By David Flemming
When I heard that David Hill of the Energy Futures Group was scheduled to present its model to Vermont’s Climate Council two months ago, I was skeptical. The Climate Council’s plan, released in December 2021, seemed to rely heavily on a “social cost of carbon” to justify future climate proposals.
While Hill’s presentation justified a few of my priors, it also unearthed an even larger concern. Even with a social cost of carbon estimate triple the scientific consensus, many of the proposals were still so expensive that they could not be justified in terms of an ‘invest money now, see benefits later’ mentality. They will always be net losers, regardless of time frame.
The social cost of carbon is a metric that measures the economic damages that result from emitting one additional ton of carbon dioxide. As a price on CO2 emissions, it is calculated by using models that integrate predictions about future CO2 emissions based on population and economic growth, how the climate will respond to future emissions (e.g. sea levels, rainfall patterns), the impact of these climatic changes on agricultural yields and labor productivity, and future damages.
Here is an example of how the social cost of carbon will be used to analyze the Climate Council proposals this upcoming legislative session. Carbon jet fuel creates financial benefits for Vermonters to the tune of $132/ton of emissions. Multiplying $132 by Vermont’s 0.7 expected tons of CO2 emitted from carbon jet fuel (from 2022- 2050), we find that such benefits are expected to benefit Vermont to the tune of $87 million. Since the Climate Council’s social cost of carbon is $146/ton of emissions on a global scale, we would have to spend the $132/ton that is necessary to prevent these emissions by developing and implementing an alternative jet fuel blend that has less carbon.
If instead, we used the Biden administration’s social cost of carbon of $51/ton, instead of the Climate Council’s $146/ton, implementing this jet fuel blend would not make economic sense. After all, taking $132/ton out of Vermont money to save $51/ton globally would be irrational. Five other questionable proposals would fail Biden’s social cost of carbon justification and pass Climate Council social cost of carbon muster. But these should not distract us from the very worst Climate Council proposals.
Using a social cost of carbon in excess of the scientific consensus does paint a few of the Vermont Climate Council’s programs in a better light. But what is astounding is that many of the Climate Council’s ‘recommended programs’ to the Legislature are predicted to be net losers for the world, (not just Vermont) even after the Climate Council’s excessive social cost of carbon value of $146/ton of emissions is assumed.
While most climate scientists would no doubt prioritize Biden’s social cost of carbon over the Climate Council’s, this disagreement doesn’t matter much in the context of the costliest proposals.
The Climate Council is expected to make six recommendations to the Legislature which have a negative net value to Vermonters, and the world at large — regardless if the Climate Council’s or Biden’s social cost of carbon is used.
These proposals (to be accomplished between 2045 to 2050) include: replacing 80% of natural gas for heat with biogas, mandating that diesel gasoline be composed of 20% biodiesel, reducing vehicle miles traveled 10%, weatherizing 243,000 Vermont homes and replacing 20% of propane/oil boilers with pellet stoves.
So why on earth would the Legislature seriously consider such proposals if the Energy Futures Group model shows they will be terrible investments? Certainly not the loosest pretense of scientific merit. Rather, because Vermont’s Global Warming Solutions Act of 2020 says so.
As Hill told the Climate Council’s Mitigation Committee, “only do(ing) the ones that provide net savings … risks not meeting the (GWSA) requirements.” Those requirements stipulate that Vermont must fall 26% below 2005 emission levels by 2025, 40% below 1990 levels by 2030 and 80% below by 2050. If Vermont fails to meet those requirements, then anyone can sue the state for not moving fast enough on reducing our (lowest in the country) emissions.
If Vermont’s Climate Council and Legislature tandem was interested in becoming a national leader on climate, they would only consider the proposals that are justified by the model they paid for. After all, if they were already planning to pass all proposals anyway, why bother hiring the consultants (with taxpayer money) to build the model? If they want us to suspend our disbelief in using a social cost of carbon well above the leading climate science, fine.
But don’t try to pretend these proposals are ‘scientific,’ if they cannot be remotely tied to the commissioned model for the social cost of carbon. This gives the appearance that our Legislature wants to be seen emotionally involved in combatting climate change without bothering to lay out a framework that other states would consider copying. I really hope that is not the case. There is too much at stake for such grandstanding.
David Flemming is a policy analyst for the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.