Valuing the Greenland ice sheet and other complex geophysical phenomena

Abstract

For the last 40 y, economists have worked to put monetary values on environmental amenities to facilitate the cost–benefit analysis (CBA) of alternative policies (1⇓–3). The motivation is simple: Policy choices inevitably require trade-offs. Resources devoted to climate change mitigation are resources not spent on curing diseases, improving education, alleviating poverty, or providing for national defense, not to mention enjoying private comforts and consumption. It is natural to hold governments and public policies accountable for ensuring that these trade-offs make sense in a transparent way, which is the essence of CBA. A key feature in CBA related to climate change mitigation is the social cost of carbon (SCC), the dollar value associated with avoided damages from each ton of reduced carbon dioxide emissions. The SCC multiplied by total tons of CO2 reduced by a given policy determines benefits; subtracting policy costs yields an estimate of net benefits. These net benefits can be compared across policies or even among various arenas of government activity to make choices and prioritize action. In PNAS, Nordhaus (4) examines the effect of including Greenland ice sheet (GIS) melt in estimates of the SCC. This responds to the common-sense concern that a largely irreversible and complete melting of the GIS would raise mean sea level by 7 m and inundate many of the world’s population centers. It also responds directly to one of the recommendations in a recent consensus study report of the National Academy of Sciences, Engineering, and Medicine (recommendation 4-3 of ref. 5) that a sea-level rise (SLR) component be included in the SCC modeling. More generally, Nordhaus (4) demonstrates how complex geophysical phenomena can be integrated with an economic … [↵][1]1Email: william.pizer{at}duke.edu. [1]: #xref-corresp-1-1