May 3, 2010
Contact: Tom Steinfeldt, 703-516-4146
Pew Center on Global Climate Change Releases Report Assessing
the Benefits of Avoided Climate Change
Workshop Proceedings Suggest Risk-Management Approach
Washington, D.C. – There is now wide recognition that emissions of greenhouse gases are changing the global climate in ways that are largely harmful. In response, policymakers across the U.S. government are beginning to consider what actions should be taken to limit climate change damages.
An important tool used in making such policy choices is cost-benefit analysis (CBA). But this technique has been widely criticized as inadequate as the primary approach to valuing the impacts of climate change.
Motivated by recent attempts by government agencies to account for the benefits of reduced greenhouse gas emissions in rulemaking, the Pew Center on Global Climate Change held an expert workshop to examine the current state of the art, limitations, and future development needs for analyzing the benefits of avoided climate change. Approximately 80 experts from academe, nongovernmental organizations, and the federal government attended.
“The benefits of avoided climate change are substantial, but too often they are underestimated or ignored,” said Eileen Claussen, President of the Pew Center on Global Climate Change. “Incorporating the risks of inaction into our assessments of greenhouse gas reduction benefits will give us a more accurate view of the benefits of acting. These proceedings help identify practical steps forward to provide policy makers with more sound estimates of the benefits of climate action.
The main objectives of the workshop were to inform the development of a set of practical recommendations that decision makers could employ in the near term and to outline new approaches to improve decision-making tools over time. Based on the outcome of the workshop, the Pew Center submitted recommendations on the appropriate use of cost-benefit analysis to the Office of Management and Budget during its 100-day review of its own role in regulatory review. These recommendations are available on the Pew Center’s web site: http://www.c2es.org/docUploads/Pew-Recommendations-OMB.pdf.
Many participants agreed that estimates of the social cost of carbon (i.e. benefits estimates used in CBA) are systematically biased low and require significant improvement. However, with such improvements, and with appropriate discounting, CBA can be an appropriate tool for incorporating the societal benefits of reduced greenhouse gas emissions into individual policies, such as CAFE standards, that would reduce greenhouse gas emissions incrementally.
A major focus of the workshop was the inadequacy of traditional analytical tools, such as CBA, for guiding policy decisions about non-incremental changes in economy-wide greenhouse gas emissions. Many participants recommended a risk-management approach that views climate stabilization as insurance against uncertain but intolerable outcomes.
The workshop report contains an extended summary of 17 presentations and the full text of nine background papers by experts in climate science and economics. Please visit http://www.c2es.org/events/2009/benefitsworkshop to access the full contents of the workshop proceedings, including video of expert presentations and free downloads of the workshop summaries and background papers.
For more information about global climate change and the activities of the Pew Center, visit http://www.c2es.org.
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The Pew Center was established in May 1998 as a non-profit, non-partisan, and independent organization dedicated to providing credible information, straight answers, and innovative solutions in the effort to address global climate change. The Pew Center is led by Eileen Claussen, the former U.S. Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs.