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« Leavers on the line - Josh 338 | Main | Greenpeace's failed predictions »

Cost of global warming wildly exaggerated

Enthusiasts for a carbon tax tend to lick their lips at the sheer size of the numbers that have been conjured up out of the economic models. They see a door opening to massive economic changes, with societal change on the horizon too.

Today the door has been pushed back somewhat, with a new paper in Energy Economics by a multinational team of authors led by Zuzana Irsova of Charles University in Prague (there is a preprint here). She and her colleagues have been looking into published estimates of the social cost of carbon and find good evidence of a strong publication bias. You can probably guess which direction the bias is in:

The largest corrected mean SCC we get for estimates with uncertainty is USD 134 per ton of carbon at 2010 prices for emission year 2015; because the uncorrected mean of these estimates is 411, our results indicate that the reported estimates of the SCC are exaggerated at least threefold on average because of the selective reporting bias. The largest corrected mean SCC we obtain for study-level estimates with or without uncertainty is 61, which is more than four times less than the overall mean of 290.

These are costs per tonne of carbon. In costs per tonne of carbon dioxide, their results are coming out at $39, so you can see how this is going to dampen the spirits of those, like Ackerman and Stanton, who advocate for a value in excess of $1500.

And with a delightful sting in the tail, they close by suggesting that this may actually mask the true scale of the problem:

[O]ther studies suggest that some of the parameters used for the calibration of integrated assessment models, such as climate sensitivity or the elasticity of intertemporal substitution in consumption, are likely to be exaggerated themselves because of selective reporting...which might further contribute to the exaggeration of the SCC reported in individual studies...


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Reader Comments (71)

Aug 21, 2015 at 11:18 PM | Unregistered CommenterChris Hanley

Are you saying that the benefits accrued from the industrial revolution are worth less?

Were Ned Ludd and his friends right?

Aug 22, 2015 at 11:39 AM | Unregistered CommenterClovis Marcus

why are we talking about the cost of CO2 , when it is actually a dividend/boon ?

When we were to discuss earth farming solutions for more food, more benign weather and pay billions to universities and institutes to come up with solutions, I am sure they would promote releasing CO2.

It is just they are paid to demote CO2 now..

this is similar to "studying" the cost of chernobyll on the population, while it was a boon.
(granted 100 firefighters died from bunr wounds and 100s of children got cancer because they did not get iodium saturation therapy in time from their commie mayors)
nobody ever studies the benefits of free radiation therapy to 500M people who would otherwise get earlier their cancers.

Aug 22, 2015 at 11:51 AM | Unregistered CommenterVenusNotWarmerDueToCO2

Chris Hanley
There are two things wrong with your calculation.
The first is that there is no sensible way of measuring a cost per tonne of CO2 and I doubt that such a concept even makes sense.
The second is that that is a gross cost wth no allowance made for any benefits.
As Clovis Marcus implies, are you suggesting that no benefits accued from two hundred years of industrial development? If you aren't then you need to calculate what the monetary benefit has been of each tonne of CO2. Good luck with that!
The more I try to wrap my mind round this whole cost/benefit of CO2 argument the more I believe that it is just one more attempt to distract from the emperor's lack of clothes.

Aug 22, 2015 at 11:54 AM | Registered CommenterMike Jackson

What clothes? ^.^
What costs?
What about a cost/benefit analysis of the DECC during the coalition?
What about the rumour that all life on earth is carbon based? No CO2 - no life.

Aug 22, 2015 at 2:49 PM | Registered CommenterDung

Threat of global warming wildly exaggerated.

Costs of global warming wildly exaggerated.

Why are we wasting billions, enriching the few, to ensure billions suffer?

Aug 22, 2015 at 5:52 PM | Unregistered Commentergolf charlie

Chris Hanley says "Even at the modest estimated cost of $39 per tonne the social cost of industrialisation so far has been over $13,000,000,000,000."

Perhaps he would like to estimate the social benefit of industrialisation since 1750 - I bet it is many multiples of the cost he calculates above - and please can he show how he justifies the $39/ ton figure ( from some first principles please).

Aug 22, 2015 at 6:44 PM | Unregistered CommenterFriend of Botswana

Chris Hanley pulled the $39 out of his nether region. There have been no adverse impacts of CO2 in the atmosphere that have been measured to date. Storms, floods, droughts, frosts, flooding are all well within the range of historically typical.
As far as costs of industrialization, since health, population, longevity, prosperity, all increase as a result of industrialization, the assertion that there is a huge net negative cost to industrialization is simply made up nonsense.
The climate obsessed are in the position of the gullible fools who climbed on their roofs in the early 19th century to be swept up to heaven one night, only to have to climb down the next morning to face the derision of their less gullible neighbors.
Betting on apocalypses has been a losing bet through out history. The climate apocalypse is no different.

Aug 22, 2015 at 8:04 PM | Unregistered Commenterhunter

chris hanley, you chose a modest figure of $39 per ton. Why not choose $3, 900 per ton? The figure is absolutely meaningless.

The only people likely to be impressed, are the gullible feeling guilt, and the greedy who think they can send someone else a bill.

The fact that poorer countries have been persuaded to support action on climate change through the United Nations, is because their influential leaders have been promised money.

