Marlo Lewis

Climate campaigners increasingly invoke the concept of the “social cost of carbon” to justify carbon taxes, mandatory production quota for renewable electricity, and other policies to suppress fossil-fuel consumption.

They argue that CO2 emissions impose a harm or cost on society not reflected in market prices for coal, gas, and oil, energy derived from those fuels, or products and services supported by fossil energy. The social cost of carbon (SCC) is an estimate of how much damage each incremental ton of CO2 emissions does to society.

As noted previously on this blog, the Obama administration’s May 2013 SCC estimates are roughly 60% higher than its 2010 SCC estimates — apparently in deference to the “worse than we thought” political mantra. If anything, those estimates should have declined, because the climate outlook is better than they told us. They did not anticipate a 16-year warming pause, a growing mismatch between models and observations, or a pile of papers indicating a lower climate sensitivity than the IPCC had assumed. Perhaps most important, even consensus climatology now eschews the doomsday scenarios that once made global warming look like mankind’s biggest problem.

In any case, carbon’s alleged social cost is highly subjective, inferred from speculative assessments of climate sensitivity, how global warming will affect weather patterns, how climate changes will affect economic activity, and how adaptive capabilities will develop as climate changes. Moreover, agency analysts injected a strong upward bias into their SCC estimates by flouting OMB-approved regulatory accounting practices.

Craig Idso of the Center for the Study of Carbon Dioxide and Global Change provides a compelling new reason to take all SCC estimates with several handfuls of salt: Such estimates typically omit, or severely underrate, the benefits of CO2 fertilization on crop production, global food security, and public health.

In a new study, The Positive Externalities of Carbon Dioxide, Idso estimates that rising CO2 concentrations boosted global crop production by $3.2 trillion during 1961-2011, and will increase output by another $9.8 trillion between now and 2050. Those huge benefits are absent from most — maybe all — SCC estimates. Moreover, since CO2 fertilization benefits are confirmed by literally thousands of laboratory and field experiments, they should carry more weight than negative externalities derived from multiple speculative assumptions.

From the study’s abstract:

Several analyses have been conducted to estimate potential monetary damages of the rising atmospheric CO2 concentration. Few, however, have attempted to investigate its monetary benefits. Chief among such positive externalities is the economic value added to global crop production by several growth-enhancing properties of atmospheric CO2 enrichment. As literally thousands of laboratory and field studies have demonstrated, elevated levels of atmospheric CO2 have been conclusively shown to stimulate plant productivity and growth, as well as to foster certain water-conserving and stress-alleviating benefits. For a 300-ppm increase in the air’s CO2 content, for example, herbaceous plant biomass is typically enhanced by 25 to 55%, representing an important positive externality that is absent from today’s state-of-the-art social cost of carbon (SCC) calculations.

The present study addresses this deficiency by providing a quantitative estimate of the direct monetary benefits conferred by atmospheric CO2 enrichment on both historic and future global crop production. The results indicate that the annual total monetary value of this benefit grew from $18.5 billion in 1961 to over $140 billion by 2011, amounting to a total sum of $3.2 trillion over the 50-year period 1961-2011. Projecting the monetary value of this positive externality forward in time reveals it will likely bestow an additional $9.8 trillion on crop production between now and 2050. [click to continue…]

The Supreme Court yesterday announced it will review the D.C. Circuit Court of Appeals June 2012 decision in Coalition for Responsible Regulation v. EPA, which upheld the agency’s four main greenhouse gas rulemakings.

In the new case, Utility Air Regulatory Group v. EPA, the Court will limit its review to one question: “Whether EPA permissibly determined that greenhouse gas emissions from new motor vehicles triggered permitting requirements under the Clean Air Act for stationary sources that emit greenhouse gases.” In other words, the Court will review the agency’s April 2010 Timing Rule.

How significant is this turn of events?

The Court’s grant of certiorari could simply mean that some of Justices want to put an end to litigation attempting to roll back or limit the regulatory consequences of Massachusetts v. EPA. It could also mean that some Justices have serious concerns about the legality of the EPA’s regulation of greenhouse gas emissions from stationary sources. A mix of motivations may be in play.

Many skeptics and limited government advocates are disappointed that the Court will review neither the agency’s December 2009 Endangerment Rule, the fountainhead of all EPA greenhouse gas regulations, nor the Endangerment Rule’s immediate regulatory consequence, the May 2010 Tailpipe Rule, which established first-ever greenhouse gas emission standards for motor vehicles.

