Beverley Mitchell

Cutting Carbon Emissions Will Pay for Itself, MIT Study Shows

by , 08/26/14

MIT Carbon Policy study 1

As politicians begin to use economic arguments to support cutting carbon emissions, a new study from MIT has confirmed that the flow-on health benefits of emissions reductions could save billions of dollars. In fact, the researchers found that savings from avoiding emissions-related health problems could recoup the U.S. up to 10.5 times the cost of implementing a cap-and-trade program. The results of this study were published this week in the journal Nature Climate Change.


MIT Carbon Policy study 1

Supported by funding from the Environmental Protection Agency’s Science to Achieve Results program, the study compares savings from health benefits to the economic costs of three different climate policies: a clean-energy standard, a transportation policy, and a cap-and-trade program. The three models were designed to resemble proposed U.S. climate policies, with the clean-energy standard requiring emissions reductions from power plants similar to those proposed in the EPA’s own Clean Power Plan.

Related: Infographic: The World’s Biggest Sources of Greenhouse Gas Emissions

The team paid close attention to how changes in emissions caused by policy translate into improvements in local and regional air quality, using comprehensive models of both the economy and the atmosphere. Significantly, the generalist emissions reduction policy was more cost-effective than industry-specific policies aimed at worst-offender polluters. Study co-author Noelle Selin states, “Carbon-reduction policies significantly improve air quality. In fact, policies aimed at cutting carbon emissions improve air quality by a similar amount as policies specifically targeting air pollution.”

The researchers noted in their abstract, “We find that monetized human health benefits associated with air quality improvements can offset 26–1,050% of the cost of US carbon policies.” The wide-ranging difference was largely due to the differing implementation costs of the policies. A cap-and-trade program at a cost of $14 billion was the most cost-effective policy, achieving health cost savings of 10.5 times that value. A transportation policy with rigid fuel-economy requirements was the most expensive policy, returning benefits of only a quarter of its more than $1 trillion costs (in 2006 dollars). The clean energy standard fell between the costs of the two other policies, with associated health benefit savings of $247 billion versus a cost of $208 billion.

However, as Selin also notes, “While air-pollution benefits can help motivate carbon policies today, these carbon policies are just the first step. To manage climate change, we’ll have to make carbon cuts that go beyond the initial reductions that lead to the largest air-pollution benefits.”

+ MIT

Images by Christine Daniloff and Patrick Gillooly via MIT

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