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Door: Rob van der Rijt, 19 May 2016


The social costs of climate change

What does it actually cost us when a ton of the greenhouse gas CO2 is emitted into the air? What factors determine that and how could you charge the contributor for those costs? And how much are you actually willing to pay for your impact on climate change?

To produce a ton of CO2 is not so difficult. Drive 4,700 kilometres in a diesel car, fly 5,000 kilometres or consume 1,900 kilowatt hour of grey power. An average Dutch household emits 8 tons of CO2 per annum as a result of direct use of fossil fuels (for electricity, gas and transport).

The polluter does not pay

Nobody pays a realistic price for the consequences of CO2 emissions on our climate. No household receives an invoice annually stating the climate cost of their fossil energy consumption. We do pay for the collection and processing of our litter; we all place our waste paper at the curb and throw our empty glass in containers. But to pay directly for causing CO2 emissions does not yet exist. Even though climate change is seen as one of the most urgent social problems by the average Dutch.

What does a ton of CO2 cost?

What does causing a ton of CO2 cost? Several calculations have been made to answer that question. The market itself has tried to create a realistic price by using the European CO2 emissions trading scheme for example. At the start they targeted at a workable price of € 30, – per ton, but because of the recession and a surplus of CO2 rights that price is now somewhere around € 5, – per ton of CO2. That price is currently no incentive to move to a low-CO2 economy. Furthermore, this trading scheme applies only to a limited number of major polluters.

The objective of a price on CO2

The objective of putting a price on CO2 emissions is that it helps to discourage the use of fossil fuels. But if you really want to do well, then that price should include the cost of air and water pollution (through acidification), damage to nature and biodiversity and damage to property, agricultural yields and health costs. And you should also look to start a piggy bank for the care of hundreds of thousands of climate refugees we may expect in Europe over the next few decades.

Social costs of climate change

The Obama administration has made a calculation of ‘The social cost of carbon’ and established a price of $ 37, – per ton of CO2. However, that price has been criticized from various sides because not all costs had been included and neither would it sufficiently take into consideration the downturn in the economy because of climate change. Research from Stanford University estimated that a price of $ 220, – per ton of CO2 would cover the costs better. The UK uses an average cost of $ 83 per ton and Dutch climate experts plead for a price of € 90 to € 100, – per ton of CO2.

Are you going to contribute?

In order to reach the climate targets that have been agreed on in Paris late 2015 people will have to make significantly less use of fossil fuels. A direct price on CO2 emissions will contribute to this because it makes sustainable alternatives financially attractive. The fact that social damage costs of these emissions will be taken into the equation is a logical step.

The polluter can pay quite simply for his pollution by creating a CO2 tax. Anyone who uses fossil fuels is going to pay for the negative climate and health effects. When you use grey electricity, gas or diesel, or if you go on a long flight then you will pay for the pollution you cause. A logical step that is also easy to implement because every fossil fuel has its own CO2 emission factor. Multiply that with a sum of money and you have a CO2 tax.

Read more about the ten benefits of a CO2 tax. And if you want to know how many CO2 emissions your household or organization causes, then calculate it with our free CO2 calculator.

I’m very curious about what amount of money you’re willing to pay per ton of CO2 and your reason for it? Tweet us at @CarbonFootMgmt

Foto: Kwest/Shutterstock.com

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