US government 'has pollution costs wrong'

Posted by Emma Woollacott

The federal government is significantly underestimating the costs of carbon pollution because it's using a faulty analytical model, say scientists from the Natural Resources Defense Council and the University of Cambridge.

And accounting more accurately could pave the way to cleaner, more economically efficient sources of power generation, they say.

"This is a wake-up call for America to start aggressively investing in low carbon sources of energy. The very real economic benefits will accrue quickly and increase over time," says Dr Laurie Johnson, chief economist in the climate and clean air program at the Natural Resources Defense Council.

“With approximately 40 percent of all carbon emissions in the US coming from power plants, the economic advantages of clean electricity sources are significant."

The team says the model used by the government is incomplete, as it barely acknowledges the economic damage that climate change will inflict on future generations.

The real benefits of carbon reduction, they say, range from 2.6 to more than 12 times higher than the government’s estimate.

"It turns out that the price we now pay for energy is much higher than what shows up on our electric bills or the tab at the gas pump," says Johnson.

And the new estimates have implications for policy. Under the existing accounting, natural gas appears to be the cheapest generation option for new power plants.

However, the new figures show that, after incorporating the economic costs of carbon and other pollutants from fossil fuel generation, building new generation using wind and solar power would be more cost-effective than either natural gas or coal.

There would be even greater gains from replacing existing coal plants with new wind and solar photovoltaic, or with new fossil fuel generation that has carbon capture and storage technology, they say.