Alex L. Marten

Incremental CH4 and N2O mitigation benefits consistent with the US Government's SC-CO2 estimates

Benefit–cost analysis can serve as an informative input into the policy-making process, but only to the degree it characterizes the major impacts of the regulation under consideration. Recently, the US, amongst other nations, has begun to use estimates of the social cost of CO2 (SC-CO2) to develop analyses that more fully capture the climate change impacts of GHG abatement. The SC-CO2 represents the aggregate willingness to pay to avoid the damages associated with an additional tonne of CO2 emissions. In comparison, the social costs of non-CO2 GHGs have received little attention from researchers and policy analysts, despite their non-negligible climate impact. This article addresses this issue by developing a set of social cost estimates for two highly prevalent non-CO2 GHGs, methane and nitrous oxide. By extending existing integrated assessment models, it is possible to develop a set of social cost estimates for these gases that are consistent with the SC-CO2 estimates currently in use by the US federal government.Policy relevanceWithin the benefit–cost analyses that inform the design of major regulations, all Federal agencies within the US Government (USG) use a set of agreed upon SC-CO2 estimates to value the impact of CO2 emissions changes. However, the value of changes in non-CO2 GHG emissions has not been included in USG policy analysis to date. This article addresses that omission by developing a set of social cost estimates for two highly prevalent non-CO2 GHGs, methane and nitrous oxide. These new estimates are designed to be compatible with the USG SC-CO2 estimates currently in use and may therefore be directly applied to value emissions changes for these non-CO2 gases within the benefit–cost analyses used to evaluate future policies.

Incorporating ‘catastrophic’ climate change into policy analysis

Although existing economic research is informative with regard to the importance of including potential ‘catastrophic’ climate change impacts in the analysis of GHG mitigation benefits, the generic and abstract form of the ‘catastrophe’ implemented has led to a lack of specific policy implications. This article provides an important starting point for a discussion of how to improve economic modelling of potential large-scale impacts of climate change. It considers how the term ‘abrupt climate change’ has been used in the scientific literature to describe changes in the climate system and carefully reviews the characteristics of the events that have been discussed in this context. The findings are compared to the way in which the economic literature has modelled potential economic and human welfare impacts of these ‘catastrophic’ events. In general, the economics literature is found to have modelled such impacts in a uniform way that fails to account for differences in relevant end points and timescales. The result is policy recommendations based on events that do not resemble those of concern. Better treatment of these events in integrated assessment modelling would help ensure that future research efforts can serve as meaningful policy input.

THE ROLE OF SCENARIO UNCERTAINTY IN ESTIMATING THE BENEFITS OF CARBON MITIGATION

The benefits of carbon mitigation are subject to numerous sources of uncertainty and accounting for this uncertainty in policy analysis is crucial. One often overlooked source uncertainty are the forecasts of future baseline conditions (e.g., population, economic output, emissions) from which carbon mitigation benefits are assessed. Through, in some cases highly non-linear relationships, these baseline conditions determine the forecast level and rate of climate change, exposed populations, vulnerability, and way in which inter-temporal tradeoffs are valued. We study the impact of explicitly considering this uncertainty on a widely used metric to asses the benefits of carbon dioxide mitigation, the social cost of carbon (SCC). To explore this question, a detailed integrated assessment that couples economic and climate systems to assess the damages of climate change is driven by a library of consistent probabilistic socioeconomic-emission scenarios developed using a comprehensive global computable general equilibrium (CGE) model. We find that scenario uncertainty has a significant effect on estimates of the SCC and that excluding this source of uncertainty could lead to an underestimate of the mitigation benefits. A detailed decomposition finds that this effect is driven primarily through the role that uncertainty regarding future consumption per capita growth has on the value of inter-temporal tradeoffs through the consumption discount rate.

Policy Monitor U.S. Emergency Response and Removal: Superfund’s Overlooked Cleanup Program

Over the past five decades, the U.S. government has enacted laws and developed regulations to respond to actual and threatened releases of hazardous substances. This article describes a relatively understudied component of the nation’s response capability: the Superfund Emergency Response and Removal Program. This program addresses a wide range of threats, complicating efforts to assess its net benefits. We examine a new dataset of 113 recent removal actions at 88 sites in the U.S. Mid-Atlantic region and find a great deal of diversity across sites, from the causes of contamination to the types of risks and the cleanup strategy. Contamination most frequently resulted from improper disposal, handling, or storage of materials. Soil, air, groundwater, and surface water contamination were prevalent at these sites, but risks from not yet released contained contaminants and potential fire or explosion were also common. We describe the involvement of potentially responsible parties and examine EPA expenditures on removal actions. Finally, we consider challenges for future research into the net benefits of the program.