Study: Social Cost of Carbon Likely Much Lower Than Previous Estimates

With the Clean Power Plan and other regulations based on the social cost of carbon, a new report details why the cost of carbon estimates should be revised downward

From The Reason Foundation.

"A new study from Reason Foundation shows that estimates of the “social cost of carbon” have been falling — and would fall further if new scientific evidence were incorporated. The study calls into question the analyses used to underpin the Obama administration’s new Clean Power Plan and other federal regulations targeting emissions of greenhouse gases.

The study by Julian Morris, vice president of research at Reason Foundation, finds the administration’s estimates of the social cost of carbon are “biased upwards” due to their reliance on three “simplistic models, all of which use estimates of climate sensitivity that are likely too high and two of which likely overestimate the economic impact of climate change.”

The study shows that by combining more reliable estimates of the sensitivity of the climate to changes in concentrations of greenhouse gases with more realistic assumptions about both the benefits and costs of carbon dioxide emissions, the social cost of carbon falls dramatically.

“The current best estimate for the social cost of carbon is zero,” said Morris, who has been researching the economics of climate change for over 20 years. “Using that number, most federal regulations limiting carbon emissions, including the Clean Power Plan, could no longer be justified.”

Morris notes that, “The government’s estimates are based on pessimistic assumptions that don’t accurately reflect humanity’s ability to innovate and adapt, and they ignore recent evidence showing that the climate is less sensitive to rising concentrations of carbon dioxide than was previously assumed.”

Full Study Online

The full study, Assessing the Social Costs and Benefits of Regulating Carbon Emissions, is available here and here (.pdf). - See more at: http://reason.org/news/show/social-cost-of-carbon-study#sthash.ITLVWC2q.dpuf"