Uncle Sam‘s estimate of the damage caused by each ton of carbon dioxide is fundamentally flawed and “grossly understates” the potential impacts of climate change, according to an analysis released July 12 by a group of economists.
The study found the true cost of those emissions to be far beyond the $21 per ton derived by the federal government.
The figure, commonly known as the “social cost of carbon,” is used by federal agencies when weighing the costs and benefits of emissions-cutting regulations, such as air conditioner efficiency standards and greenhouse gas emissions limits for light trucks.
A truer value, according the Economics for Equity and the Environment Network, an umbrella organization of economists who advocate for environmental protection, could be as high as $900 per ton—equivalent to adding $9 to each gallon of gas. Viewed another way, with the U.S. emitting the equivalent of close to 6 billion tons of carbon dioxide annually, the higher figure suggests that avoiding those emissions could save the nation $5.3 trillion annually, one-third of the nation’s economic output.