If only the UK Government bothered to factor in the true cost of carbon, then they would not be pushing the ‘dash for gas’ and ‘fracking’.
The Obama administration just made a fairly significant move on climate change, and it flew right under the radar.
To explain, let me back up a bit.
How much damage does a ton of carbon emissions do? That dollar figure is known as the “social cost of carbon” and it is, as economist Frank Ackerman put it a few yeas ago, “the most important number you’ve never heard of.”
Why does it matter? Because the U.S. government uses it to assess the costs and benefits of regulatory action. The higher the social cost of carbon, the more action can be economically justified.
Specifically, regulations are assessed by the White House Office of Management and Budget (OMB). (There are reasons to lament that process, but put them aside for now.) The OMB runs cost-benefit analysis on every big regulation that issues from the executive branch.
One thing Obama doesn’t get…
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