NEW YORK—If climate change solutions are going to cross boardroom tables and pass through government chambers, the environmental issue must be translated into dollars and cents.
How much will it cost to do something about climate change? How much will it cost to NOT do something about climate change? Is damage control a worthless investment because the world is already past repair? What should be subsidized? What should be taxed?
Frank Ackerman of The Stockholm Environmental Institute (SEI) estimates that it would cost $150-$500 to clean up each ton of carbon dioxide (CO2) in the atmosphere using any of the methods widely discussed in the scientific community.
At a Bottom Line on Climate Change conference at the New School for Social Research in New York City on Friday, Ackerman compared the cost of cleanup to the “social cost of carbon”—the cost of NOT cleaning up or preventing further carbon emissions.
The U.S. government estimates the social cost of one ton of CO2 to be $21. Ackerman says this figure is at the lowest end of the spectrum of social cost estimates. Depending on the method used to derive the social cost of carbon, it can range from $6 to $893 per ton.
The $6 figure, Ackerman argues, is based on a model that includes a critical algebra mistake. This model is one of the three models the government used to come up with its $21 average. Ackerman says $28 is really as low as the cost could reasonably go.
At the heart of these vastly varying figures is a philosophical debate among economists.
To determine future economic values, some abstract factors are built into the equation—such as whether or not future generations are treated as equally important as the current generation. Economist William Nordhaus of Yale University explains this factor:
