Social Cost of Carbon Estimates Jump: Pollution is More Expensive

How expensive is carbon dioxide? It turns out that the costs may be more serious than we first expected. The EPA and other federal agencies are now using a higher social cost for carbon when it comes to creating new legislation.

So what is the social cost of carbon? It's meant to be a comprehensive estimate of climate change damages. This means that it includes changes in net agricultural productivity, human health and property damages from increased flood risk. In the past, this cost was estimated at about $22 per ton. Now, though, officials have upped that number to $36 per ton, according to the Washington Post. That adds up quickly with the amount of carbon that the U.S. produces.

The social cost of carbon was actually first imagined in 2010. The EPA and other agencies participated in an interagency working group that convened in 2009 to 2010 in order to figure out estimates for the cost of carbon. The group used three integrated assessment models, which each combined climate processes, economic growth and feedbacks between the two in a single modeling framework. They first decided on $21 per ton of carbon dioxide, which was then raised to $22 by 2013.

Now, though, the estimate has changed again. Models have been up updated, which means that the cost of carbon also has to be updated. More specifically, climate models showed the potential future damage from sea level rise and increased suffering in agriculture.

"These updated values are well within the range of mainstream estimates," said OMB spokeswoman Ari Isaacman Astles in an interview with The Washington Post. "Indeed, similar estimates are used by other governments, international institutions and major corporations."

Yet there are those who disagree with these new calculations. In fact, some economists have redone the calculations and have found the actual social cost could be up to 12 times as large as the 2010 estimate, according to Discovery News.

So why does this matter? It can affect government regulations when it comes to energy-efficiency standards in electronics and appliances. In addition, the new social cost of carbon could help stem further degradation by encouraging companies to invest in energy saving methods. What the real social cost for carbon is, though, remains to be seen.