Short Wave - The Social Cost of Carbon Is An Ethics Nightmare

Episode Date: February 9, 2023

One of the most important tools the federal government has for cracking down on greenhouse gas emissions is a single number: the social cost of carbon. It represents all the damage from carbon emissions — everything from the cost of lost crops and flooded homes to the lost wages when people can't safely work outside and the cost of climate-related deaths. Currently, the cost is $51 per ton of carbon, but the Environmental Protection Agency has proposed raising the cost to $190. NPR climate correspondent Rebecca Hersher tells Aaron how the change could dramatically alter how the government confronts climate change, and why the new number is simultaneously more accurate and an ethics nightmare. See pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

You're listening to Shortwave from NPR. Hello there, Rebecca Herscher. Hey. So what do you got for us today, my dear climate correspondent? Oh, I have a twisted tale of math, ethics, and climate change. Are you interested? Yes, I love a twisted tale. I know you do.

I know you do. Okay, so this story is about the most important tool that the Environmental Protection Agency has for cracking down on greenhouse gas emissions, like, reducing emissions from coal-fired power plants or making the exhaust that comes out of your car's tailpipe cleaner. And that tool, it is a single number. A single number, a digit, like, like four? Four, that is a number. Or more like four dollars. Okay. This number is expressed in dollars. It's called the social cost of carbon. And it represents all the cost of humanity of emitting one ton of carbon dioxide into the atmosphere. For example, the cost of lost crops and flooded homes and lost wages

when people can't safely work outside, plus the cost of climate-related deaths. Okay, so I want to get this straight. The EPA estimates the value in dollars of all of the bad things that happen because the climate change all over the world. And then it distills it down to this like one number, this dollar figure. This sounds like a PowerPoint presentation from help. Yeah, yeah, exactly. You got it. So, Rebecca, what is that number? What is the cost to humanity of emitting one ton of carbon dioxide? And I hope it's higher than $4. It is. It is. Don't worry. The actual number is $51.

I don't know what to make about that. Like, it feels low, but not as low as $4. but I don't know why I feel that way. Well, for whatever reason, your gut feeling is right, according to most climate experts. That number is probably an underestimate, which is why the EPA is proposing raising it by a lot to $190. Wow. Going from $51 to $190. I mean, it feels like a significant change. Yeah, absolutely. And the details of how they got that new, much higher number, that is where the controversy lies. Today on the show, the Environmental Protection Agency wants to update a number that has the power to dramatically alter the future of global warming.

And why that new number is simultaneously more accurate and an ethics nightmare. I'm Rebecca Herscher. And I'm Erin Scott, and you are listening to Shortwave, the Daily Science podcast from NPR. Okay, Rebecca Hersher, you said most climate experts agree that the social cost of carbon, one number needs to be higher. Why is that? So basically, if you look at how the number is calculated, it underestimates the human costs of greenhouse gas emissions. And that matters a lot because the Biden administration has promised to slash greenhouse gas emissions to zero across the country by 2050. But the federal government actually doesn't have that many tools in its toolbox to do that.

Tamac Carlton is a climate economist at the University of California, Santa Barbara. So we don't have other avenues or large-scale climate policy at a federal level. This is our main tool. Okay, so lay it out then. How can this one number be such a powerful tool for cutting emissions? Because every major regulation is required to go through something called a cost-benefit analysis to make sure that it's worth it, economically speaking, that the benefits of, say, reducing emissions from cars and trucks outweigh the costs to car companies and,

consumers. For example, this method was used to get rid of lead paint. And this calculation actually came up recently during the Trump administration. That administration was getting rid of some regulations about the emissions from cars and trucks, meaning that vehicles could emit more pollution. And one way that they justified that was to use a method for calculating the social cost of carbon that spit out a really low number, like about $10. And so by setting a really low cost, they could then, say it's not worth it to invest in cars to make them more efficient, right? Exactly. And on the flip side, a higher social cost of carbon number would make it easier to justify regulations that cut emissions, even if those regulations might not be politically

popular in the short term. For example, replacing all of America's power plants with renewable energy right away, or ending fossil fuel extraction in the U.S., that would be really expensive, right? If the benefits to humanity are poultry, maybe it doesn't make sense. But if the benefits to humanity are really big, then the government should do it. At least that's the idea. All right. So the EPA is proposing almost quadrupling the current social cost to carbon number. I'm guessing that's got a lot of people excited.

Yeah, totally. This number is way better than the earlier number. Daniel Hemel is a law professor at New York University, and he specifically studies these cost-benefit analyses. So going from $51 to $190, that's a more. move in the right direction. A move in the right direction. Doesn't sound like a resounding endorsement. I think I hear a butt coming.

Yeah. Daniel has concerns about the new number, specifically the way that the EPA is thinking about the lives that are lost from climate change. Because remember, to calculate this number, the EPA is adding up all the costs of emitting greenhouse gases. And one of the biggest costs is deaths. Climate change kills people.

There was a study last year that estimated 74 million. lives could be saved this century by getting to zero emissions by 2050. Noah Kaufman is a climate economist at Columbia University. The question is how to put a value on those deaths. This is the area of economics that has always made me a little bit queasy. I mean, how on earth does the EPA or any government agency calculate how much a life is worth? Well, the EPA says on its website that they're not putting a dollar amount on a human life. Instead, the agency says it, quote, uses estimates of how much people are willing to pay for small reductions in their risk of dying.

