Peter Walks for Democracy

As readers know from recent posts, I have been working on an intergovernmental solar power purchase agreement (PPA). It is close to the finish line. Our citizens and taxpayers will be able to celebrate how a coalition of committed public servants assembled a triple win on fiscal responsibility, voter and youth demands for action on climate change, and support for Pennsylvania jobs. 

There is another way to look at the PPA’s value that doesn’t make it into the conversation much: through the social cost of carbon. As the Brookings Institution explains, “The social cost of carbon (SCC) is an estimate of the cost, in dollars, of the damage done by each additional ton of carbon emissions.” The solar PPA helps us avoid those costs by avoiding carbon emissions.

Carbon dioxide and other greenhouse gasses amplify climate change. The more greenhouse gasses we have, the hotter it gets, and the more violent the climate and our weather. Climate change damages human health, communities, infrastructure, agriculture, and ecosystems that we rely on. Some of these will appear in healthcare. NOAA reports, “Adding the 2023 events to the record that began in 1980, the U.S. has sustained 376 weather and climate disasters with the overall damage costs reaching or exceeding $1 billion. The cumulative cost for these 376 events exceeds $2.660 trillion.” This year’s western wildfires and Hurricane Helene have made this blindingly clear. These are just in the United States. 

Globally, the same and worse have happened in recent years. There are protracted migrations and upheaval from floods and drought in the Sahel of Africa. Remember the 2019-2020 bushfires in eastern Australia that were “unprecedented in their extent and intensity, causing a catastrophic loss of habitat, human and animal life.” 

There have been catastrophic floods in Pakistan. All these factors at home and abroad have led the United States Department of Defense to state, “The changing climate is one of many threat multipliers to National Security, which adds complexity to Department of Defense decisions.” That complexity results in time and effort being expended by our military to deal with insecurities directly and indirectly. The SCC provides us with a way to “see” many of these costs.

There is quite a range in the social cost of carbon. Brookings shares the following:

The Obama administration initially estimated the social cost of carbon at $43 a ton globally, while the Trump administration only considered the effects of carbon emissions within the United States, estimating the number to be between $3 and $5 per ton. As it stands, the official estimate from the Biden administration is $51, but in November 2022, the EPA proposed a nearly fourfold increase to $190. 

That Trump number is unserious and disconnected from reality. The Obama number is out of date. The 2022 Biden administration value may also be too low. A 2022 article in the journal Nature places the mean social cost of carbon at $185  per ton, close the Biden administration’s second value. Feel free to dig in. 

Economists like Hank Paulsen and Republican climate hawks like former Congressmen Bob Inglis (South Carolina) and Carlos Curbelo (Florida) have been arguing for a carbon tax for over a decade. Levied at the point of entry into the market on carbon-emitting fuels, a carbon tax inevitably disincentivizes high-carbon energy and transportation and drives consumers toward zero carbon sources, including solar. 

What would, as a 2019 Brookings Institution report puts forward, a $25 per ton carbon tax were levied? The solar power working group avoids emitting about 15,000 tons of carbon dioxide a year. We would avoid $375,000 each year on top of the $350,000 we are already saving in the first year. Using the range in the Biden administration’s assessments from above, the whole group avoids causing between $765,000 and $2,850,000 each year. If that were to become an actual tax, that’s a lot of money. The State College Area School District is about half of that. That’s a lot of money for teachers and students and not a lot of money going into a carbon tax.

Now, it’s possible the utilities, lobbyists, fossil fuel interests, and/or the legislature could craft a sneaky plan. They could pass carbon damages onto non-carbon sources or engineer some other way. They could block solar any number of ways. Sadly, it’s likely and predictable given the actions of the “merchants of doubt.” 

No matter what, we know the solar PPA is already good. Seen in the light of the social cost of carbon, it’s even better. And if a carbon tax arrives, we are ahead of the curve..