Long-Term Costs of Cutting Emissions Grow Hazy

Economic costs of hitting near-term targets appear modest, but modeling grows less reliable further out

By Amy Harder and Greg Ip of the WSJ. Excerpt:

"Getting to Mr. Obama’s 80% reduction goal by 2050 is much harder. Economists are divided on whether estimates that far out are meaningful because so many factors, such as advances in technology, are unknowable. “We normally stop at 2030 or 2035 because it really gets so speculative,” said Resources for the Future economist Ray Kopp.

But William Nordhaus of Yale University says policy makers need a guide to what to do today to achieve reductions a century from now because that’s when the worst consequences of climate change show up.

A simulation using six different models suggests the world could meet those emissions targets if every country applied a carbon tax of $60 per ton by 2050 and $425 (in today’s dollars) by 2100. The result would be to reduce economic output by 5% to 10%. For gasoline alone, a $425 per ton carbon tax would translate into a $3.75 per gallon tax.

According to a report by the Energy Modeling Forum, a consortium at Stanford University, of 17 different models, just nine produced results consistent with capping greenhouse-gas emissions at a level roughly consistent with the two-degree limit, allowing for them to temporarily exceed the long-term target.

Most models indicate that to achieve such deep reductions, technology known as “negative emissions” that can suck greenhouse-gas emissions from the atmosphere would have to be widely adopted around the world. But it’s hardly feasible today.

“To believe you can stabilize emissions at concentrations that would be protective of a two-degree target, means you can believe you can suck carbon dioxide out of the atmosphere at a cost the general population of the world will accept,” said Mr. Kopp, of Resources for the Future. “These are science-fiction sort of problems.”

Some clean-energy and climate experts say most economic modeling fails to predict technological revolutions that could make achieving deep carbon reductions possible.

“The models are biased on the pessimistic side,” said Joe Romm, senior fellow at the left-leaning think tank Center for American Progress, citing the dramatic drop in the price of silicon photovoltaic cells since 1977. “They’re simply not designed to deal with the fact that sometimes change happens quickly.”"