In a new piece for Forbes, the University of Chicago’s Amir Jina tries to argue that, because the so-called “Social Cost of Carbon” was $200 billion in 2015, the fossil fuel industry received an effective “hidden subsidy” of $200 billion.
Jina’s argument can be summed up with this paragraph:
The U.S. emitted 5.4 billion tons of carbon dioxide in 2015, with a cost per ton of $36 (the current Social Cost of Carbon). That means the U.S. is paying $200 billion to cover the costs of all the emissions being burned. In effect, it’s a $200 billion hidden subsidy to the fossil fuel industry. This $200 billion is a cost in real money—in lost labor productivity, healthcare costs, increased energy expenditures, coastal damages—that is paid somewhere in the world for each ton of carbon dioxide that is emitted.
Sounds scary. As the Cato Institute notes, though, the Social Cost of Carbon (SCC) figure is not as precise as it seems:
Existing estimates [of SCC] are based not on testable (let alone tested) economic models of how changes in climate generate economic costs, but on conjecture, guesswork, and sometimes simply by asking “experts”—the people who construct SCC estimates—what they think the damages from climate change might be.
In fact, a closer look at the EPA’s SCC “Fact Sheet” notes that their current model estimates cost of carbon out to the year 2300. In other words, the EPA is estimating how much energy use will cost the U.S. more than 280 years from now.
Jina notes, in his Forbes piece, that subsidies for so-called “clean energy” are supposed to “even out this playing field.” What he fails to mention is that renewable energy, as it stands today, is reliant on fossil fuels for both production and as a backup source of energy. So “clean” energy contributes to carbon emissions, too.
Perhaps Jina’s rigid stance against American oil and gas – and for so-called “clean” energy – can be explained by his past work. His University of Chicago bio notes he worked on an “independent assessment,” funded by none other than billionaire liberal Tom Steyer.