The Social Cost Of Carbon

…and the much higher cost of carbon denial:

…the relationship between GDP and carbon is not merely linear, but quadratic, with total economic output rising as roughly the square of carbon use. For example, since 1975, carbon use has doubled, causing a quadrupling of global GDP. Furthermore, if we take the ratio of current global GDP ($60 trillion) to carbon use (9 billion tons) and divide it out, we find that, at present, each ton of carbon used produces about $6,700 of global GDP.

So each ton of carbon denied to the world economy destroys about $6,700 worth of wealth. That is the difference between life and death for a Third World family. Seven tons denied corresponds to a loss of $47,000, or a good American job. Since 2007, the combination of high oil prices and a depressed economy has reduced the United States’ use of carbon in the form of oil by about 130 million tons per year. At a rate of $6,700 per ton, this corresponds to a GDP loss of $870 billion, equivalent to losing 8.7 million jobs, at $100,000 per year each. Were we to implement the program of the Kyoto treaty, and constrict global carbon use to 1990 levels, we would cut global GDP by $30 trillion per year, destroying an amount of wealth equal to the livelihood of half of the world’s population.

These people understand neither science, or economics.

20 thoughts on “The Social Cost Of Carbon”

  1. “So each ton of carbon denied to the world economy destroys about $6,700 worth of wealth.”

    Kind of superficial analysis. Compare a Lincoln Navigator SUV, getting 8 MPG hauling 2 kids to school and getting groceries to a Tesla Model S. About the same price. the Tesla produces zero carbon, the Lincoln produces probably 1KG of carbon per mile. So drive that Lincoln around for a month, produce about a ton of carbon. Drive the Tesla around for a month, power it using solar PV on your roof.

    Is that really, depriving society of very much GDP? In this case, GDP is independent of Carbon production. It’s actually an interesting thing, GDP growth is really becoming independent of electricity consumption.

    A lot of econometrics from the 30’s are failing to take that into account, but,
    hey most economists are trapped in the past.

    1. And the odds are that the Tesla’s batteries are charged using electricity produced by a coal burning power plant. Perhaps you’re one of those people who think electricity comes from an outlet and food comes from a grocery store. There are a lot of such people in the DC area. That’s why the rest of the country hates them. DC is full of morons and the corrupt. They’re parasites.

      1. The odds depend upon you reading carefully..
        “Drive the Tesla around for a month, power it using solar PV on your roof.”

        Please Proceed,,,,

        1. You’ll need one hell of a PV system to not only power your house but to have the capacity to recharge a Tesla without having to draw power from the mostly coal-powered grid. You’ll need a damned big roof, too.

          1. Are you talking about needing to charge for daily use or charge for a 300 mile trip every day? If you are charging for daily commuting, you need to reliably produce about 10-15 KWH/day.
            You might need more if you commute more, but, the average american drives 50 miles/day, a Good Electric gets 3.5 M/KWH,
            so, yeah, you can make that work a fairly small array.

            And if your area has net metering, you have an array at home and you charge at work. To the grid, it’s a net zero load.

            But, Please Proceed, Larry.

          2. If you want to spend your own money like a damned fool, go right ahead. Just don’t ask for taxpayer subsidizies for your pipedream.

        2. I forgot to add, you’ll probably also need a night job that lets you recharge your car during the day while you’re asleep. Most people work during the day and their car is in the garage at night when PV panels are amazingly ineffective.

          1. I assume he means to charge at work, replacing the energy he takes out from his home setup.

            The numbers sort of work out with about 15 – 20 square meters of array area per vehicle dedicated strictly to personal transportation. As long, that is, as you live in the Southwestern US, outside of monsoon season. If not, fuggedaboutit.

          2. “I assume he means to charge at work, replacing the energy he takes out from his home setup. “

            How he intends to work that out with his employer, I have no idea.

      1. Which would work out to somewhere around 8 miles per kg of carbon. That’s probably about a fourth the amount of carbon a team of Clydesdale’s would use.

  2. You don’t think things through very well do you, dcguy?
    For starters look at the life cycle cost of both vehicles including batteries. The Solar PV on the roof is made from solar cells, aluminum, glass etc most likely made with electricity from from coal fired power stations. I’ve got an analysis on my PC of the carbon footprint of the Tesla Model S done by a consulting outfit. There are apparently one or two large SUVs with larger carbon footprints.
    GDP growth independent of electricty(or Oil) consumption? I think of it as ever more GDP depending on electricity and oil. Take those away and see how much GDP you have left.

