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February 24, 2014

Social Cost of Carbon – ACCCE Report Review

We’ve written extensively about the Social Cost of Carbon (SCC), including  here and here, and we have placed an extensive SCC knowledge base on the web which you can access here.

Today’s post, though, relates to a recent report from the American Coalition for Clean Coal Electricity (ACCCE).  The report, entitled The Social Costs of Carbon? No, the Social Benefits of Carbon, starts out with what is a logical question: “what happened to the benefits” in all the discussions about the SCC.  The report proceeds to argue that the benefits of carbon emissions are enormous, and that any costs are trivial by comparison (with a benefit/cost ratio of more than 200:1).  The report has also been blogged about here and here, for example.

dunce on stoolAt almost 200 pages, one might anticipate that the ACCCE report would pose a significant challenge to the ~$35/ton SCC value set by the Office of Management and Budget for federal agency decision-making.  For better or worse, that’s not the case.  Indeed, the fundamental analysis is so flawed that it’s hard to believe the ACCCE paid the writer’s invoice for the report. The report simply argues that carbon has underpinned industrialization to date (no argument here), and therefore it’s reasonable to assume that the planet’s entire economic output can be attributed to carbon emissions.  By then dividing global GDP by global emissions you end up with a “social benefit of carbon” dollar figure that is more than 200 times the SCC figure. pouring water As any high school economics student could tell you, however, confusing correlation and causation in this way is a beginner’s mistake.  It’s functionally equivalent to saying that because water is key to your health, you should drink more and more water (even though it will eventually kill you).

We explore the ACCCE report in the 7-minute video below using our Climate Risk Brain.  In that video we also explore the question of who is the ACCCE, and how can members of the ACCCE such as Ameren fund this report while simultaneously advertising their climate change bona fides (e.g., their Carbon Disclosure Project filings) at their website.  It’s a question people should ask the company


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Laura Kosloff

Laura Kosloff is an attorney with more than 30 years of environmental and natural resources experience. She has worked on numerous topics including hazardous waste, environmental justice, water law, and climate change. Currently she focuses on legal and policy issues relating to energy, climate, and other resource issues facing companies and organizations, with a growing focus on risk communication. She has worked extensively on the design of greenhouse gas mitigation and offset policies, and participated in carbon offset negotiations and due diligence.

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