carbon pollution when the majority of the costs and damages will be borne by poor people in third world countries.’ When framed accurately, it’s a completely unethical argument.
Moreover, those long-term global climate damages make a clear case for a higher carbon pollution cost. According to a recent paper by William Nordhaus – one of the world’s foremost climate economists – if we want to stay below 2.5°C warming above pre-industrial temperatures (let alone 2°C), the social cost of carbon today is between $100 and $200 per ton of carbon dioxide pollution, and rises by about $10 per year. This conclusion is consistent with several recent studies estimating the carbon cost around $100 to $200 per ton or more.
Avoiding dangerous climate change will require a much higher carbon pollution price than the federal estimate, but Republicans think a lower price is better for the economy. Nordhaus’ recent paper also presented an “optimal” cost-benefit scenario that would put a carbon tax today around $30 per ton and result in over 3.5°C global warming above pre-industrial temperatures. So what’s going on there?
Read more at Republican Hearing Calls for a Lower Carbon Pollution Price. It Should Be Much Higher