A study published Monday in the journal "Nature Climate Change" finds the number the U.S. uses to estimate the social cost of carbon is too low, and that the U.S. is among the countries with the most to lose under climate change. Others include India, Saudi Arabia and China.
The United States doesn't have a national tax on carbon emissions, but it does use the social cost of carbon to estimate the damage that emitting one ton of carbon dioxide will cause society.
Researchers apply a measurement of the social cost of carbon to determine the impact that policies or projects might have on society when their carbon emissions contribute to climate change — and its effects like heat waves, rising seas and extreme weather that can take a toll on property and human health.
"From a purely self-interested standpoint, the U.S. has an incentive to price carbon much higher than we do right now," said Kate Ricke, an assistant professor at the University of California-San Diego and the study's lead author.
The U.S. — and Minnesota — both price carbon around $40 per ton. For example, in Minnesota, if a utility wants to build a new power plant, it has to calculate how much that power plant would cost in real dollars as well as what the emissions would cost society.
But Ricke said when damages from sea level rise, extreme weather and other effects are taken into account, the global social cost of carbon is $180 to $800 per ton, rather than the $12 to $62 range used by the U.S. Environmental Protection Agency. In addition, the Trump administration has suggested the range should be more like $1 to $7 per ton.
"The Trump administration has recommended actually revising the estimate we use in our regulatory impact analyses down. Our study would support a higher social cost of carbon," Ricke said.
According to the study, carbon emitted in the U.S. each year is costing the U.S. economy about $250 billion.
As part of a separate study that led to new social cost of carbon values in Minnesota a couple years ago, researchers found that the social cost of just generating electricity in the state in 2015 was more than $2 billion, said J. Drake Hamilton, science policy director for Fresh Energy. The analysis was limited in scope, she said.
"Costs that weren't included in Minnesota's analysis were sea level rise, the cost of ocean acidification, which can damage the food supply for about a billion people, the cost of climate refugees, people who with global warming will move to places where they can better keep their families alive and overall food supply concerns," Hamilton said.
"These are very big issues, and unless your model includes all of those damages, it really doesn't reflect the global, long-term damage."