  3. “most likely”
    is english for Wild Ass Guess.
    “consulting outfit”
    is english for Paid Liars.

    1. ““consulting outfit”
      is english for Paid Liars.”

      Don’t think you can say that without knowing more information. Instead of calling people paid liars perhaps you could address people’s comments about life cycle costs and the origin of electricity.

      This debate boils down to can electric cars be good vehicles and can they be good for the environment? They do not have to be both and currently are neither. That will change over the coming decades but they will become good vehicles long before they are good for the environment.

  4. So what about that life cycle cost?
    You can look up the % of electric power produced by various sources in China where most solar cells are made.
    I didn’t say I believed the analysis in every detail but it makes a good case.
    As for paid liars, are you a Democratic party paid plant? We seem to have those in Australia from our socialists too. They keep popping up on otherwise sensible websites.

    1. if you are interested in Life Cycle cost, I’d suggest you look up some of the work done by Bloomberg New Energy Finance, http://about.bnef.com/summit/
      They think the future is moving hard. I’m interested in the technology.
      I think not only is the Poly crystal and Monocrystal tech moving hard, thin film
      is really racing forward, along with nano-structure PV.

      You can debate all you want, i’m looking at $/W, and a decent sized home array is now running 12-14K. Not a check i want to write in one day, but, it’s not like the end of the world, it’s effectively 7 years electric bills.

      As I plan to keep my house, longer then that, it’s not a bad investment.

  5. the EIA has been reporting a fairly significant disconnect between GDP growth
    and Electricity consumption, for the last 5 years, it’s a fairly
    interesting problem, in that GDP and Electricity were in lock step for almost
    a 100 years, and now we see these lines diverging.

    Utility planners are having real trouble figuring it out. I suspect it’s growth in efficiency, and small scale renewables coming in under the radar.
    We are also seeing flatlining of vehicle miles driven and gasoline consumption.

    it’s why i’m critical of simple analysis of GDP value of carbon emission.

    1. Ya, our economy sucks right now. People are cutting back on electricity usage because they want to spend that money on food. It isn’t the secret widespread use of solar cells and windmills in people’s backyards. Also, our GDP is growing at around 1% right now and less than that at times over the last five years. Less use of electricity and gasoline and lower GDP.

      If you do live in DC, you need to get out and see what is going on in the rest of the country. DC isn’t like the rest of the country.

      1. “DC isn’t like the rest of the country.”

        You can say that again! dcguy response: “Let them eat cake!”

  6. http://www.eia.gov/todayinenergy/detail.cfm?id=10491
    “The growth in electricity demand has been significantly slower than GDP growth for decades. In the 1950s, 1960s, and 1970s the use of electricity often increased more than 5% per year. It then slowed to 2% to 3% per year in the 1980s and 1990s, and over the past decade it has fallen to less than 1% per year. Over the next three decades, electricity use is expected to continue to grow, but the rate of growth slows over time. The factors driving this trend include slowing population growth, market saturation of major electricity-using appliances, improving efficiency of several equipment and appliance types in response to standards and technological change, and a shift in the economy toward less energy intensive industry.”

    All i’m pointing out is that GDP growth and Electricity consumption is no longer in lockstep and has been changing hard since the 80s. Part of that is new tech.
    When I went to college, A computer lived in a big refrigerated room, and pulled 200 amps. Now, i can use a tablet computer, all day, and it’s running on a little battery and is charged at night.

    Part is efficiency, a 100 watt Incandescent bulb, used to light up the living room, now, I have LED bulbs that are pulling 13 watts.

    Part is different approaches, I used to live in a suburban house, when I moved into the city, i got a rowhouse. so, i use less energy to heat and less to cool.

    Now, the economy is big and messy and complex, but at least in California we see that in the data.

    Now if you want to argue the GDP data is garbage, that’s your call, I don’t like GDP as a measure of much, but it’s what we got.

    http://www.investingthesis.com/economics/the-financial-crisis-might-be-over-but-is-the-recession/

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