We’re Already Paying For Climate Change

Dealing with climate change will cost us a great deal.  This is the source of much of the argument over climate policy.  However, the cost of doing nothing is probably immeasurably higher as described by Mark Schapiro.

The Environmental Protection Agency has an estimated price for the effects of greenhouse gases: It’s called the “social cost of carbon,” and is put at $38 per ton of emissions. This figure, devised to enable the EPA to economically justify its regulation of greenhouse gases, is based on a more limited list of factors than other nations. Britain and France calculate higher costs and include such factors as climate-forced migration and public health consequences for animals and people.

However inadequate, the EPA’s social cost of carbon is revealing. Do the math: The United States emitted 6.5 billion tons of greenhouse gases last year; at $38 a ton, the amount of money gets large very quickly.

All of these are known as externalized costs — costs borne by anyone other than those who created them. That means us, the public. In the prices and taxes we pay, we have been shouldering costs that fossil fuel companies are not even compelled to recognize on their balance sheets.

Carbon taxes, and other policy options, shift the costs from all of us to those who produce and use fossil fuels.

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.