Social cost of carbon

Dec. 9, 2013
Anyone disconnected from news for the past quarter-century would find perplexing the US government's new review of its methods for establishing the social cost of carbon (SCC).

Anyone disconnected from news for the past quarter-century would find perplexing the US government's new review of its methods for establishing the social cost of carbon (SCC). The phrase would take such a person aback. He or she might wonder, first, what a "social cost" is. Next might come questions about how cost relates to one of the world's most abundant elements, an essential ingredient of life. Indeed, the public conversation about global warming can vex even people who have kept up with the colloquy.

The history of swerves and distortion in the global warming debate helps explain how adults can be fussing now over how to estimate SCC without laughing over the inherent futility. One such swerve makes "carbon" shorthand for "carbon dioxide," the greenhouse gas (GHG) for which human beings are most responsible. CO2 receives blame—part or full, depending on who's talking—for industrial-era warming of the atmosphere. Many observers, maybe most, believe globally averaged temperature increases mostly as a function of the CO2 concentration in the atmosphere. If CO2 rises, temperature must rise; therefore, to prevent ruinous warming, humans must arrest the CO2 buildup, for which combustion of fossil fuels is largely responsible. To many people, the issue begins and ends here.

Open questions

But it's not that simple. CO2 exists in trace amounts in the atmosphere and can't produce dangerous warming by itself. It must strengthen some other influence, probably water vapor, a far more abundant GHG. The extent to which it does—if it does—remains an important question with no clear answer. Failure of the temperature record to track model predictions indicates much remains to be learned about the relationship between CO2 and warming. The political debate should address what prudent and affordable precautions might be in order until more is known about core questions, including whether human remedies can have appreciable effect.

Yet the public debate tolerates no view other than the insistence by extremists on immediate action, regardless of cost. That strategy is self-defeating. Cost always matters. European governments, self-appointed leaders in the salvation of climate, are learning this the hard way as citizens slammed by high electricity bills turn against programs to decarbonize energy. Americans, too support global-warming policy responses until energy prices begin to rise.

The administration of Barack Obama nevertheless yearns to restructure the energy economy of America. Unable to cram a cap-and-trade scheme, which is a carbon tax in disguise, through Congress, it is pressing the campaign through regulation. In the process, terminology becomes grotesque.

Authorized by a Supreme Court decision that addressed legal rather than scientific questions, the Environmental Protection Agency has undertaken regulation of GHGs under the Clean Air Act. So now, because the statute governs pollution of air by ozone, sulfur dioxide, and other unhealthful substances, CO2 is a "pollutant," although popular drinks, even people's lungs, are full of it. Combining that contortion with the shorthand version of CO2 yields "carbon pollution"—a phrase Obama nowadays uses profusely. When the construction interacts with the need for regulators to estimate costs and benefits of pollution controls, the nation becomes burdened with irreconcilable conflict over the "social cost of carbon." And regulation becomes guesswork.

Estimating the immeasurable

This abstraction predates Obama. It resulted from a court decision during the administration of former President George W. Bush. Since then, the Obama team has given it full embrace. The Department of Energy aroused Republican suspicions last May when a regulation involving the energy efficiency of microwave ovens indicated SCC values, and therefore the calculated benefits of GHG controls, had been hiked materially without public comment. Last month, the White House Office Management and Budget released new SCC estimates and opened a comment period.

So goes carbon regulation. A building block of life becomes a toxin, and justifications depend on estimates of the immeasurable. Anyone new to the process might think it a ploy to manipulate behavior and raise taxes without a vote.

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