A recently published study indicates climate change is costing the USA hundreds of billions of dollars per year.
The results, which were published in Nature Climate Change, use climate model projections, empirical climate-driven economic damage estimations and socioeconomic forecasts to estimate country-level contributions to the social cost of carbon (SCC). SCC is an estimate that adds up “all the quantifiable costs and benefits of emitting one additional tonne of CO2, in monetary terms” and is used to weigh the benefits of reducing global warming against the costs of cutting greenhouse gas emissions.
The study shows the global SCC is significantly higher than that used by the US American government to inform policy decisions. The latest numbers from the U.S. Environmental Protection Agency (EPA) for global costs range from US$12 to US$62 per metric tonne of CO2 emitted by 2020. However, the new data shows the SCC to be as high as US$180–800 per tonne of carbon emissions.
The country-level SCC for the USA alone is estimated to be US$50 per tonne, which is much higher than the global value used in most regulatory impact analyses. This means that the nearly five billion metric tons of CO2 the USA emits each year is costing the US economy about US$250 billion.
“Evaluating the economic cost associated with climate is valuable on a number of fronts, as these estimates are used to inform U.S. environmental regulation and rulemakings,” said lead author, University of California San Diego assistant professor Kate Ricke, who holds joint appointments with UC San Diego’s School of Global Policy and Strategy and Scripps Institution of Oceanography.
CO2 is a global pollutant and previous analyses have always focused on the global SCC, but this paper offers a country-by-country breakdown of the economic damage climate change will cause.
“Our analysis demonstrates that the argument that the primary beneficiaries of reductions in carbon dioxide emissions would be other countries is a total myth,” Ricke said. “We consistently find, through hundreds of uncertainty scenarios, that the U.S. always has one of the highest country-level SCCs. It makes a lot of sense because the larger your economy is, the more you have to lose. Still, it’s surprising just how consistently the US is one of the biggest losers, even when compared to other large economies.”
Ricke, K., Drouet, L., Caldeira, K. and Tavoni, M. (2018). Country-level social cost of carbon. Nature Climate Change. Available here https://www.nature.com/articles/s41558-018-0282-y. [paywall]