[geo] the political context on clarifying social cost of carbon

[Andrew Revkin]

Seeing the helpful discussion emerge on the new National Academies report
on ways to improve the "social cost of carbon" estimates, thought you'd
appreciate my piece on the political context, which is essential to
consider given that key aspects of the final determination of such metrics
is implicitly a function of values/politics/ethics more than data. Some
excellent input from Myles Allen and Gernot Wagner...

Here's the link and an excerpt (several links to relevant papers are at the
bottom as well):


https://www.propublica.org/article/will-trumps-climate-team-accept-any-social-cost-of-carbon

President-elect Donald Trump and members of his proposed cabinet and
transition team have taken aim at many of President Obama’s climate and
clean-energy policies, programs and legacies — from the Paris Agreement to
the Clean Power Plan.

But there’s probably no more consequential and contentious a target for the
incoming administration than an arcane metric called the “social cost of
carbon.”

This value is the government’s best estimate of how much society gains over
the long haul by cutting each ton of the heat-trapping carbon-dioxide
emissions scientists have linked to global warming.

Currently set at $36 per ton of carbon dioxide
, the metric is
produced using a complex, and contentious, set of models estimating a host
of future costs to society related to rising temperatures and seas, then
using a longstanding economic tool, a discount rate, to gauge how much it
is worth today to limit those harms generations hence. (For context, the
United States emitted about 5.1 billion tons of CO2 in 2015
, out of a
global total of 36 billion.)

The contention arises because the social cost of carbon underpins
justifications for policies dealing with everything from power plants to
car mileage to refrigerator efficiency. The carbon valuation has already
helped shape 79 regulations .

The strongest sign of a coming challenge to the social cost calculation
came in a post-election memorandum

from
Thomas Pyle, who was then president of the industry-funded American Energy
Alliance and Institute for Energy Research and who now leads the Trump
transition team for the Department of Energy. In the memo, he predicted
policies resulting in “ending the use of the social cost of carbon in
federal rule makings.”

Outright elimination of such a calculation is highly unlikely, according to
interviews with a range of experts. The practice of estimating the economic
costs and benefits of most government regulations began under an executive
order of President Ronald Reagan

in
1981. It has continued ever since. Climate-related regulations are no
different. Several court rulings have affirmed the process
.

But the Trump administration’s aim of lowering the operative “number,”
possibly by a lot, is almost assured. In 2013, an economist from Pyle’s
energy institute testified

in
a Senate hearing that under a proper calculation, the social cost of carbon
“would probably be close to zero, or possibly even negative.”

A deep cut would be both dangerous and unjustified, given the basics of
both climate science and economics, said Gernot Wagner, a Harvard economist
focused on climate risk and policy. In a phone interview on Tuesday, he
said the interagency working group assembled by the White House in 2009 to
create the social cost measurement was “a damn impressive exercise at
assembling a lot of firepower and done in a way that was about as
apolitical as things can go in Washington.”

The result, he said, is, if anything, far too conservative. “What worries
me most, frankly, is that the current social cost is basically being
portrayed as the upper limit,” he said.

In fact, he and several other climate-focused economists said in interviews
that the science, including persistent uncertainty on how fast temperatures
and seas will rise, should result in a higher carbon cost and even more
aggressive steps at limiting warming.

At the same time, he and other analysts agreed that there are issues with
the way calculations have been done so far, reflected in a flood of comments

received
by the Office of Management and Budget in 2015.

A fresh independent assessment of ways to improve the 

[geo] Re: Social Cost of Carbon - new NAS report (on methodology - not values of)

[robot]

Actually, they did project a range of values on the screen, strongly 
dependent on discount rate.
They did "thousands of runs" to develop three asymmetric bell curves of SCC 
values per tonne, one for each discount rate, colored RGB.
Each of those curves had a peak way to the left, and a long tail to the 
right, rather like like Wien's Law.
for 5% (green), the reported average was $12.
for 3% (blue), the reported average was $42. 
for 2.5% (red), the reported average was $62.
Notable on the far right of the red bell curve was a 95%-ile "high-impact" 
value of $123 per tonne.

