The Office of Management and Budget is revising the social cost of carbon, and the gates are open for public comment. Go on! Contribute if you have an idea about how much climate change might cost, in a social sense.
The figure gets plugged into all kinds of benefit-cost analyses — today’s imprimatur of efficaciousness — in the hunt for optimal policies that weigh climate change mitigation and adaptation against other worthy ways to spend money. Is it economically sensible to build a seawall now and fend off the uncertain rise in ocean levels decades down the road? Is it a good idea to demand power plants capture their carbon and inject it underground (assuming that’s a functional technology)? Should we simply dump all of our money into renewables? Or what about into energy efficiency?
How do we get the most bang for our buck when dealing with climate change?
Another tough question. And maybe also the wrong question.
I wrote about this once before, covering a debate between law professor Doug Kysar and economics professor Matt Kotchen. And a summary published last month in Environmental Research Letters by Jonathan Koomey tackles the same thorny issue with full-throated advocacy for a new approach. “The benefit-cost approach,” writes Koomey, “while it has been useful in many contexts, has serious limitations that call into question its utility for analyzing climate change.”
So what do we do instead? The proposal is to focus on physical limits — 2 degrees Celsius, in this case — and devise the optimal policy for reaching that goal. In this way, we’re determining costs within given, necessary boundaries. It will be interesting to see if, or when, this takes hold.
At least Koomey sings optimism: “I call this method ‘working forward toward a goal’, and it’s one that will see wide application as we face the climate challenge in the years ahead.”