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Excluding the benefits

By Kate Sheppard

In addition to low-balling the social costs of carbon, the system we use to account for the price of carbon reduction policies also fails to take into account the litany of benefits that stem from doing so. When you look at the potential positive results of cutting carbon, the benefit-to-cost ratio might actually be as high as nine to one, according to one study.

"For years we have been looking at only one side of the coin -- the negative effects of regulating carbon emissions," writes Michael A. Livermore, executive director of the Institute for Policy Integrity at New York University School of Law. His institute put together a report looking at the benefits of carbon-reduction strategies – something that estimates of cost from the Environmental Protection Agency and the Congressional Budget Office don't take into account:

The estimated benefits do not include a significant number of ancillary and un-quantified benefits, such as the reduction of co-pollutants (particularly sulfur dioxide and nitrogen dioxide), the prevention of species extinction and lower maintenance costs for energy infrastructure. Due to those limitations, the benefits estimates should be considered to be very conservative.

There are a number of positive outcomes of cutting carbon pollution, of course, including improved national security, public health and avoidance of other environmental problems, like ocean acidification. But the EPA modeling doesn't take those into account. This is important; right now, the EPA is running models on the Senate climate and energy bill from John Kerry (D-Mass.) and Joe Lieberman (I-Conn.), which the agency is expected to release sometime in the next few weeks. But their analysis will look only at the economic costs directly related to the price on carbon, not at the benefits.

Livermore has made this his mission. In a letter to EPA administrator Lisa Jackson in April, he argued that a "balanced and rigorous analysis of costs and benefits is an invaluable decision-making tool for legislators." To create sound policy, legislators need to understand the full range of consequences of the policy, both positive and negative.

"The costs of failing to act are just as important as the costs associated with taking action," he concludes. Indeed, if we're to have an informed debate about climate and energy policy, to exclude the benefits would leave the context lacking, to say the least.

Kate Sheppard covers energy and environmental politics in Mother Jones's Washington bureau. For more of her stories, see here, and you can follow her on Twitter here.

By Washington Post editor  |  June 2, 2010; 10:24 AM ET
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It is key to focus on the positive benefits of less air and water pollution. These are things people can observe, for which there is ample evidence, and for which the emissions cure is not exactly the same as reducing carbon usage. Crazy schemes like cap and trade only take us further from the fundamental problem of what to price- usage or emissions.

In addition, we need to look at the human cost of increasing the cost of carbon emissions or usage. Increasing transportation costs will result in higher prices for most products, hurt exports, and make global competitiveness more challenging, thereby reducing the amount of money available to workers while simultaneously increasing their cost of living.

Clean air and water are not dollars and cents benefits, but they are something that most of us are willing to pay for. The report you linked is garbage. You will not be cutting the cost of equipment maintenance, you will be creating new equipment with its own maintenance costs. Stick to the argument on the merits. Leave global warming out of it. The tangible benefits of clean air and water are something we are willing to pay for, don't pretend it's cheap.

Posted by: staticvars | June 2, 2010 1:51 PM | Report abuse

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