The Social Cost of Methane Emily Wimberger Chief

Transcript:The Social Cost of Methane Emily Wimberger Chief:
The Social Cost of Methane Emily Wimberger Chief Economist California air Resources Board California Air Resources Board 1 Social Cost of Greenhouse Gases Since 2008, federal agencies have been incorporating the social cost of GHGs including carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O) into regulatory impact assessment U.S. EPA Department of Transportation Department of Energy In 2009, the Interagency Working Group (IWG) was convened to develop a methodology for estimating the social cost of carbon (SCC) Standardized assumptions Based on estimates from three Integrated Assessment Models (IAMs) California Air Resources Board 2 Social Cost of Methane The social cost of methane (SCM) for a given year is an estimate, in dollars, of the present discounted value of future damage caused by a one metric ton increase in CH4 emissions into the atmosphere in that year, or equivalently, the benefits of reducing CH4 emissions by the same amount in that year. Provides a comprehensive measure of the net damages – the monetized value of net impacts from global climate change that result from an additional ton of CH4 Damages include Changes in net agricultural productivity Energy use Human health Property damage from increased flood risk Water availability Costal communities Biodiversity California Air Resources Board 3 SCM Details IAMs estimate the environmental damages from a given year in the future and discount the value of the damages back to the present Increases over time as systems become stressed Highly sensitive to discount rates The value placed on future environmental damages Higher rate discounts the value placed on future damages IWG standardized range from 2.5% to 5% California Air Resources Board 4 Social Cost of Methane (2007$ per tonne) California Air Resources Board 5 Social Cost of Carbon (2007$ per tonne) California Air Resources Board 6 AB 197 Consider the social costs of the emissions of greenhouse gases Consider the cost-effectiveness, including avoided social costs, of measures in the Scoping Plan Defines social costs as “an estimate of the economic damages, including but not limited to, changes in net agricultural productivity; impacts to public health; climate adaptation impacts, such as property damages from increased flood risk; and changes in energy system costs, per metric ton of greenhouse gas emissions per year” California Air Resources Board 7 Federal Action on Social Costs Withdrew reports related to social cost of greenhouse gases Revised estimates of the social cost of greenhouse gases Federal valuation