Social Cost of Carbon: A Case for Energy Storage and Renewables
How do the Current Social Cost of Carbon Methodologies Provide a Skewed Perspective in Evaluating Renewables?
It is no mystery that climate change is the most significant problem our society must overcome. Further, the need to eliminate carbon emissions from the energy sector remains among the most critical components to mitigating the impacts of the climate crisis
However, the collective will to improve sustainability and tackle climate change head-on is not always enough to motivate individuals or organizations. The reality is that many decisions about energy come down to simple dollars and cents. And while the cost of clean energy technologies has fallen dramatically in recent years—allowing renewable energy to become cost competitive or cost advantageous compared to fossil fuels—speeding up the transition to net zero energy would benefit from a more nuanced understanding of costs—the externalities, and the urgency.
When comparing renewable energy to fossil fuels on the basis of cost, we must ask: what about the cost of inaction? What about the costs of accelerating climate change? What about the costs on human health and communities?
And these questions aren’t purely hypothetical—they are real factors being modeled and measured, such as the findings that:
18% of the world’s GDP could be wiped out by climate change by 2050 without proper mitigation (this could happen in many of our lifetimes).
The disastrous California wildfire season (which continues to be come longer, more severe, and more active due to climate trends) created $148 billion worth of damages
The United States experienced 15 disasters in the first nine months of 2022that each caused at least US$1 billion in damage; preliminary property damage from Hurricane Ian ranges from $42 billion to well over $200 billion.
However those costs are externalities, meaning they are paid collectively by society rather than by those responsible for carbon emissions and our warming oceans. To fight this disconnect between cause and effect, though, the concept of the social cost of carbon (SCC) was created and continues to grow in prominence.