Aug 22, 2015 at 8:59 PM | Unregistered Commentergolf charlie

What is the social cost of climate science scaremongering?

Obviously there is the massive increase in the cost of most things, which only seems to pay to put useless bums on expensive seats, fasifying figures, tampering with temperatures and scandalising science.

Then of course there is the cost in human lives, simply squandered to enhance the political vanity project.

Covering the Sahara with solar reflective custard would have been cheaper, and equally pointless.

Aug 23, 2015 at 12:20 AM | Unregistered Commentergolf charlie

These Czech economists make it sound like a ton of global warming is getting cheaper all the time. To me the price always seems to go up - and I've been waiting for years.

Aug 23, 2015 at 8:02 AM | Unregistered CommenterAlan Reed

O/T Check this out

Oh dear bit of discord .
The two biggest Climate Change Cheer leaders have started slapping each other with their pom poms

Aug 23, 2015 at 10:45 AM | Unregistered Commenterjamspid

It seems my attempt at irony has fallen flat.

Aug 23, 2015 at 10:06 PM | Unregistered CommenterChris Hanley

CO2 emissions, so far, have undoubtedly had "negative costs", and have been a net benefit to both man and nature.
CO2 has caused perhaps 0.5C of warming, which has:-

Lengthened the growing season across large areas of the northern hemisphere.
Increased rainfall, especially in the southern hemisphere.
Stimulated faster plant growth due to increased atmospheric CO2

The only downside is something like 4 inches of sea level rise, which hasn't submerged a single inhabited island that I am aware of.

Aug 24, 2015 at 5:49 AM | Unregistered CommenterBill

It seems my attempt at irony has fallen flat.
Now, there's irony for you!

There’s also a little pun, there, too; was that intentional?

Bill: have any islands been inundated by sea-level rises?

Aug 24, 2015 at 7:43 AM | Registered CommenterRadical Rodent

R Tol

Pielke Jr and Lomborg have never published an estimate of the social cost of carbon,


Lomborg discusses what is called "the social cost of carbon", or SCC, by climate economists. SCC is usually estimated as the net present value of the impact over the next 100 years (or longer) of one additional ton of carbon emitted to the atmosphere today. This should not be confused with the average impact of climate change (the total impact divided by the otal emissions of carbon) (reference).
A key argument in Cool It is that if a carbon tax is introduced, it must not surpass the social cost of carbon. On page 36 he cites ONE economist, Richard Tol, for his "best guess" about the costs of emitting CO2, and this guess is $2 per ton of CO2 (that is $7 per ton of carbon). Consequently, according to Lomborg, it will reduce the prosperity of the world society to no avail if carbon taxes are set higher than $7 per ton of C. However, Tol himself does not recommend an estimate of $7/tC, but rather cites an average estimate of about $16/tC, and probably recommends to use a value of $23-25/tC. Lomborg usually leans on W. Nordhaus, but also Nordhaus has higher estimates, viz. $16 - $35/tC. And a cooperative study by fifteen economists recommend to use a value of $50/tC. So Lomborg´s estimate, which he advances with great confidence, is much lower than estimates advanced by any other professional authority. Lomborg´s low level will, of course, mean that he can recommend only very modest reductions in consumption of fossil fuels.

Lomborg in Cool It:

When I specifically asked him [Tol] for his best guess, he wasn’t too enthusiastic about shedding his cautiousness – true researchers invariably are this way – but gave a best estimate of two dollars per ton. This means that the damage we will cause by putting out one more ton of CO2 is likely two dollars… If we tax it at $85, as proposed in one radical report, while the real damage is two dollars, we lose up to $83 of social benefits (31).

Aug 25, 2015 at 4:17 AM | Unregistered CommenterEli Rabett

CO2 is a food for plants.

Pumped into real commercial greenhouses (glasshouses) for increased plant growth.
Incidentally there is no 'greenhouse effect' in real greenhouses.

The cumulative release of CO2 into the atmosphere has led to a greening of the planet.

Aug 25, 2015 at 9:37 AM | Unregistered CommenterBryan

The US EPA puts the SSC at $37/ton. This paper comes up with $61/ton. We can pretty safely rule out zero.

Aug 25, 2015 at 9:35 PM | Unregistered CommenterFelix

I agree: The social cost of CO2 is not zero. It is probably negative- The energy released from fossil fuels that results in CO2 has enabled more health, wealth, prosperity, stable and abundant food, technological innovation, communications, material science, medical, public health, longer life spans, and more life.
Certainly no serious, educated fair minded person would be so cynical as to ignore the positives that CO2 represents.

Aug 25, 2015 at 10:48 PM | Unregistered Commenterhunter

Of course among economists only Tol has seemingly considered a more realistic scenario of less than 3 degrees - so his work is the only one of any practical use. In any event the economic models used are acknowledged by Edenhofer to be worse than the climate models - which, as we all know, are uniformly pessimistic.

Aug 26, 2015 at 10:24 AM | Unregistered CommenterJamesG

The great lord weighs in...

Guardian pulpit provided - surprise not - unbelievable definitely.

Aug 26, 2015 at 11:03 AM | Registered Commentertomo

only Tol has seemingly considered a more realistic scenario of less than 3 degrees

You sure about that James G?

Aug 27, 2015 at 12:27 AM | Unregistered CommenterEli Rabett

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