Social Cost of Carbon: Interagency Group Predictably Predicts Climate Change Worse Than Predicted

by Marlo Lewis on June 5, 2013

in Blog, Features

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Hold the presses! A U.S. Government interagency working group has just released its updated Technical Support Document (TSD) on the social cost of carbon (SCC).

This is joyous news in some circles. “The ‘Social Cost of Carbon’ Is Almost Double What the Government Previously Thought,” Climate Progress enthuses. Why are they pleased? Because the higher the SCC, the stronger the (apparent) case for suppressing the production and export of hydrocarbon energy in general, and for blocking the Keystone XL pipeline in particular.

SCC is an estimate of how much damage an incremental ton of carbon dioxide (CO2) emissions does to humanity and the biosphere. SCC estimates are driven by assumptions about such issues as climate sensitivity (how much warming results from a given increase in CO2 concentrations), climate impacts (how warming will affect weather patterns and sea-level rise), economic impacts (how changes in global temperature, weather, and sea-level rise will affect agriculture and other climate-sensitive activities), and technological change (how adaptive capabilities will develop as climate changes).

Modelers feed the assumptions into computer programs called “integrated assessment models” (IAMs). By tweaking those values, the modeler can get pretty much any result he desires. Outcomes also vary based on the discount rate selected, i.e., how much people are assumed to value income in the future compared to income in the present.

Using three IAMs, three discount rates (2.5,% 3,% and 5%), and a fourth value representing low-probability catastrophic impacts, the interagency group calculates four SCC estimates for the year 2020. In the working group’s 2010 TSD, the SCC estimates were $7, $26, $42, and $81 (2007$). In the updated TSD, the corresponding estimates are $12, $38, $58, and $129 (2007$). Excuse me, but even for the high-impact projections, the updated estimate ($129) is 59% higher than the 2010 estimate ($81), which is more than a tad shy of “almost double.”

Let’s cut to the chase. Those who say the SCC is bigger than the government previously thought merely recycle the old saw that climate change is ”worse than scientists previously thought.” They are mistaken. The climate change outlook is better than we have long been told.

One reason the updated estimates are higher is that the IAMs contain an “explicit representation” of sea-level rise “dynamics.” Are the modelers keeping up with the scientific literature? Consider two recent studies

  • King et al. (2012): The rate of Antarctic ice loss is not accelerating and translates to less than one inch of sea-level rise per century.
  • Faezeh et al. (2013): Greenland’s four main outlet glaciers are projected to contribute 19 to 30 millimeters (0.7 to 1.1 inches) to sea level rise by 2200 under a mid-range warming scenario (2.8°C by 2100) and 29 to 49 millimeters (1.1 to 1.9 inches) under a high-end warming scenario (4.5°C by 2100).

If 21st century sea-level rise is more likely to be measured in inches rather than feet or meters, shouldn’t SCC estimates decline?

And what about the 15-year period of no-net warming, which the climate science establishment did not predict and still struggles to explain? The warming pause is hard to square with the mantra of “worse than we thought.” It is evidence that the SCC is lower than they thought.

Let’s look at the disconnect between what they predicted and what happened.  The graph below comes from NASA scientist Roy Spencer


Figure explanation: The thin colored lines are projections of global temperature from 44 models used in the IPCC’s forthcoming Fifth Assessment Report. The black line is the IPCC’s best estimate. The thick blue and red lines are satellite measurements of lower troposphere temperature in the tropics.

Have the IAMs been corrected in light of real-world observations? No. The climate sensitivity assumptions come straight out of the IPCC’s 2007 Fourth Assessment Report (TSD, p. 12).

More recent studies, summarized by Cato Institute climatologist Chip Knappenberger, indicate that the IPCC’s best estimate of climate sensitivity is too hot.

Knappenberger Lukewarmer Studies 2011-2012

Figure explanation: Climate sensitivity estimates from new research published since 2010 (colored), compared with the range given in the IPCC Fourth Assessment Report (black). The arrows indicate the 5 to 95% confidence bounds for each estimate along with the mean (vertical line) where available. Ring et al. (2012) present four estimates of the climate sensitivity and the red box encompasses those estimates. The right-hand side of the IPCC range is dotted to indicate that the IPCC does not actually state the value for the upper 95% confidence bound of their estimate. The thick black line represents the IPCC’s “likely” range.

Otto et al. (2013), a study published last month in Nature, also indicates that climate sensitivity is lower than the IPCC’s best estimate. Lower sensitivity means less warming and less damaging impacts, which should translate into lower SCC estimates.

No matter. We can predict with high confidence that agencies with a stake in regulating CO2 will continually predict that climate change is worse than predicted. Hence it’s also predictable that each iteration of the TSD will feature higher SCC estimates than the previous edition.

Even if these SCC reports were not assumption-driven hocus-pocus they would still be one-sided and misleading, because they ignore the social costs of carbon mitigation. The connection between livelihoods, living standards, and life expectancy is more than etymological. People use a portion of their income to enhance their health and safety. Unsurprisingly, numerous studies find that poverty and unemployment increase the risk of sickness and death. From which it follows that anti-growth policies like cap-and-trade and carbon taxes can easily do more harm than good to public health.

Fossil fuels remain the chief energy source of what Cato Institute scholar Indur Goklany calls a “cycle of progress” in which economic growth, technological change, human capital formation, and freer trade co-evolve and mutually reinforce each other. Given the continuing importance of fossil fuels to human flourishing and the mortality risks of poverty and unemployment, the social cost of carbon mitigation can easily exceed that of climate change.

As in global warming advocacy generally, the risks of climate change policy are nowhere acknowledged in the TSD. Even if the TSD got the science right, it would still be partisan and biased unless paired with a rigorous and thorough analysis of climate policy risk. Prediction: A credible analysis of climate policy risk is something the interagency working group will never produce.




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