The future costs of methane emissions.

Abstract

take to decrease emissions of carbon dioxide, methane and other greenhouse gases? One answer is that any action aimed at decreasing such emissions should be taken if the cost involved is smaller than the social cost — the monetary value of future damage caused by letting the gas escape to the atmosphere. On page 564, Errickson et al. report estimates of the social cost of methane emissions (SC-CH4), to which one of the main contributors is cattle farming. Their estimates are smaller than those adopted by the US government under the administration of then-president Barack Obama, even though they incorporate new, higher estimates of the warming effect of one tonne of methane. Much of the decrease is because the authors use a more sophisticated approach to calibrate their models to historical climate-system observations. The SC-CH4 is defined as the harm, expressed as a present monetary value, of future damage of climate change caused by releasing an extra tonne of methane into the atmosphere. It can also be thought of as the reduction in damage that results from decreasing emissions by one tonne. Its magnitude depends on the time course of the incremental effects on the climate, the resulting consequences for human well-being and the way in which changes in the well-being of current and future generations are compared. The SC-CH4 can be estimated using an integrated assessment model (IAM), a computer program that simulates the effects of greenhouse-gas emissions on climate and on human well-being now and over future centuries. Recognizing that every model is imperfect, Errickson et al. followed the suggestion of the US National Academies of Sciences, Engineering, and Medicine to mix and match model components to estimate SC-CH4. The authors combined four simple climate-system models with two damage functions (components of IAMs that translate climate change into effects on well-being). In each of the eight resulting models, uncertainties in many of the climate parameters were accounted for by randomly sampling values from probability distributions for each parameter. The authors then used each model to ‘hindcast’ historical climate-system parameters, and thereby refined the probability distributions so that each model’s projections better fitted the historical record. Errickson and co-workers then produced probability distributions of future climate change and associated damage by running each model repeatedly using values randomly sampled from the refined probability distributions of climate parameters. Importantly, the likelihood of climate change and damage being at the high end of the estimated range of values was found to be lower than in previous analyses that did not refine the input distributions through hindcasting. This difference more than offsets the effects of using larger estimates of the warming effect of methane, decreasing the mean estimate of SC-CH4 by 22%. The authors also report ‘equity-weighted’ values of the SC-CH4. The underlying idea is that reductions in income have a smaller effect on the utility (a measure of well-being) of a wealthy individual than on that of someone on a lower income, and that climate policy should maximize the sum of individuals’ utilities. This has implications when calculating the harmful effects of climate change across populations. For a given point in time, the conventional SC-CH4 simply adds up the damage, measured in US dollars, for all individuals, and the value of the damage is increasingly discounted (given less influence in the analysis) the further in the future they occur. Equity weighting alters the calculations: damage experienced by low-income populations is weighted more heavily than is damage that affects wealthier populations; and damage to current generations is weighted more than is that to future generations, working on the assumption that incomes and well-being will continue to rise. Perhaps the most striking feature of the equity-weighted SC-CH4 is that the value differs by country (or world region; Fig. 1)). For example, for the baseline set of parameters used in Errickson and colleagues’ models, the authors estimate that the equity-weighted SC-CH4 is US$8,290 in the United States and $134 in sub-Saharan Africa. This means that the most costly US endeavours to decrease methane emissions should be more expensive than the most costly efforts undertaken by countries in sub-Saharan Africa. To put it another way, Americans and sub-Saharan Africans would sacrifice the same amount of well-being by paying about $8,000 and $100, respectively, to prevent one tonne of methane emissions; but they would provide the same climate benefit for future generations. This Climate science