400 ppm and the rising cost of climate change

Last week brought some sobering news from the Mauna Loa Observatory where the Keeling family has been dutifully recording atmospheric concentrations of carbon dioxide since 1958. On May 9, measured concentrations surpassed 400 parts per million (ppm). [1]

Of course, from a scientific perspective, there is nothing particularly significant about the number 400. But cognitively, round numbers have an ability to attract attention as symbolic –and in this case, unnerving- milestones.

For those of us who aren’t accustomed to thinking in terms of parts per million, it is useful to put this number 400 into perspective. Before the Industrial Revolution, atmospheric carbon dioxide concentrations were approximately 280 ppm. When Dr. Charles David Keeling first set up shop on Mauna Loa to collect the daily measurements that comprise the so-called “Keeling curve” (see below), C02 levels were measuring at 315 ppm. A growing number of scientists and climate experts have identified 350 ppm as the safe upper limit (spurring the creation of 350.org).

Perhaps more alarming than the number 400 is the rate at which we got here. Looking at this graph, you can see that atmospheric carbon dioxide concentrations are increasing at an increasing rate. Over the past 10 years, the annual rate of increase in carbon dioxide concentrations has averaged 2.07ppm. This is more than double the rate of increase in the 1960s.

More bad news from the economists…

Climate scientists monitor concentrations of greenhouse gases in the atmosphere in terms of ppm. Economists are more concerned with SCC. The “social cost of carbon” (SCC) measures the present value of the economic damages (in dollar terms) associated with an incremental increase (usually a metric ton) in carbon dioxide emissions in a particular year.

Whereas climate scientists can directly measure concentrations of greenhouse gases in the atmosphere with precise (and really cool) instruments, estimating the SCC is a far more complicated and controversial endeavor. If only we had the equivalent of a non-dispersive infrared instrument to precisely measure the social cost of carbon in the global economy! Instead, economists build integrated assessment models to capture the interactions and feedbacks between the climate system and the economic system. These models (e.g. RICE, FUND, PAGE) are then used to simulate how incremental changes in greenhouse gas emissions affect economic outcomes.

The limitations of these integrated assessment models are well documented. Work to improve and refine these models is ongoing. Importantly, as these models get fine tuned, estimates of the social cost of carbon are being adjusted up.

Take, for example, the influential RICE/DICE models that have figured prominently in SCC calculations. The graph below, taken from a recent paper by William Nordhaus, summarizes how the optimal carbon tax trajectory (a concept closely related to the SCC) has been adjusted as the models are refined.

carbon tax

In 1999, the optimal carbon tax in 2015 was estimated to be in the range of $10 per ton of carbon dioxide. When the model was updated in 2010, the 2015 value increased to $40. The PAGE model provides another important example. When this model was recently updated, the mean SCC estimate increased from $81 to $106.

What is driving these increases? The answer is complicated and involves a host of factors (including how global production is measured, how temperature sensitivities are modeled, assumptions about the effectiveness of adaptation, economic preference parameter choices, etc.). But the punch line is simple: climate change is going to cost more than previously thought. And we should expect to see these upward adjustments continue as researchers account for more of the ways in which climate change damages manifest.

Not all the news is bad

Fortunately, not all trends germane to climate change are moving in the wrong direction. Importantly, whereas estimated costs of emissions are increasing, the costs of some important mitigation measures are coming down. Since 2008, wind turbine prices in the U.S. have fallen by nearly one-third. Reported installed prices of U.S. residential and commercial solar PV have declined 5-7 percent per year between 1998 and 2011. PV system prices fell by more than 26 percent in 2012.

This is not to suggest that steering ourselves onto a more sustainable course will come easy or cheap. It won’t. But as we burn past 400 ppm with no signs of slowing down, the economic case for taking substantive action has never been stronger.

[1] There is still some uncertainty about whether the 400 ppm threshold was actually exceeded. Whereas NOAA revised its reading to 399.89, a second monitoring program run by Scripps Institution of Oceanography read 400.08.

