Study: Carbon Benefits Outweigh Costs (If You Don’t Count End of Humanity…Maybe Even If You Do)
The report, titled “The Social Costs of Carbon? No, The Social Benefits Of Carbon,” highlights a forecasted decline in oil demand in the world’s energy market.
Economist Roger Bezdek is the lead author of a report that predicts that coal is on track to replace oil as the world’s main energy source. Bezdek is the founder and president of Management Information Services, Inc., a Washington, D.C.-based economic and energy research firm. He is also a former Director of Energy Research and Development Administration at the U.S. Department of Energy.
Bezdek’s report is a response to publications issued by the Environmental Protection Agency in 2010 and 2013 that have estimated the social costs of carbon.
The EPA says we needed to reduce carbon emissions in order to protect long term public health. Since burning coal and other fossil fuels emits carbon dioxide The Obama Administration and the EPA has been working to reduce emissions by creating tax incentives for fuel efficient vehicles, and enforcing regulations on coal fired power plants.
“They’re trying to use these estimated costs of carbon in proposed regulation and rulemaking,” Bezdek says. “There’s a federal law that says to do this you have to do a valid cost-benefit analysis.”
That’s exactly what this report sets out to do—determine the BENEFITS of carbon. His findings in a nutshell: the social benefits of carbon outweigh the EPA’s estimated costs by orders of magnitude from anywhere from 50 to 1, to 500 to 1.
“There are people at the EPA and also inside and outside the government who are obsessed with trying to reduce the use of fossil fuels, and reduce production of carbon dioxide as if this is going to cause some sort of huge economic and social, environmental disasters. That’s highly questionable," Bezdek says.
Bezdek's study quotes one expert (Robert Pindyck) that go as far as saying current models that forecast social cost of carbon are “close to useless.” The report also says those models are, “completely ad hoc, with no theoretical or empirical foundation.”
In fact, there’s a section of the report that talks about the benefit of Carbon Dioxide in the biosphere. According to the report, CO2 has increased along with the global human population. Since plants grow better with more CO2, they are more apt to be able to nutritionally support that exploding population.
“There are some direct benefits of carbon dioxide. It assists in agricultural productivity and plant growth. But the overwhelming benefits come from the fossil fuels that generate carbon dioxide. Fossil fuels have created the modern world and sustain it in terms of technology, standard of living, economics, GDP, etcetera. And all the forecasts for the foreseeable future of the next several decades indicate that in excess of 80 percent of the world’s energy will continue to be supplied by fossil fuels," Bezdek says.
To reach his economic findings Bezdek’s team looked at the past, present, and projected future benefits of fossil fuel utilization. He says by 2030 world population is forecast to reach 8.3 billion, and thus an additional 1.3 billion people will require access to energy. And when it comes to supplying that energy, his report finds that coal will be leading the way.
“Fossil fuels are essential for a decent quality of life," Bezdek says. "Try going back and living in the 15th or 14th centuries if you want to live without fossil fuel utilization—without the benefits of industrialization."
"And those [electrical benefits] are exactly the kinds of things that people in the 3rd world are desperate for to improve not only their standard of living, but their health and their well-being,” he adds.
Despite new advances in RENEWABLE energy technologies Bezdek estimates that transitioning away from fossil fuels just won’t be financially viable.
Bezdaz says that federal law prevents policy changes without a valid social costs/benefits analysis. And according to this report, the fossil-fuel path we’re on is good for everyone, since we’re all using fossil fuels already, and the benefits of that dependency are undeniable.
Bezdak says the caveat of his report is that it’s based on the given estimated social costs published by the EPA—estimations which he reiterates are based on limited data.
“These eminent analysts and economists and scientists have concluded that the estimates are essentially worthless for policy purposes,” Bezdek says.
Therefore, he says, instead of the benefits outweighing the costs of using fossil fuels such as coal 500-1, it may be more like 1000-1.
Meanwhile, the EPA also admits that their estimates are based on limited data and that they “do not currently include all of the important physical, ecological, and economic impacts of climate change recognized in the climate change literature because of a lack of precise information on the nature of damages.” As such they say it’s likely their approximations are underestimates.
Editor's Note: West Virginia Public Broadcasting reached out to other economists, policy think-tanks, and professors of environmental science for a reaction to this report but, no response was given.