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…]