An extra credit (climate economics) question

  • May 16, 2023
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On the day of the final in my 2000 level environmental and resource economics course, the WSJ published the article on Clean Power Plan 2.0 (Biden Administration Targets Power-Plant Emissions in New Climate Initiative): 

The Biden administration proposed new rules Thursday to drastically reduce greenhouse gases from coal- and gas-fired power plants—measures that will cost billions of dollars but that officials say will curb emissions that are warming the atmosphere and harming human health. …

The EPA proposal incorporates separate standards for different types of plants. The rules for existing coal- and new natural-gas-fired power plants would reduce CO2 emissions by 617 million metric tons. The proposal for existing gas plants would cut 214 million to 407 million metric tons between 2028 and 2042, according to the EPA. Cleaning up power plants would prevent an estimated 300,000 asthma attacks and 1,300 premature deaths in 2030, according to the EPA.

This is something that I’d normally cover in class so I added this extra credit question (note/a): 

Read the WSJ article and, using an estimate of the social cost of carbon, provide an estimate of the climate benefits of the Clean Power Plan 2.0. Write a short paragraph explaining your answer (and note that you could also provide an estimate of the value of reduced mortality with the VSL). 

I received one submission and it is a good one: Bradley Del Vecchio (2026 sustainable technology major) writes:

The Clean Power Plan 2.0 is an awesome step in the right direction to further combine environmentalism and economics, in order to create a more equitable future. According to the estimates provided by the EPA, we could see cuts ranging from 214 to 407 million metric tons of CO2 emissions from 2028 to 2042. Using the most recent estimate of the social cost of carbon at $51 per ton of CO2 or equivalent greenhouse gasses, the proposal could deliver on benefits to our air quality ranging from 10.9 to 20.8 billion dollars over the given time period. Additionally, using the VSL of $11.9 million dollars per life and factoring in the proposals estimated 1,300 premature deaths we could see an additional $15.5 billion in health benefits. This figure does not account for the 300,000 asthma attacks that could be prevented, saving many people and their families from costly medical bills. Overall, the Clean Power Plant 2.0 proposal could provide benefits of $26.4 on the low side and $36.3 billion on the high side from 2028 to 2042. These benefits, when compared to the marginal increase in electric costs, seems like a completely viable proposal both economically and socially.

a/ A successful answer would be used to bump a grade within 1 point to the round up range. For example, I’ll normally round an overall 89.7 average up to a 90 (A-) but a 89.4 is a B+. This would push the 89.4 to an A-.

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