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The Cost Quagmire
By Claus Schafhalter | March 4, 2010
Wherever you stand on the global warming debate, one thing is indisputable: Carbon dioxide content in the earth’s atmosphere increased over the last 100 years by more than 25%. And again, wherever you stand on the global warming debate, it should be clear that such a change in CO2 does trigger changes. Whether you think that the earth will get warmer or cooler does not matter for today’s consideration, it is sufficient to accept that there will be a change. And changes either cost or save money.
Economists and scientists across the world are trying to put a price tag (or earning tag) on impacts of changes in the earth’s CO2 Content. I find it pretty interesting to look at some results.
There is one study that combines 88 estimates of the marginal costs of carbon dioxide emissions gathered from 22 published studies. They combined the results to form a probability density function. According to their numbers the cost of emitting carbon dioxide (as calculated per tonne Carbon) shows the mean as $104/tC, and the 95 percentile $446/tC.
A different study calculated the following numbers (Yohe, 2007): Average value of $43/tC with a standard deviation of $83/tC.
These numbers are interesting in itself, however there are two striking things I can take away: There is a cost impact when emitting CO2. However the actual amount of this cost is highly uncertain.
At the end of the day we currently do not know the actual cost of emitting Carbon Dioxide. Okay, does this mean we should wait and see and do nothing? I don’t think so!
Claus Schafhalter, Sunogos
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