President Trump’s recent Executive Order (EO), titled “Unleashing American Energy,” signals a significant shift in U.S. energy policy. While the EO aims to boost domestic energy production and reduce regulatory burdens, it notably targets the concept of the social cost of carbon (SCC), calling it “logically deficient,” “poorly based in empirical science,” “politicized,” and “absent of a foundation in legislation”. This move has profound implications for our understanding of climate change and how we address it.
What is the Social Cost of Carbon?
The SCC is an economic estimate, measured in dollars, of the long-term damage caused by emitting one additional ton of carbon dioxide (CO2) into the atmosphere. It encompasses a wide range of impacts, such as:
- Rising sea levels
- More frequent and severe weather events
- Reduced agricultural productivity
- Negative health impacts
By assigning a monetary value to these harms, the SCC allows policymakers to weigh the costs of carbon emissions against the benefits of policies that reduce them. For example, if reducing emissions costs less than the SCC, then the action is economically justified. The SCC is also used to evaluate the benefits of reducing other greenhouse gasses, such as methane and nitrous oxide. Estimates of the SCC increase over time because future emissions are expected to produce larger damages as physical and economic systems become more stressed.
Why is the Social Cost of Carbon Important?
The SCC is essential for making informed decisions about energy production, infrastructure, and climate adaptation. It helps to justify investments in renewable energy and other measures that reduce greenhouse gas emissions. It provides a way to evaluate the trade-offs between short-term economic gains and long-term climate costs. Without this valuation, the true cost of carbon emissions remains hidden. Continue reading “Ignoring the True Cost of Carbon Emissions”