The Biden Administration is not just saving America from Donald Trump. It’s saving the whole planet. And one way is that it just raised the social cost of carbon from 8 bucks a tonne to 58 million billion. OK. That’s an exaggeration. The real figure is $51. And $1,500. And $18,000. Notice anything suspicious? Right. Not that there are three, for CO2, CH4 and NO. That they just made those numbers up.
It would have been a lot better to have a computer make them up. After all, what models want, models get, right? And these numbers do have that lovely “Let’s input this and see if something scary comes out” feel to them.
They were released by those noted climate scientists, the Office of Management and Budget, back on Feb. 25. And, the noted climate scientist/economists at Politico (specifically Lorraine Woellert, “Sustainability Editor” and former political reporter with a degree in “English Literature” who calls herself a “Grad school dropout”, and Zack Coleman, “an energy reporter” with degrees in “Journalism, International Relations, Jewish Studies” and “Public affairs reporting”) whined, “the administration stopped short, for now, of boosting the cost figure to higher levels that economists and climate scientists say are justified by new research.” So brace yourself.
Not for information about who these “economists and climate scientists” are. For higher prices. “The price point is temporary. A new Interagency Working Group on the Social Cost of Greenhouse Gases is required to issue a final number by January.” And how will it be done? “’A more complete update that follows the best science takes time. This is why we are quickly restoring the prior estimates as an interim step,’ Heather Boushey, a member of the Council of Economic Advisers, wrote in a blog post.” BTW Dr. Boushey has a PhD in economics.
We mention these things because when someone questions climate orthodoxy a bunch of people will pounce and say they are not climate scientists and we feel sauce for the goose is sauce for the activist. But back to our strangely round numbers and “the best science.”
As Woellert and Coleman note in Politico, “The social cost of carbon is an effort to quantify the economic and societal damage from greenhouse gas emissions in the coming decades.” The problem being that we don’t know what is going to happen if we don’t reduce emissions, or what is going to happen if we do, so we can’t compare them and then discount at an appropriate rate.
They do anyway. They got the $51 for CO2 by changing Trump’s discount rate of 7%, which he also just made up or someone around him did, to 3%.
According to Politico, “The new price per ton is accompanied by discount rates of 2.5 percent, 3 percent and 5 percent, numbers that express the weight of future benefits against immediate ones. A higher discount rate suggests society cares less about long-term consequences than present-day effects. Environmental activists and economists had urged Biden to lower the 3 percent discount rate set by Obama…. When the Obama team modeled its estimates in 2016, a 3 percent discount rate carried a $42 per ton price. A 2.5 percent discount rate pushed the cost to $62 per ton. Under the figures released Friday, the social cost of carbon will be $51 with the 3 percent discount rate applied. A discount rate of 5 percent would push the price per ton to $14.” So is it accompanied by 2.5%, 3% or 5%?
It doesn’t really matter. When you make up a figure, then discount it by another made-up figure, you get number salad. As is obvious from methane getting a $1,500/tonne price rather than, say, $1,497.28, which would at least look like you used a calculator, and likewise nitrous oxide getting $18,000. Wow. Three zeroes.
The thing is, science has spoken. Politico quotes a disinterested observer that Trump stinks ha ha ha. As in “This is to be celebrated for getting the social cost of carbon out from being a political football, which is what Trump did, but it’s Step One. Step Two is restore a transparent process and to return the social cost of carbon to the frontier of climate science and economics.” The disinterested observer being “Michael Greenstone, a University of Chicago economist who played a primary role developing the Obama-era social cost of carbon.” Who added, “I view this whole thing as a reset and now they will go out and engage.” Engage what?
The wheels of bureaucracy, apparently. “The Interagency Working Group, led by the Council of Economic Advisers, Office of Management and Budget and Office of Science and Technology Policy, must issue recommendations on incorporating the cost into government decision-making and budgeting by September and deliver a final number by January.” And there you have it, folks. The “best science”. From people who knew what they were looking for before they started and found it by making it up.
Or, as Politico delicately puts it, “Calculating the social cost of carbon is a complex endeavor that represents economists' attempt to quantify the long-term effects of greenhouse gases on society, for example, rising health costs caused by climate change, property damage from flooding and business losses due to extreme weather. Economists and environmentalists had pushed the Biden administration to fundamentally change the climate modeling that's used to calculate social costs in ways that would increase the figure and thereby make federal approval of fossil fuel projects harder to justify.”
Aka verdict first, trial afterwards.