Study: Cleaner air offsets costs of climate policy

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As the ultimate fate of health care reform [2] is debated while key senators continue to push for a climate bill this year [3], an important new study released last week highlights the connection between strong climate policy and public health [4]:

The benefits of improved air quality resulting from climate change mitigation policies are likely to outweigh the near-term costs of implementing those policies, according to a new study.

Coming on the heels of the international climate talks in Copenhagen and a proposal earlier this month by the U.S. Environmental Protection Agency to tighten smog standards, new research from the University of Wisconsin-Madison suggests that climate change policies should be assessed on the basis of potential benefits as well as initial costs.

The study, published in the Environmental Research Letters [5] scholarly journal, reports that the value of "co-benefits" -- especially improved public health due to better air quality -- rarely factors into assessments of climate change policy. In other words, policymakers focus on the projected "costs" of strong climate policy without taking into account the benefits of avoiding the projected costs of inaction on climate. The researchers estimated an average benefit of $50 dollars per ton of carbon pollution avoided, which far outweighs the estimated cost of carbon mitigation of less than $30/ton. One of the researchers declared that we could offset all the costs of climate policy within ten years through its benefits, including improved quality of life and healthier, longer lives.

This is a point that we've made repeatedly on our blog -- most eloquently through the guest posts of economist Kristen Sheeran [6] of the E3 Network, who addressed the claims of climate policy cost alarmists last year:

The critiques of the model they use to produce their results are extensive and well-known to most economists. In short, it amounts to the following. First, they start with the assumption that the economy functions optimally, with all capital, labor, and energy fully and efficiently employed. By definition, then, any change in the economy brought by climate policy would yield a sub-optimal outcome. Second, the model captures none of the benefits of mitigating emissions, such as reducing coal use or lowering the risks of climate change related damages. Finally, they assume no change in technology or performance as a result of the policy, meaning that our options for reducing emissions stay the same, rather than improve, over time. [Emphasis added]

The study also makes the connection between climate policy and air quality policy, and makes the case that they should really be treated as one (unlike now, when Congress handles climate while the EPA regulates air pollutants) given that usually the sources of CO2 and air pollutants like sulfur dioxide are one and the same. This connection makes the preservation of our ability to regulate greenhouse gases under the Clean Air Act all the more critical because regulating carbon is as much a public health issue as regulating other air pollutants. So far we've successfully batted down [7] Senator Murkowski's assault on the Clean Air Act (thanks in part to many Senate climate champs [8]) but the battle is far from over.