GLP Member Research in the News

Should the social cost of carbon be higher?

As the Trump administration slashes federal estimates of the future costs of climate change, new research suggests that even the much higher cost calculated by the Obama administration might be too low.

A new study indicates that properly accounting for the impacts on agriculture could substantially raise estimates of how much global warming will cost the world in damages. While higher levels of carbon dioxide may provide some benefits to plants, research increasingly suggests that the negative effects of rising temperatures will outweigh these advantages on a global scale. This means agriculture may suffer far greater losses in the future than previous estimates indicated. And accounting for these damages significantly raises the value of the social cost of the carbon, an oft-used federal metric that estimates the monetary costs associated with emitting climate-warming carbon dioxide into the atmosphere.

"I think this exercise, and the body of scientific evidence that it rests on, kind of show that, yes, while not every effect of climate change is negative—you do get benefits from CO2 fertilization—the negative effects of warming in most areas more than cancel that out," said Frances Moore, an environmental economics expert at the University of California, Davis, and lead author of the new paper.

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In 2014, Chhetri and a group of colleagues conducted a meta-analysis of more than 1,700 existing studies on climate change and crop yields, which helped sum up all of the existing scientific knowledge in the field. For the new study, Moore and her co-authors—Uris Baldos and Thomas Hertel of Purdue University and Delavane Diaz of Stanford University—revisited some of that same body of literature.

With the help of maps and projections of global temperature change, as well as models, they were able to apply the findings from all the individual studies available to agriculture at a global scale. Then, they incorporated these updated global assumptions about climate change and agriculture into the model used to calculate the social cost of carbon.

Before their study, the model had suggested that climate impacts on agriculture would actually be a net benefit to the global economy, amounting to about $2.70 per ton of carbon dioxide emitted. But after updating the model with the latest science, the impact on agriculture changed to a total loss of about $8.50 per ton. When these losses were accounted for, the model's estimate of the social cost of carbon as a whole nearly doubled.

"This suggests that there's a lot of work to be done, and that it's possible and desirable to kind of build these damage functions on a more current scientific basis than they're currently built on," Moore said. While agriculture is not necessarily the only climate impact sector that may be in need of updating in the models, the new study constitutes a "first step," she added.