Results from a new study by researchers from the Universities of Bristol and Cambridge in the UK has suggest that the social cost of carbon dioxide is higher in a low economic growth world. In other words, the findings suggest that policymakers should be paying more, rather than less, attention to tackling climate change in economically tough times. A paper on the study was published in the journal Nature Climate Change.
The researchers investigated a range of GDP growth rates from 2008 to 2100 to see what effect they have on the mean Social Cost of CO2 (SCCO2) for a range of economic scenarios. (The social cost of CO2 measures the net present value of the extra damage caused by the emission of one more tonne of CO2 today.)
Using data from integrated assessment model, PAGE09—designed to help policy makers understand the costs of climate change—the researchers calculated the cost of emitting an extra tonne of carbon dioxide today.
The results of the exercise show the damage caused by emitting an additional tonne of carbon dioxide today is $107, assuming economic growth of around 2% per year. The cost if economies continue to stagnate is $138 per tonne, however. The mean social cost of CO2 increases when economic growth is slow because the worst climate impacts occur in a relatively poor world. The results imply that the European carbon price is currently around $100 too low.
In economically tough times, governments' attention tends to shift away from the issue of climate change. Governments are abandoning climate action as they focus on reviving their economies. But our results show economic stagnation is no excuse for climate inaction. The carbon price should actually be higher if slow economic growth continues.—Mat Hope, Bristol School of Sociology, Politics and International Studies
Chris Hope & Mat Hope (2013) The social cost of CO2 in a low-growth world. Nature Climate Change doi: 10.1038/nclimate1935