New York seems determined to challenge California for the title of green energy “leader,” regardless of what doing so costs residents. The state Department of Environmental Conservation (DEC) is reportedly “considering” (read: almost certainly will adopt) rules that will be used to justify more forced electrification and higher energy costs for New Yorkers.
The DEC intends to accomplish this using new estimates of the “social cost of carbon” (SCC). The SCC is a made-up number, calculated using simplistic models that assume a one-to-one relationship between carbon emissions and global temperature. After estimating how much carbon dioxide will get released into the atmosphere and the resulting temperature increases, the models project the resulting environmental doom and its costs: rising seas that will flood coastal cities and sink island nations, the expansion of virulent tropical diseases into colder climates, and megadroughts leading to crop losses.
The SCC is used to calculate the dollar benefits of greenhouse gas emissions reductions associated with numerous policies. For example, the cost-benefit analysis accompanying the EPA’s Mercury and Air Toxics Standards (MATS) rule reveals that the estimated monetary benefits from mercury reductions are small; the overwhelming majority of benefits come from carbon emissions reductions that are valued using the SCC. Hence, the higher direct costs associated with complying with the MATS rule and other environmental regulations, which are ultimately borne by consumers, are dwarfed by the estimated benefits associated with greenhouse gas reductions. To obtain higher SCC estimates, the EPA uses two tricks. First, the new models forecast environmental horrors and their associated costs for the next 300 years. Previously, EPA forecasts extended out only to a century. Second, the EPA lowered its “discount rate”—a financial tool that helps measure the difference in present value between money received today and money received in the future—to increase the relative importance of the environmental horrors predicted to occur over the next 300 years.
Forecasting costs three centuries into the future is fodder for science fiction writers, not policymakers. Imagine someone in the year 1724 predicting the technologies and economic realities of today. George Washington wouldn’t be born for another eight years, the Declaration of Independence was a half-century away, and the Knickerbocker Base Ball Club wouldn’t write down its rules for the game for another 120 years. Could anyone in 1724 have imagined automobiles, airplanes, televisions, or smartphones? How about atomic bombs, integrated circuits, or scientific probes orbiting Jupiter? We are just as ignorant of what the future will bring even 100 years from now, much less 300.
The true purpose of the SCC is to press a green thumb on the cost-benefit scale for energy technologies. Using the EPA’s new SCC value of $190 per metric ton in 2020 (it increases over time, reaching $310 per ton in 2050), almost any green energy project or policy—high-cost offshore wind contracts, the forced elimination of natural gas for heating and hot water, electric vehicle mandates—is easy to justify; increasing the SCC will make even bigger boondoggles seem economical. The dollar “benefits” of avoided carbon emissions will dwarf the higher costs that New Yorkers will be forced to pay, even though few of the alleged benefits will accrue to New Yorkers themselves.
Though the DEC claims it is only seeking “feedback” on its proposal to adopt higher SCC values, you can bet that the only input it will consider will come from environmental radicals who glue themselves to priceless works of art and the politically connected green advocates who stand to reap billions of dollars from the new rules.
Ordinary New Yorkers will get nothing.
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