For an article on the topic of the social cost of carbon—an estimate of the cost to society of emitting greenhouse gases, factoring in harm to human health, increased risks of disasters, damage to ecosystems, and more—MIT Technology Review spoke with Near Zero’s Danny Cullenward:
To date, the social cost of carbon hasn’t generally been the make or break factor on any given public policy cost-benefit analysis, says Danny Cullenward, a Stanford lecturer and energy economist. Rather it provided an additional economic and climate justification for policies. In the same way, it’s not likely to be the single underpinning that, once watered down or removed, suddenly allows the Trump administration to enact the sweeping changes to environmental rules that they aspire to make anyway.
The bigger play here is to dull or destroy an instrument that could become much sharper in the future, as the mounting body of science provides a clearer sense of the true, higher cost of greenhouse gas emissions.
“It was much more a tool intended to be proactive on climate policy, rather than as a defensive line to hold ground,” Cullenward says.
It’s unclear if the Trump administration will simply allow federal agencies to each calculate their own social cost of carbon going forward, or eventually issue a new, more favorable one through an executive order or other means. Among other possibilities, agencies could shrink the estimated cost by narrowing the geographic scope from global to domestic, or increasing the discount rate, which is used to account for the lower value society places on damages in the distant future, Cullenward says. Crucially, the guidelines cited in Trump’s executive order called for a discount rate as high as 7 percent, compared to rates as low as 2.5 percent under the current calculations.
Read the full article, “Trump Efforts to Blunt Climate Tool Likely to Provoke Legal Backlash” by James Temple, on the MIT Technology Review website.