However, the case may provide many teaching moments for constitutionalists, free marketers, and other friends of limited government. The Court in Mass. v. EPA essentially decided that the 1970 Clean Air Act is the statutory scheme Congress intended to regulate greenhouse gases. That opinion is preposterous. If the EPA’s greenhouse gas regulations were introduced as legislation today, they would be dead on arrival. That’s after roughly 20 years of global warming advocacy. So how plausible is it that Congress authorized the EPA to regulate greenhouse gases in 1970, years before climate change emerged as a public policy issue, in a statute that does not even contain the terms “greenhouse gas” or “greenhouse effect”?

The simple point I want to make here is that Utility Air Regulatory Group v. EPA could be a big political and policy setback for the EPA. And even if the Court upholds the Timing Rule, the case could still help build public and policymaker support for legislative action to rein in the agency and contain the regulatory fallout from Mass. v. EPA. [click to continue…]

An odd-bedfellow coalition of agriculture, engine manufacturer, food retail, environment, hunger, taxpayer, and free-market public interest groups are asking the House Energy & Commerce Committee to ensure that any legislation proposed to reform the Renewable Fuel Standard (RFS) address the “havoc that the corn ethanol mandate” has imposed on a “multitude of stakeholder interests.”

In their joint letter to the E&C Committee, the 44 signatories state in part:

While our reasons vary, all of us have long maintained that the RFS is a uniquely flawed policy. The mandate on corn-based ethanol in particular has had a devastating effect on the entire food economy from livestock and poultry producers facing record feed costs, to food retailers facing record food costs, to consumers here and abroad struggling to balance food budgets in tough economic times. Some signers of this letter also question the propriety of Congress establishing production quota and guaranteed market shares for any type of commercial business. Ethanol from corn also is concerning to many due to its global warming impact and the use of natural resources such as water and native grassland for producing fuel. The corn-based ethanol mandate is also having a devastating impact in communities throughout the world, where people living in poverty are facing increased food prices that threaten their food and land security.

The coalition advises that “any RFS proposal advanced by the Committee should include significant, meaningful and permanent decreases in the conventional biofuels (corn ethanol) mandate.”

Click here to read the joint letter in full.

Update (added 5:30 pm)

A Reuters article by Cezary Podkul underscores the timeliness of the odd bedfellows coalition letter. Podkul reports that House E&C “is weighing a proposal to cap the ethanol requirement at below 10 percent for two or three years, according to a person close to the committee. The proposal, which is not yet finalized, would give the industry time to study the use of higher ethanol blends . . . and then raise the target above 10 percent, according to this source.”

Although this sort of stop-gap measure would postpone the impending blend wall crisis, it falls short of the “significant, meaningful and permanent decreases” in the corn-ethanol mandate that the odd bedfellows coalition is advocating. [click to continue…]

I’m going to have to revise my skepticism about climate models. In at least one respect, their projections are spot on accurate. Satellite observations apparently validate model predictions that carbon dioxide (CO2) emissions will green the Earth.

That’s what four Australian scientists report in “Impact of CO2 fertilization on maximum foliage cover across the globe’s warm, arid environments,” a study published in Geophysical Research Letters.

Models project that the 14% increase in atmospheric CO2 concentration from 1982 to 2010 would increase green foliage in warm, arid environments by 5-10%, and lo, satellites reveal an 11% increase that cannot be accounted for by other known factors.

As the researchers explain in the study’s abstract:

Satellite observations reveal a greening of the globe over recent decades. The role in this greening of the “CO2 fertilization” effect—the enhancement of photosynthesis due to rising CO2 levels—is yet to be established. The direct CO2 effect on vegetation should be most clearly expressed in warm, arid environments where water is the dominant limit to vegetation growth. Using gas exchange theory, we predict that the 14% increase in atmospheric CO2 (1982–2010) led to a 5 to 10% increase in green foliage cover in warm, arid environments. Satellite observations, analyzed to remove the effect of variations in precipitation, show that cover across these environments has increased by 11%. Our results confirm that the anticipated CO2 fertilization effect is occurring alongside ongoing anthropogenic perturbations to the carbon cycle and that the fertilization effect is now a significant land surface process. [click to continue…]