Do We Need a Clean Electricity Standard and CO2 Border Tax to Avert Catastrophe?

Climate ambition is busting out all over in the nation’s capital. The $3.5 trillion budget blueprint approved by Democratic leaders this week includes a “clean electricity standard” (CES). Public utilities would have to cut the market share of fossil fueled electric generation from approximately 59 percent today to 20 percent in 2030 and zero percent in 2035. Democratic leaders are also calling for a CO2 border tax—a tariff on imports based on the carbon dioxide (CO2) emissions associated with their production.

The details of both proposals remain to be worked out. This much is clear. If those policies are enacted, you will pay more to heat and cool your homes, and more for consumer products, components, or materials subject to the border tax. Economy-wide costs could reach hundreds of billions of dollars annually.

What is also clear is that you will not experience any of the alleged climate benefits of those policies. Indeed, under standard Environmental Protection Agency modeling, achieving a net-zero emission economy by 2050—the ostensible goal of the Biden administration’s climate agenda—would avert only 0.137°C of global warming by 2100. That is barely larger than the margin of error for monitoring global average annual temperature. Whether that tiny change 79 years from now would have discernible effects on weather patterns, crop yields, or public health is doubtful. In any case, over the next 30 years, the cooling effects of the CES and border tax would be far too small to detect.

But supposedly it’s all worth it because climate change is an “existential threat.” The New York Times’ article on the border tax nicely sums up the conventional wisdom:

Scientists have warned that the world needs to urgently cut emissions if it has any chance to keep average global temperatures from rising above 1.5 degrees Celsius, or 2.7 degrees Fahrenheit, compared with preindustrial levels. That’s the threshold beyond which experts say the planet will experience catastrophic, irreversible damage.

What is its scientific basis for that claim?

Presumably that’s all explained in the Intergovernmental Panel on Climate Change’s (IPCC) Special Report on Global Warming of 1.5°C. The report contends that all climate change impacts, such as increases in storm intensity, heat waves, extreme precipitation events, flood hazards, and drought risks, are significantly worse in a 2°C warming scenario than in a 1.5°C scenario. But does that mean that the damages are “catastrophic”?

In Chapter 3 of the report—the chapter comparing global warming “impacts” in the 2°C and 1.5°C scenarios—we find this curious statement (p. 256):

Under the no-policy baseline scenario, temperature rises by 3.66°C by 2100, resulting in a global gross domestic product (GDP) loss of 2.6% (5–95% percentile range 0.5– 8.2%), compared with 0.3% (0.1–0.5%) by 2100 under the 1.5°C scenario and 0.5% (0.1–1.0%) in the 2°C scenario.

A “no-policy baseline” leads to 3.66°C of warming, which results in a global GDP loss of 2.6 percent. Catastrophic is not the first word that comes to mind.

Assume the global economy grows by 2 percent annually—a fairly conservative projection. In that case, global GDP increases from $87 trillion in 2019 to $236 trillion in 2100. Even if unchecked warming were to reduce global GDP by 2.6 percent, the world would still be much richer than it is today. A 2.6 percent GDP loss means the average person in 2100 would only be as wealthy as the average person in 2098 if there were no warming at all.

Notice also that in the IPCC assessment, global GDP by 2100 is only 0.2 percent smaller in the 2°C scenario than in the 1.5°C scenario. So, by what stretch of the imagination do people claim that missing the 1.5°C target and allowing an additional 0.5°C of warming is the end of the world?

There are other problems with this narrative. The models used by the IPCC to assess climate change impacts are tuned too hot—they repeatedly overshoot observed warming in the tropical atmosphere. The IPCC’s so-called baseline emission scenario (RCP8.5) is actually a worst-case scenario. It implausibly assumes that, absent climate policies, coal consumption will increase six-fold between 2000 and 2100, recapturing market shares not seen since 1940.

Seeking illumination, I twice emailed the lead and coordinating lead authors of Chapter 3 of the IPCC’s 1.5°C Report. Not wanting to be confrontational, I simply inquired about what GDP baseline the IPCC used to estimate a 2.6 percent GDP loss in 2100 due to a temperature rise of 3.66°C. My purpose was to put things in perspective. In the IPCC’s projection, how much larger than present is the global economy in 2100 after unchecked warming decreases it by 2.6 percent? They did not reply.

I shared this information with the New York Times climate reporter, suggesting that the IPCC might be more responsive to the same inquiry if it came from her.