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Report: Social Cost of Carbon Has Been Drastically Underestimated

Rising temperatures and more atmospheric carbon dioxide cause rice fields to yield less and release more methane. Shutterstock

Our understanding of the social cost of carbon (SCC) relied on outdated science from the 1980s, and is likely wrong.

The latest calculations based on new modeling by UCLA and Purdue University show a drastic divergence with previous results—an increase of 129 percent, which moves the figure to $19.70 per ton of carbon dioxide. This calculation rests on the Climate Framework for Uncertainty, Negotiation and Distribution, or FUND model.


"The underlying studies date back to publications in the 1990s, but it really dates back to science from the 1980s," said Thomas Hertel, distinguished professor of agricultural economics at Purdue.

Created in the early 1980s as a response to former President Reagan's call for cost-benefit analyses on regulatory actions, the SCC became the carbon dioxide yardstick of U.S. federal agencies. The SCC measures the economic impacts, in dollar value, for the emission of one ton of carbon dioxide into the atmosphere in a given year.

The latest calculations show that the FUND model failed to properly incorporate the damage of carbon emission-produced rising temperatures to the agriculture sector. Rather, the model treats agriculture as a carbon beneficiary.

"The very early studies tended to show that the effects of warmer temperatures were not very severe and would be more than compensated by the beneficial effects of higher carbon dioxide concentrations," said Frances Moore, assistant professor of environmental science and policy at UC Davis and lead author of the study.

The FUND model wrongly showed that carbon's damage to agriculture was -$2.70—that is to say, each ton of carbon gave an overall boost of $2.70 to the agriculture sector. This latest research refutes that. The new data shows carbon damages the economy by $8.50 per ton.

The FUND model is just one of three models currently used by the U.S. to calculate SCC values. Each of these models, the FUND, DICE and PAGE holds equal weight in final SCC values. When the multiple models are placed together, SCC moves into the range of $40 per ton.

"This large proportional increase in the SCC is particularly noticeable because we are only updating damages from one economic sector. The SCC in this model is determined by damages in 14 different sectors," Moore said. "The fact that updating just one sector has such a large effect on the overall SCC is striking."

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"Today's verdict reinforces what another jury found last year, and what scientists with the state of California and the World Health Organization have concluded: Glyphosate causes cancer in people," Environmental Working Group President Ken Cook said in a statement. "As similar lawsuits mount, the evidence will grow that Roundup is not safe, and that the company has tried to cover it up."

Judge Vince Chhabria has split Hardeman's trial into two phases. The first, decided Tuesday, focused exclusively on whether or not Roundup use caused the plaintiff's cancer. The second, to begin Wednesday, will assess if Bayer is liable for damages.

"We are disappointed with the jury's initial decision, but we continue to believe firmly that the science confirms glyphosate-based herbicides do not cause cancer," Bayer spokesman Dan Childs said in a statement reported by The Guardian. "We are confident the evidence in phase two will show that Monsanto's conduct has been appropriate and the company should not be liable for Mr. Hardeman's cancer."

Some legal experts said that Chhabria's decision to split the trial was beneficial to Bayer, Reuters reported. The company had complained that the jury in Johnson's case had been distracted by the lawyers' claims that Monsanto had sought to mislead scientists and the public about Roundup's safety.

However, a remark made by Chhabria during the trial and reported by The Guardian was blatantly critical of the company.

"Although the evidence that Roundup causes cancer is quite equivocal, there is strong evidence from which a jury could conclude that Monsanto does not particularly care whether its product is in fact giving people cancer, focusing instead on manipulating public opinion and undermining anyone who raises genuine and legitimate concerns about the issue," he said.

Many regulatory bodies, including the U.S. Environmental Protection Agency, have ruled that glyphosate is safe for humans, but the World Health Organization's International Agency for Research on Cancer found it was "probably carcinogenic to humans" in 2015. A university study earlier this year found that glyphosate use increased cancer risk by as much as 41 percent.

Hardeman's lawyers Jennifer Moore and Aimee Wagstaff said they would now reveal Monsanto's efforts to mislead the public about the safety of its product.

"Now we can focus on the evidence that Monsanto has not taken a responsible, objective approach to the safety of Roundup," they wrote in a statement reported by The Guardian.

Hardeman's case is considered a "bellwether" trial for the more than 760 glyphosate cases Chhabria is hearing. In total, there are around 11,200 such lawsuits pending in the U.S., according to Reuters.

University of Richmond law professor Carl Tobias told Reuters that Tuesday's decision showed that the verdict in Johnson's case was not "an aberration," and could possibly predict how future juries in the thousands of pending cases would respond.