The values seem to me a tad high for tonnes of CO2, rather closer to what I 
would expect for tonnes of *carbon*.

They did ask one of the questions I emailed in, so I was happy about that.
The moderator didn't pose the other one, which was, why not consider a 1% 
discount rate? (Since the world is at historically low rate regime, almost 
deflationary.)  3% and 2.5% are too close to each other to get a feel for 
first-order SCC as f(i).  However, was interesting to see second-order 
sensitivity: a half-point decrease in discount rate (i.e. - 50 basis 
points) yielded a $20 increase (5000 basis points!!) in SCC!  You'd expect 
the sign change, but the magnitude surprised me.  That's why I was so 
interested in what the effect of 1% discount rate would be. 
In my opinion, a 1% discount rate would not only preserves those 
very-long-term future benefits, which conventional economic analysis 
methods are incapable of recognizing, but the choice is entirely defensible 
on straight-up financial grounds.  For example, there are large pools of 
ultra-low-interest (1 or 2%) money available in so-called "revolving funds" 
to pay for public-benefit clean-water/clean-energy infrastructure projects.

If you're into this stuff, there's a good theoretical treatment of discount 
rates published by the British Crown's Treasury, that is based on the 
"social time preference rate" method.
You will see that "L" (long-term catastrophic risk) and "delta" (pure time 
preference) terms sum to 1 or 2%.
The product of the third term, "mu" (elasticity of marginal utility of 
consumption) and fourth term "g" (long-term real growth per capita) also 
works out to 1.5-3%, in the developed world.
The resulting discount rate appropriate for the developed world varies from 
a low of 2.5% to a high of almost 5%, just like the NAS presenters showed.

Here's a link: https://www.gov.uk/government/uploads/system/...data/.../
*green*_*book*_complete.pdf 

Robert
--
Robert G. Kennedy III, PE
www.ultimax.com
1994 AAAS/ASME Congressional Fellow
U.S. House Subcommittee on Space

On Wednesday, January 11, 2017 at 4:18:26 PM UTC-5, Ron wrote:
>
> List:
>
> 1.  I listened to a webinar today by the panel that put a (free , huge 
> @394 pages) new report together.  Here is part of the first page, showing 
> how to download the full report:
>
>   http://www.nap.edu/24651 
>
>    394 pages | 6 x 9 | PAPERBACK ISBN 978-0-309-45420-9 | DOI: 
> 10.17226/24651
>
> *'Valuing Climate Changes: Updating Estimation of the Social Cost of 
> Carbon Dioxide”*
>
>
> 2.The slides used today are at:  
> http://sites.nationalacademies.org/cs/groups/dbassesite/documents/webpage/dbasse_176580.pdf
>
>
> 3. Part of the history and a little of the methodology is captured in this 
> part of slide 13 (out of 26):
>
>
>
> 4.  This figure is available on page 5 of this much shorter August US 
> Interagency document
>  
> https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc_tsd_final_clean_8_26_16.pdf
>
>
> 5.   Nothing here at any of these three sites on geoengineering or 
> CDR, and only the few numerical values given, but still likely important 
> new data in justifying future Geo costs.
>
>
> Ron
>

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Re: [geo] Contextualizing Climate Engineering and Mitigation: Illusion, Complement or Substitute?

[Michael Hayes]

Hi Folks,

Gallant effort yet lags behind the leading thoughts by about 5-6 years. 
First, CE can easily be both mitigation and adaptation. Second, the 
question: 

   - *From the perspective of applied ethics and decision analysis, under 
   which conditions can mitigation and CE options be combined in an economic 
   analysis of the portfolio of response measures?*

Vast scale marine biomass/biofuel/biochar production makes moot the above. 