Uh-huh. That sounds like verbal gymnastics. What does it mean? Well, what the EPA is doing is they're using a very well-established economics method where they look at real-world data about the jobs that people have and how much they make and use that to estimate how much people will pay to reduce their risk of dying. And I wasn't able to ask the EPA more detailed questions about why they calculated it that way because the EPA declined to answer NPR's questions for this story. Anyway, Daniel, the law professor, says in reality, the EPA's social cost of carbon does put a dollar amount on human lives. You'll hear agencies say we're not valuing lives. I don't know. They kind of are. They're deciding how much it's worth it to spend in order to

save a life. And because climate change is global, they're thinking about all lives all around the world for the first time. That's one reason that the new social cost of carbon number is higher. Right. That makes sense. I mean, if I drive my car here in Oregon, the carbon dioxide it releases, goes up into the atmosphere and affects people all around the world, not just here in the U.S. Exactly. But not every death is being counted equally. The EPA uses higher dollar amounts for deaths in higher income countries and lower dollar amounts for deaths in lower income countries. Because they're using that method that looks at how much people are willing to pay, right?

And people with more money are willing or are able to pay more. Right. I called up a philosopher to help me make sense of this. His name is Paul Kelleher. He's a bioethicist at the University of Wisconsin. The badness of a death from climate change in India is treated as not as bad as exactly the same death if it happened at exactly the same time in the United States. According to the EPA's calculations, one climate-related death in the U.S.

has about as much value as nine deaths in India or five deaths in Ukraine or 55 deaths in Somalia. Becky, I don't even know where to start with this. I mean, it's like they're putting human lives into some sort of currency exchange rate. calculator and it just it doesn't feel right at all. Yeah, the philosopher, Paul agrees with you. Is a grave moral mistake? He says it's just not true that the lives of richer people are worth more. It's important to get it right because these are life and death decisions. Every molecule of carbon dioxide matters. Every ton of carbon dioxide matters. And so small changes in these dollar numbers, for example, the social cost of carbon, will make a big difference to who lives, who dies, how good their lives are, how bad their deaths are.

Daniel, the law professor, worries about how the EPA's choice could affect the thinking of people right here in the U.S. We send a problematic message to Americans when we use a method for assigning values to lives outside the United States that ends up valuing. light-skinned people from the global north, more than dark-skinned people from the global south. I also called up Vibe of Chaturvati. He's a climate economist at the Council on Energy, Environment and Water. That's a really influential climate think tank in New Delhi, India. Anybody in the developing world would kind of probably think in this kind of way. It is inherently inequitable to use this sort of approach. Okay, so there are all sorts of ethical arguments against doing things this way. Let's talk about the practical implications, though.

I mean, if the EPA values lives this way, how does that affect the usefulness of this social cost to carbon number? Right. That's a great question. Because remember, this is a really important tool for reducing greenhouse gas emissions. And this was actually Viab's main point. He said the U.S. government should put the same value on every life morally, but also logically, because America's greenhouse gas emissions endanger people everywhere. and especially in low-lying and low-income countries where people are more vulnerable to rising seas and extreme weather. Right. So, Becky, can we do a quick thought experiment here? Let's say the EPA changed its mind and put the same value on lives everywhere, regardless of country. How would the social cost-to-carbon number change? Do we know? So we don't know exactly what would happen, but we have a rough idea. So there was a study that the economist Tamac Carlton worked on last year. and it estimated that the EPA's number would approximately double if all lives were valued equally.

Wow. Vibov says that would be a good thing because it would push the U.S. to cut greenhouse gas emissions more quickly. That would mean that U.S. government will have to enhance the pace of action, because now the cost of car will be much higher. The social cost will be much higher. And that could lead to less emissions, which means less climate change in the coming decades, which would save lives. Yeah, that's the idea. I know that you said that the EPA declined to answer questions for MPR for this story, but do we know what comes next from the agency? I mean, they've proposed this $190 number. Now what?

Well, proposals like this, they go through a process where the public gets to weigh in. So that's happening right now until February 13th. And after that, the EPA will make a decision about whether to formally adopt this number. And I should say, the White House also has a group of people working to update the social cost of carbon. That effort would create a new number that theoretically the entire government could use, not just the EPA, but so far that group hasn't proposed anything. Becky, thanks for bringing this to us. I've got to admit, as I'm trying to process this, I just find it mind-boggling that one of the most powerful tools that the government has to confront climate change feels so utterly changeable depending on the data that economists decide to plug into it. Yeah, yeah, I hear you on that. I think also as a climate reporter, as a science reporter, that's why I think it's so important to focus on how this number gets calculated, even though it's super complicated. But, you know, this one number, it draws on so many fields, economics, philosophy, atmospheric science. And it's such an important tool for reducing emissions here in the U.S. Today's episode was produced by Margaret Serino, edited by our supervising producer Rebecca Ramirez, and fact-checked by Anil Oza.

Catherine Silva was the audio engineer. Brendan Crump is our podcast coordinator. Our senior director of programming is Beth Donovan, and the senior vice president of programming is Anya Grunbent. I'm Rebecca Hersher. And I'm Aaron Scott. Thanks, as always, for listening to Shortwave, the Daily Science Podcast from NPR.