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3 Responses to 400 ppm and the rising cost of climate change

  1. Jardinero1 says:

    CO2 emissions do not produce negative externalities in the way that ground level ozone, lead, mercury, dioxin, fecal coli-form bacteria, particulate matter and fertilizer runoff produce negative externalities. Rising CO2 levels could be a feature or a bug depending on other factors which effect climate and depending on how man chooses to adapt. The fact of the matter is that since CO2 concentrations started to rise two centuries ago, the earth has been able to support ever more human beings with an ever higher standard of living. The models belie the historical evidence.

    Environmentally, the historical record is on the side of CO2 being a net positive. In last 100 million years, CO2 levels were once higher than 2000 ppm. In earlier periods, with much higher CO2, the earth was warmer,wetter, ecologically more diverse, less desertified and had much less ice. Declining CO2, over the last 100 million years, corresponds closely with a colder, drier, desertifying and frozen planet. Given a choice between the former climate and the latter, I choose the former.

    So barring any conclusive proof, that humans will be harmed in either the near term
    or long term by CO2, a Carbon tax would be just that, another tax. In addition to the tax, there would be all the associated book keeping and auditing work which a tax implies. It would require more government, at all levels, to collect as well.

  2. brycenuc says:

    If we stop all man-made CO2 additions to the atmosphere immediately and permanently, there will be never be a detectable decline in either the atmospheric CO2 level or its temperature. Conversely, if we continue to increase CO2 at the current rate or even an increased rate, we will exhaust all the available carbon in our fossil fuels before the CO2 level exceeds any possible harmful value.

    The unassailable proof of both the inability of CO2 to cause environmental harm and our inability to do anything about it if it did, lies in the inability of the atmosphere to retain the CO2 that is put into it. The atmosphere is a very leaky volume. It exchanges CO2 molecules across its boundaries with the land and the ocean at a rate of 20 times that which man has ever put into it with his use of fossil fuels. The exchange occurs in both directions, atmospheric molecules into the land (with its plants) and into the ocean, and ocean and plants into the atmosphere There is an equilibrium level for these three CO2 reservoirs when the exchange rates in each direction at the boundaries are equal and no change of level occurs. But when imbalance occurs, as with man’s insertion of CO2 into the atmosphere, it’s level rises above the equilibrium point and more molecules exit than enter. With increasing CO2 input to the atmosphere it maintains a level above its equilibrium point with its neighbors. If that rate stabilizes, a new equilibrium level will ultimately occur with a greater exchange rate than prior to the start of the input. If for some reason the atmospheric level drops (as with a possible CO2 extraction and sequestration rate). The exchange from the land and ocean into the atmosphere will exceed that which goes out. But man’s extraction and sequestration rate has never even approached that which is input through fossil fuels. And, as indicated, even achieving the matching of the input level will not cause a perceptible drop in atmospheric CO2 or temperature level.

    The conclusion is that man is powerless to lower atmospheric CO2 level even if he stops all fossil- fuel use. Fortunately, however, the level of increase will be limited by the exhaustion of fossil fuels and this limit is very tolerable.

  3. F Paul Brady says:

    But consider all the economic benefits in places like China due to plentiful and cheap fossil fuels. The warming since the last ice age has been beneficial, pushing ag production much farther north, altho there have been fluctuations such as the abandonment of the Greenland settlements. It is also true that places like China are attempting to replace coal by Nat Gas, nuclear and solar to reduce pollution now that the they can afford to do so. It is crazy to suggest that the ” economic case for taking substantive action has never been stronger.” There is no economic case for such – just the opposite! There is much economic progress to be made around the world!

    The large increase in CO2 for more than a decade has not been accompanied by the predicted temperature increase – there has been, within statistical limits, no increase in 13 years. The models assuming CO2 produces all the temperature increases have been wrong. The eastern US, Europe and Asia had weather so cold for so long – way beyond expectations, that some climatologists wondered if the next ice age, now due, is showing a preview.

    During this century the price of fossil fuels will rise and alternatives will become economically attractive. We have to let economics make the call. The cost of doing otherwise is huge – much more economic to pay for any needed mitigation of possible pemperature increases. Note that CO2 mainly makes cold, dry places warmer, but does little in tropical-to- temperate climes: Water vapor dominates the latter.

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