Pondering Our Future: The Social Cost of Carbon and Climate Tipping Points

Vincent Ialenti is an anthropologist who studies how current societies relate to those yet to be born. Imagining the world of the future and the impact we make on it in the present is a worthwhile exercise when determining steps to take for the short and long term that will leave a worthy legacy for those who follow us. In a recent article, Ialenti wrote for Scientific American, he states:

“Stretching the mind across time—even in the most speculative ways—can help us become more responsible planetary stewards: It can help endow us with the time literacy necessary for tackling long-term challenges such as biodiversity loss, microplastics accumulation, climate change, antibiotic resistance, asteroid impacts, sustainable urban planning, and more.”

Ialenti worked on a 32-month study for Finland’s nuclear industry which was building a waste disposal facility some 450 metres below the seabed in the Gulf of Bothnia. The waste being disposed of included Uranium 235 with a half-life of 700 million years. The questions being asked included:

What could potentially disturb this nuclear waste site, not ten thousand, or one hundred thousand, but millions of years into the future?

What changes to the waste site could occur from climate, continental shifts, earthquakes, and other geological events during the eons of time that would pass and what would be the impact on human, animal, and plant populations?

An exercise of this scope, Ialenti says fosters “empathy across generations.”

We don’t have to look so far into the future to develop responsible policies that lead to positive outcomes for future generations. Climate change is not a consequence for us hundreds of millions of years into the future. But it is of consequence to those who follow us for millennia.

Today, we are dealing with the latest news from the IPCC that points to a “code red” moment for humanity and the planet. Climate scientists are telling us we are reaching a point where the goals set by the Paris Climate Agreement are no longer attainable; that we will blow past an atmospheric temperature rise of 1.5 Celsius (2.7 Fahrenheit) well before 2050, even possibly by the end of this decade. In addition, we will have set off environmental tipping points that will bequeath to those who follow us, a much different and less desirable world. Some of these consequences will last multiple generations if not thousands of years into the future.

A research article published in the Proceedings of the National Academy of Sciences of the United States of America (PNAS) this week, is entitled “Economic Impacts of Tipping Points in the Climate System.” It is authored by researchers at the London School of Economics, the University of Delaware, and New York University, and points out that we are still infants when it comes to understanding the consequences of climate change inaction. The authors have attempted to synthesize the literature around eight climate tipping points, looking at near-future economic and social impacts. In their analysis they attempt to establish a social cost of carbon (SCC) while providing unified estimates of the economic impact from eight climate change tipping points:

• rising atmospheric and ocean temperatures
• rising sea levels
• thawing permafrost
• ice sheet disintegration
• changes to atmospheric and ocean circulation
• melting of ocean methane hydrates
• dieback of the Amazon rainforest
• collapse of the annual monsoon

The research reviews 21 articles in the literature with coverage over180 countries. It notes that there is no one assessment model to determine the SCC and that the consequences of the tipping points described above have not been fully researched from an economic impact perspective. Collectively, however, the research concludes that tipping points are likely to more than double global economic and societal risk.

The SCC calculation the researchers are using is based on the economic impact of each additional ton of carbon dioxide (CO2) emitted into the atmosphere over and above what is already present. The combination of these eight tipping points, they conclude, is expected to increase SCC by 24.5% over existing carbon pricing modelling, not including two wildcards, melting permafrost methane (CH4) release in the Arctic, and large-scale release of the same from melting hydrates on the ocean floor. These latter two, the study estimates, could add an additional 10% to the SCC. The authors see this research as a good starting point for determining a true cost for carbon pollution for the purpose of policy development.

The authors conclude that the economic impact of climate tipping points poses an increase in the level of risk for the entire global economy along with a high social cost. It also puts financial markets further at risk because of higher unanticipated and difficult to calculate economic costs.

Planners of climate policy take note. Using market mechanisms, such as pricing carbon pollution and carbon exchanges to combat climate change, need to consider tipping point impacts.

Around the world today we have examples of SCC pricing:

• In Canada, the current price for carbon pollution is $40 CDN (approximately $32 US based on the current exchange rate) per ton. In 2022 it rises to $50, and then increases $15 annually until 2030 when it will be $170 per ton.
• In the United States, the Citizens’ Climate Lobby, a grassroots organization, is attempting to get Congress to pass a bill that sets a starting SCC price of $15 US per ton, rising by $10 per year. So far, and based on the current Biden administration’s negative response to pricing carbon, there is little guarantee of success.
• In China, the world’s largest carbon emitter, it recently launched a nationwide carbon exchange with an initial price for carbon emission allowances at about $7.50 US per ton.
• In the European Union, the current benchmark price on their carbon exchange is 53 Euros per ton. This is expected to rise to more than double by 2030.

You can bet, in all of these pricing determinations, none have considered climate tipping points in coming up with their SCC. And in each policy decision, the attempt to be responsible planetary stewards seems wanting. Our current leadership has yet to exhibit the empathy across generations Ialenti describes. What that means for humanity and the planet’s future is consequential and frightening.