What’s the most significant number you’ve never heard of?
After experiencing 116-degree heat at the end of June in the Pacific Northwest, we are likely to become more familiar with this: calculating the social cost of greenhouse gases. It turns out there really is a way to quantify the cost of continued emissions. But — and this is a big but — the way the U.S. government currently does its math woefully undercounts the cost.
And frankly, we just don’t have time for this. Here in our beloved temperate climate of Oregon — well-known for its lush green landscape and seemingly endless rainy days — we just set three new heat records in three days: First, 108 degrees Fahrenheit. Then, 112. And finally, 116 degrees.
In all, over 115 Oregonians died as a direct result of the heat — a preventable tragedy, coupled with an equity issue that we should not accept as our new normal.
Now, as the Biden administration sets about taking action to stem the climate crisis, rising global temperatures, in particular, it must figure the “social cost of greenhouse gases” (also referred to as the “social cost of carbon”) more accurately. The phrase refers to the damage caused — in dollars — by the emission of a metric ton of greenhouse gas. It’s used in cost-benefit analyses federal agencies are required to employ when making rules for initiatives like the Clean Power Plan. And in a capitalist society, rising costs — in tangible dollars — matter.
If the Biden administration fails to update this key metric, it could doom our efforts to tackle the climate crisis. That’s how crucially important this one number is.
Let me offer an example or two:
For carbon dioxide, the most widespread greenhouse gas, the current estimated social cost is $51 per ton emitted into the atmosphere. That number is both inaccurate and dangerously low. As eminent economists Joseph Stiglitz and Nicholas Stern have concluded, assigning this “cost” to carbon would lead to the conclusion that we should allow temperatures to rise between 3.5 and 4 degrees Celsius — a perilous level scientists warn will result in irreversible impacts to our planet, with over a billion people displaced, lethal levels of heat, and mass extinctions resulting. The Paris Agreement, by contrast, calls for limiting the increase to 1.5 to 2 degrees — half as much.
Though the Trump administration tried to water down the calculation of the social cost of greenhouse gases, the Biden administration plans to revive this metric.
I recently joined a coalition of state attorneys general in submitting comments to the federal government. We pointed out that the calculation does not currently include the health effects of wildfires like the ones Oregon is experiencing. It doesn’t include damages to historically and culturally significant assets at risk from climate change, such as the Statue of Liberty. Nor does it account for the historic and cultural value of preserving entire cities — like Boston, Miami and New York — whose continued existence is threatened by rising seas.
In our comments, we insist the Office of Management and Budget (OMB) and other government agencies decide on a metric to measure effects like these — or, at the very least, prominently disclose their absence whenever they use a calculation for the social cost of greenhouse gases. With climate change, the ordinarily noble aim to get it “exactly right on the first go” is futile — we need deliberate action now, and we should understand that it is sensible to make adjustments as we learn more going forward.
We also addressed the concept of the “discount rate,” which economists use to convert the value of future costs and benefits into today’s dollars for comparison. The discount rate being used now is 3 percent. Here’s how this works: The federal government currently values a human life, for cost-benefit purposes, at $10 million. Employing the current discount rate for a century would reduce the value of a human life to around $520,000 in today’s dollars.
Another way to look at this is even more concerning: If the world population in 2521 were the same as today (7.8 billion), the complete destruction of the human race in that year would “cost” only $29.7 billion in today’s dollars. This means it would be considered economically irrational to spend $30 billion today to avoid the complete extinction of homo sapiens in 2521. No one in their right mind would agree with that. Thus, we urge the Biden administration to consider discount rates much lower than 3 percent, including zero.
There is another significant problem with the current calculus: It does not consider impacts beyond 2300, even though climate damages extend well beyond that point, and we certainly hope the human race continues on for more than 300 years! Although 2300 may seem far into the future, it truly is a mere speck in the continuum of human existence.
For these reasons — and many more — OMB needs to develop a truly comprehensive measure of the damage caused by greenhouse gases. Most significantly: If this is done, it will show that the investments necessary to fulfill the goals of the Paris Agreement are economically justified many times over, and our world will be safer and healthier because we took action.
That’s why our coalition of attorneys general thinks it absolutely crucial that the social cost of greenhouse gases be calculated accurately by our federal government.
Ellen Rosenblum is the attorney general for Oregon.