Best regards, 

On Tuesday, January 10, 2017 at 8:04:08 AM UTC-8, Stephen Salter wrote:
>
> Hi All
>
> They say that they are doing only one kind of SRM.  Which one?
>
> Stephen
>
>
> Emeritus Professor of Engineering Design. School of Engineering, 
> University of Edinburgh, Mayfield Road, Edinburgh EH9 3DW, Scotland 
> s.sa...@ed.ac.uk , Tel +44 (0)131 650 5704, Cell 07795 203 
> 195, WWW.homepages.ed.ac.uk/shs, YouTube Jamie Taylor Power for Change
> On 10/01/2017 12:40, Andrew Lockley wrote:
>
>
> http://www.spp-climate-engineering.de/cemics-kopie-321.html 
>
>
> CEMICS 
> Contextualizing Climate Engineering and Mitigation: Illusion, Complement 
> or Substitute? 
>
>- Prof. Dr. Hermann Held  // 
> Universität 
>Hamburg (UHH) // PI // Project Lead
>herman...@uni-hamburg.de  
>- Prof. Dr. Ottmar Edenhofer  // 
>Potsdam Institute for Climate Impact Research (PIK) // PI
>eden...@pik-potsdam.de  
>- Prof. Dr. Jens Hartmann 
> // UHH // PI
>jens.h...@zmaw.de  
>- Prof. Dr. Mark G. Lawrence  
>// Institute 
>for Advanced Sustainability Studies (IASS) Potsdam // PI
>mark.l...@iass-potsdam.de  
>- Dr. Thorben Amann  // 
>UHH 
>- Dr. Nico Bauer 
> // PIK 
>- Dr. Peter Irvine  // 
>IASS 
>- Dr. Elmar Kriegler 
> // 
>PIK 
>- Dr. Gunnar Luderer 
>
> 
>  // 
>PIK 
>- Achim Maas  // IASS 
>- Dr. Alexander Popp 
> // PIK 
>- Dr. Jessica Strefler  // 
>PIK 
>- Elnaz Roshan // UHH 
>- Ulrich Kreidenweis 
>
>  
> // 
>PIK 
>- Holly Jean Buck  
> // IASS 
>- Prof. Dr. Harald Stelzer 
> // Universität Graz 
>
> The University of Hamburg – KlimaCampus, the Institute for Advanced 
> Sustainability Studies (IASS), and the Potsdam Institute for Climate Impact 
> Research (PIK) are conducting the project CEMICS (Contextualizing Climate 
> Engineering and Mitigation: Illusion, Complement or Substitute?). CEMICS 
> aims at pioneering an integrative view of Climate Engineering (CE) and 
> mitigation options. It is the initial hypothesis of the project that 
> society will decide about CE deployment not only based on the 
> characteristics of a certain technology, but in the context of available 
> alternatives. Therefore, three carbon dioxide removal (CDR) options and one 
> solar radiation management (SRM) option will be analyzed in the context of 
> the established discourse on options for reducing emissions. It is the aim 
> of the project to compare the different options based on a techno-economic 
> assessment and impact analysis, a normative assessment of possible 
> consequences and risks of those options, and the use of integrated 
> assessment models.
> The three carbon dioxide removal technologies CEMICS will focus on are 
> afforestation, direct air capture, and enhanced weathering.
> In addition, a key solar radiation management option (stratospheric 
> aerosol injection), which is presumably much less expensive than carbon 
> dioxide removal technologies, will be included in the above scheme, 
> emphasizing a risk-valuation approach.
>  
> *M A I N  R E S E A R C H  Q U E S T I O N S*   
>   
>
>- *How would different CE technologies compare to climate change 
>mitigation strategies that aim at reducing greenhouse gas emissions at 
>their source?* 
>
>   
>   
>
>- *From the perspective of applied ethics and decision analysis, under 
>which conditions can mitigation and CE options be combined in an economic 
>analysis of the portfolio of response measures?* 
>
>   
>   
>
>- *What would the result of such a portfolio analysis be?* 
>
>   
>   
>
>