Pricing Climate’s Slow Moving Catastrophe

September 20, 2021

After a summer of extreme “NB4” (Never Before) events, I’m working on a video piece showing the increasing realization that climate change is not just about polar bears, but increasingly impacting bottom lines, and human health in expensive ways.
It’s important because the “cost of carbon”
My friend Dana Nuccitelli has this at Yale Climate Connections.

Dana Nuccitelli in Yale Climate Connections:

Those opposing a fast transition to renewable energy and other aggressive action to fight catastrophic climate change often argue that the economic costs would be too great.  Now, with the proliferation of extreme hurricanes, droughts, floods, wildfires, and other disasters linked to a changing climate, it has grown more apparent that the status quo also carries a cost – defined as the “social cost” of carbon.  But recent research indicates existing economic models may have low-balled those potential social costs by trillions of dollars.

Papers accounting for the value of nature and heat-related mortality conclude that the social cost of carbon is in the hundreds of dollars per ton of carbon dioxide pollution.  A new study published in Environmental Research Letters (ERL) also finds that the cost of doing nothing could be 15 times greater yet. The trillion-dollar question for climate economists is: will climate damages have persistent effects that result in slower economic growth?

“Climate change makes detrimental events like the recent heat wave in North America and the floods in Europe much more likely,” noted the new study’s co-author Chris Brierley of the University College London. “If we stop assuming that economies recover from such events within months, the costs of warming look much higher than usually stated. We still need a better understanding of how climate alters economic growth, but even in the presence of small long-term effects, cutting emissions becomes much more urgent.”

The Obama administration pegged the social cost of carbon at about $50 per ton, but the Trump administration reduced the federal social cost of carbon estimate to near zeroby heavily discounting the value of future generations and entirely disregarding the wellbeing of humans beyond U.S. borders. The Biden administration reversed those changes by restoring the Obama administration estimate and now is in the process of incorporating the latest research to further update the value.

In a separate but relevant new report, the World Meteorological Organization has found that over the past five decades, the number of extreme weather disasters has increased fivefold globally and associated costs have increased sevenfold. More than half of those costs have been borne by the United States, largely because of damages resulting from extreme Atlantic hurricanes like Katrina in 2005, Harvey, Maria, and Irma in 2017, Sandy in 2012, and Andrew in 1992. Damages from these storms totaled almost $500 billion (nearly $1.2 trillion when adjusted for inflation). This year’s Hurricane Ida is expected to add $95 billion to that total. And as the latest IPCC report concluded, hotter global temperatures and ocean waters will cause a greater proportion of tropical cyclones to rapidly intensify and become dangerous Category 4 and 5 hurricanes.

Many climate-economics models have assumed the global economy will keep growing at a steady rate no matter how much the climate changes. Over the past decade, more and more climate economists have questioned this assumption, noting that economies will increasingly struggle to fully recover from persistent and worsening climate damages.

UC Davis climate economist Frances Moore, who was not involved in the new ERL study, said the novel part of its approach involves figuring in the possibility of “partial persistence” of damages from climate change.  “This is probably a more realistic representation of what is really going on” as opposed to previous studies that either chalked up damages as permanent “or not persistent at all.”

The ERL study concluded that if just 10% of economic damages from climate change were to persist and reduce economic growth, the social cost of carbon would increase by a factor of 15, into the thousands of dollars per ton. Moreover, the authors found that these adverse economic impacts would be heavily borne by countries in Africa, South Asia, and Latin America: developing countries that have contributed the least to the climate crisis, but which are the most vulnerable to its impacts as a result of  their already hot climates and lack of resources available for adaptation efforts.

The study authors also investigated the possibility that countries could reinforce their resilience to persistent climate damages through adaptation measures. They concluded that keeping the social cost of carbon below $600 per ton “would require lowering the persistence of temperature-related economic impacts by half within less than 25 years.” Such an approach would require immense investments in climate adaptation that would be especially difficult for poorer countries to afford.

Buzzfeed:

The US government will develop national rules to protect workers from extreme heat, part of a series of initiatives announced by the Biden administration on Monday morning to address the growing health risk posed by climate change.

“As with other weather events, extreme heat is gaining in frequency and ferocity due to climate change, threatening communities across the country,” President Joe Biden said in a statement. “My administration will not leave Americans to face this threat alone.”

Extreme heat is now the leading weather-related killer in the US — and this summer revealed how unprepared the country is for the emerging threat. Hundreds of people died in June from a record-shattering heatwave that battered the Pacific Northwest, a region where many people don’t have air conditioning. A team of scientists found that the brutal heat wave would have been “virtually impossible” without climate change.

More recently, heat was the biggest killer in New Orleans following Hurricane Ida, which left the city without power for days. 10 of the 14 local deaths caused by the storm were due to heat, a number experts say is sure to be an undercount of the true toll.

In the absence of federal heat rules, workers have been especially vulnerable to extreme heat. At least 384 workers have died from environmental heat exposure across the US in the past decade, according to reporting by NPR and Columbia Journalism Investigations. And only a handful of states have tried to fill the gap, with Oregon and Washington establishing temporary heat standards just this year.

Climate activists celebrated the long-awaited change, which will begin with the Occupational Safety and Health Administration launching the process to develop a federal heat standard for workers.

