The term ‘social cost of carbon’ is used by governments to measure the economic impact of releasing more carbon dioxide into the environment. The task of calculating the ‘social cost of carbon’ is extremely complex. In simple terms, economists must predict future population growth and future emission levels, determine how these factors will affect global temperatures. And then ask the question, how will a rise in global temperatures affect the world’s economy?
The current administration estimates that for every ton of carbon dioxide released, the economic cost is between $1 and $7, far less than the $50 forecast by the Obama administration.
So why the huge difference? Currently the calculations are based solely on US emissions. And the cost to future generations has also not been considered. Many experts are pointing out significant flaws in this new method. Climate change is a global, multi-generational problem. Ignoring the rest of the world and the future generations living in it, does not accurately measure the problem.
However, if the current administration can successfully move forward with their plans, keeping the social cost of carbon to a minimum, it’ll be easier to justify loosening the laws surrounding current emission levels. It’s a move that environmentalists are calling a major step backwards in the battle against global warning.
But all is not lost for the environmentalists just yet. All plans put forward by the current administration will undergo intense scrutiny by the courts before any changes can be implemented. And its not just the US judiciary keeping a close eye on the proposed changes. The rest of the world will be watching too.