Climate change is a classic tragedy of the commons: every country acting in its own self-interest contributes to depleting a joint resource, making the world worse for everyone. If you’ve ever lived with bad roommates, the concept will be easy to grasp. The social cost of carbon (or SCC) is a way to put a price tag on the result of that tragedy, quantifying just how much climate change will cost the world over the coming generations.
But a paper in this week tries to bring the cost closer to home by estimating what the SCC could be for each different country. These new calculations point to a wide range of different cost possibilities but with a few consistent messages: the cost is likely to be higher than previous estimates; the US will be one of the worst-hit countries; and many of the countries contributing the least to the problem will be slammed regardless.
Transparency, uncertainty, and rigor
The concept of SCC has been around for a long time, with a huge range of different ways to calculate it. Because it’s impossible to know for sure what the future holds, those estimates end up with quite different outcomes depending on the assumptions they make. For instance, it’s impossible to know for sure what economic growth will be, and so different educated guesses about that will lead to different SCC estimates.
That kind of uncertainty led to a recent National Academy of Sciences report that recommends three important qualities that estimates of SCC should prioritize. Estimates should be transparent, making it easy to see what assumptions went into the calculations; they should be scrupulous about explaining where the uncertainty lies and what the range of estimates looks like; and they should focus on basing their estimates on high-quality science.
Katharine Ricke and her colleagues took this advice seriously, providing a new estimate with open materials so that others can dive into the weeds and check their work. They focused on building their estimate on the best available data and on carefully showing how uncertainty about the future affects the results.
Those uncertainties are pervasive. There’s the uncertainty of carbon emissions themselves, how exactly the climate will respond to them, and what the damage of that response will be. There are schools of thought on how heavily future people’s interests should be weighted against our own. And there’s no way to be perfectly sure of what exactly population growth and GDP will look like.
Uncertain costs, but robust rankings
Ricke and her colleagues leaned heavily on empirical data for their calculations. They use up-to-date climate data, as well as recent estimates of how precipitation and temperature affect the growth rate of GDP. Their uncertainty range was wide: for the global SCC, the range ran from figures close to previous estimates of around US$40 per tonne of CO2, right up into US$5,000, with a few estimates even reaching $10,000. The mid-range estimate of the global SCC was US$417, around 10 times recent Environmental Protection Agency estimates.
The results suggest that India is the country likely to bear the highest cost per tonne of CO2, at a mid-range estimate of US$86. The US is in second place at US$48, followed by Saudi Arabia, Brazil, and China. The estimates themselves are uncertain, but the rankings, the authors write, are not: they stay pretty much the same regardless of where in the range you look.
The per-country costs are largely unfair: the countries that contribute the least to global carbon emissions stand to pay some of the higher costs. India, for instance, is set to pay around four times its fair share of the cost relative to its emissions. China, on the other hand, is the exact opposite. Cold northern countries like Canada and Russia even have estimates suggesting they could stand to have a net benefit from a warmer climate, although that doesn’t take into account other ways for climate change to ding their economies, like changing patterns of international trade.
This is far from the final word, as Ricke and her colleagues themselves write: “More research is needed to estimate the geographical diversity of climate change impacts and to help devise policies that align domestic interests to the global good.” And these calculations alone don’t give all countries an incentive to clean up their act—although there are, of course, other considerations. Quite apart from the uncertainties in what the model look at, plenty of factors didn’t even make it in, like rising sea levels and changing migration patterns.
But for the US, India, China, and others, these figures create a new way to understand their incentives to act on climate change. “Some of the world’s largest emitters,” write Ricke and colleagues, “also have the most to lose from their effects.”