President Barack Obama’s pledge to slash U.S. greenhouse gas emissions by 80% from 2005 levels by 2050 might cost more than $5 trillion over three decades, according to a new analysis.
More than 190 countries announced similarly ambitious targets in Paris in December, but none included estimates of the costs.
For the U.S., they’re huge: up to $176 billion a year, or $5.28 trillion over 30, according to Columbia Business School economist Geoffrey Heal. His new paper breaks down the costs of the most important prerequisite for achieving the target: making electricity generation carbon-free.
The costs aren’t a line item in the federal budget, but would largely be picked up by utilities, which would pass on the capital costs to consumers.
“The short answer is: You and I will be paying,” Mr. Heal said in an interview.
That estimate includes savings from not having to buy as much gas and coal (sunshine and wind are free), or replace existing fossil fuel power stations.
It doesn’t calculate potential environmental benefits, such as avoiding flooding, air pollution or damage to farmland. ...
Mr. Heal reckons the costs, which amount to about 1% of U.S. GDP a year, are achievable and manageable with “very strong” financial incentives from government, such as a carbon tax. ...
Though the presidential candidates have been largely silent on the topic, Democrat Hillary Clinton says she’ll deliver on Obama’s Paris climate pledge. Republican Donald Trump, on the other hand, says he would cancel the agreement.
Mr. Heal would like to see a deeper conversation.
“It’s a sad comment on the political debate. This will affect people’s children and grandchildren,” Mr. Heal said.
I'm ignorant, where did the 80% target come from? I'm almost sure it was chosen so the world won't get too crispy in a physical and biological sense. But you wonder if this is the optimal amount of mitigation. Benefit-cost analysis could be used to choose the optimal target.
Imagine that the benefits and costs are estimated and the marginal (additional) benefit and cost curves look like below. A target of A is not tight enough since the additional benefits of a higher target are greater than the additional costs. A target of B maximizes the net benefits. A target of C is too tight since the additional benefits of a higher target from B are greater than the additional costs. My guess is the 80% target looks like C. When we account for the "huge" costs we'll want to scale back our promises but to something like B, not 0%. This is what is meant by "deeper conversation."
Note: The vertical axis is not quite vertical. About halfway down it goes right. Damnit!