Mainstream science and economics do not support much of the current climate policy agenda and certainly not the radical extremes demanded by activist groups

There’s an assumption out there that if you “accept” the science of climate change, you are obliged to support drastic measures to cut greenhouse gas (GHG) emissions. This is not true. The one does not follow from the other. Mainstream science and economics do not support much of the current climate policy agenda and certainly not the radical extremes demanded by activist groups.

In a recent peer-reviewed paper, my co-authors and I proved this using one of the economic models governments and academics around the world rely on. Policy-makers compute the social costs of GHG emissions using tools called “integrated assessment models” (IAMs), which contain linked climate and economic models. They run the world forward in time for a few hundred years and estimate the value of damages from a tonne of GHGs emitted today. Pardon all the acronyms but that’s called the “social cost of carbon,” or SCC, and it represents an upper bound on what we should pay per tonne to cut emissions.

The higher the SCC, the more aggressive climate policy should be. During the Obama years the U.S. Environmental Protection Agency (EPA) convened an expert group to use the three best-known IAMs to estimate the SCC from now to the middle of this century to guide regulatory rule-making. Most of their results were in the US$20 to US$60 per tonne range, depending on the discount rate (which controls how much weight to put on far-future damages). The benefit of climate policy is to get rid of this future damage. If the damage is US$60 per tonne, then policies costing more than $60 per tonne of reduction don’t make sense. You wouldn’t spend more than a dollar to save a dollar.

Like all models, IAMs depend on key parameters that are drawn from the scientific literature. It has long been known that although CO2 is a greenhouse gas, it’s also food for plants. So extra CO2 in the air benefits plant growth. Yet two of the EPA’s three IAMs assumed that boosting the carbon dioxide content of the air has no effect on agriculture, which is overly pessimistic. Only one of the models allows for a small gain in agricultural productivity as CO2 levels rise, based on estimates from the 1990s of the size of the effect. So that’s the one we used.

However, we first updated the IAM to take account of the extensive research since the 1990s looking at effects on global plant growth from rising CO2 levels. Results from satellite-based surveys and field experiments have shown larger benefits than people predicted in the 1990s, even in a warming climate, especially for the rice crop in Asia.

Also, all the IAMs assume the climate will warm by three degrees Celsius with every CO2 doubling. This is based on simulations with large climate models, but there have been many recent studies in climate journals estimating lower sensitivity based on observed ground- and satellite-measured temperature changes. So we incorporated this information into the IAM as well.

Based on these updates alone, we showed that, even using a low discount rate, the social cost of carbon as of 2020 drops from US$32 per tonne to about 60 cents, and there’s a 50/50 chance it’s below zero. It does grow over time but not by much. By 2050 it’s still under $3 per tonne and has a 46 per cent chance of being less than zero.

Note that we did not say “climate change is a hoax so we shouldn’t do anything.” We relied on scientific studies in mainstream journals, combined with one of the Obama-era EPA’s own preferred economic models, to determine if costly climate policies are justified. The answer is no, at least not for the next few decades.

Our paper was reviewed by three knowledgeable anonymous experts who were surprised by our findings and aggressively challenged them, with one strongly recommending our study be rejected. We had to rebut their extensive counterarguments in detail. We were able to defend our calculations and the journal decided in our favour.

If you don’t believe the science of climate change, then you obviously won’t support carbon taxes and other such policies. But it’s important to note that if you do accept the science, you aren’t obliged to support every policy, no matter how costly or inconvenient, that gets put forward. We should still focus on no-regrets strategies where the benefits outweigh the costs.

This article was originally published on FinancialPost.com.

Photo by NOAA on Unsplash.