OSHA will also boost heat-related enforcement of companies, conducting more workplace inspections on days when the heat index exceeds 80 degrees and dedicating “additional resources to responding to heat-related complaints,” according to a White House fact sheet.

“I’m particularly excited that OSHA will take immediate steps to improve heat safety for workers,” Juanita Constible, a climate health advocate at the Natural Resources Defense Council, told BuzzFeed News by email. “Developing a strong, enforceable occupational heat standard could take years. But we saw this summer that workers can’t wait; they need protection now.”

The new government-related heat efforts will expand beyond the workplace, too.

One way communities can help those without air conditioning in the midst of a sweltering heat wave is to provide public places where people can cool off, also known as “cooling centers”. Using stimulus money, the Environmental Protection Agency will now be offering technical support to communities to convert schools into cooling centers during heat waves.

Additionally, the Department of Homeland Security announced it will be launching multiple competitions aimed at boosting the nation’s resilience to climate change.

“The first competition in this series will focus on new ways to protect people at risk of heat-related illnesses or death during extreme heats or in connection with other disasters,” the fact sheet said.

Constible commended the new initiatives as a good first step. “The package has a good emphasis on equity,” she said, “but it’s clear that congressional action will be needed to get us beyond just better understanding the problem to solutions that communities can use.”

6 Responses to “Pricing Climate’s Slow Moving Catastrophe”

  1. Roger Walker Says:

    Yes, yes, yes – this is the nuts & bolts of it. Contrary to what many lay people think, “science” is not just about mind-bending new discoveries that catch the medias’ attention, it’s about beavering away at and around new knowledge. Filling the interstices. If X is true, what are the implications for a,b,c etc.? This is the academic spadework that turns high theory into handle-able numbers and concrete on-the-ground scenarios.

  2. redskylite Says:

    Priority is to protect the outside workers, the ones that have to toil under the heatwaves. For a start companies must be held accountable. Human life does have a value. No debate, no delay. No bullshit.
    ============================================

    “The order comes as public health and environmental groups have put pressure on the administration to create enforceable standards for outdoor workers exposed to extreme heat, at a time when the number of high heat days is projected to increase significantly due to climate change.”

    https://news.trust.org/item/20210920130133-bvfqr/

    “His body temperature registered 107.1 degrees — high enough to shut down internal organs such as the heart and kidneys. An autopsy listed the cause of death as heatstroke.”

    https://www.houstonpublicmedia.org/articles/news/in-depth/2021/09/07/407895/texas-workers-are-dying-in-the-summer-heat-and-companies-arent-being-held-accountable/

  3. indy222 Says:

    OH, but…but….but…. William Nordhaus won a NOBEL Prize for saying that the OPTIMUM global temperature is far above today’s temperature. Really! A NOBEL Prize (well, OK, Alfred Nobel hated economists and wouldn’t fund a prize, but….but…but… the Swedish National Bank stepped in and bought rights to the name, so it’s all totally totally legit…. right?

    • J4Zonian Says:

      Bill and his partner Mike (Shellenberger) should be subject to a form of designer’s punishment on that one, I think. Assets confiscated, forced to live on day laborers’ pay without compensation for hot days.

      The problem is that about the only thing you can do in many cases is make employers stop work when it’s above a certain wet bulb temperature. Which is great and needed, except will they require employers to keep paying workers who aren’t working? Or will employers find ways to weasel out of that? Part time temp workers? (No irony intended) Fire everybody every hot day & rehire them when it cools off the next day? Declare a state holiday whenever the temp (the other temp) goes up? I’m sure lots of states would go along. Georgia Nordhaus Day, Ohio Official Adam Smith’s wife’s birthday, Southern Interstate Elbridge Gerry Day…

      As long as the oligarchic duopoly rules, even good rules–labor laws, infrastructure bills… will be further steps toward inequality and destruction.

  4. rhymeswithgoalie Says:

    OSHA will also boost heat-related enforcement of companies, conducting more workplace inspections on days when the heat index exceeds 80 degrees and dedicating “additional resources to responding to heat-related complaints,” according to a White House fact sheet.

    I’m sorry but a heat index of 80°F doesn’t seem very high at all to those of us who run around in Austin’s >90°F absolute temperature. I suppose they might use that number to check out places that tend to get hotter inside than outside, or where people are wearing un-cooled hazmat suits or other heavy protective clothing.

  5. Gingerbaker Says:

    The social cost of carbon is WAY higher than the figures that get bandied about, because we tend to use time frames that apply to our own lives. A decade is a long time to a human, and the idea of year 2100 still seems impossibly far off.

    But the carbon we put into the atmosphere in 1950 is still going to be with us for thousands of years. Thousands. Of. Years.

    One analysis: [https://archive.thinkprogress.org/scientists-find-net-present-value-of-climate-change-impacts-of-1240-trillion-on-current-emissions-754446a2cd64/]

    pegged the global adaptation costs to AGW at over one quadrillion dollars and that was only to year 2100. 80 years. What about the next two thousand years ?!?

    This means that true social cost of carbon is, for all intents and purposes, essentially infinite. Every penny we spend today to reduce the burning of fossil fuel will have the highest ROI ever seen on Planet Earth if we only have the honesty it takes to use the proper time frame of analysis.


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