TRANSCRIPT
Katherine Gorman: (00:02)
You are listening to Climate Now. I’m Katherine Gorman.
James Lawler:
And I’m James Lawler.
Katherine Gorman:
So James, one of the tropes that I think we see a lot in the public conversation, and maybe it’s a cliche at this point, around climate change is that sort of terrible imagery of watching sea ice break off and crash into the sea. And it’s just like, so sort of dire and maybe like a little Wagnerian. So let’s talk about that. Like sea level rise.
James Lawler: (00:29)
Yeah. It’s one of the aspects or dimensions of climate change that the public has connected with because it’s so clear, like a rising ocean does damage to coastal property and make storm surges all the worse. So it’s something that the public has really caught on to, but what’s less well understood is how exactly those dynamics work. And the fact, for instance, that global average sea level is different from the effects that might happen on a local level, which is harder to understand. So there are all these interesting dimensions to the rising ocean that we have to explore, and we have to understand better and here to talk with us about it today is Dr. Bob Kopp, who is a climate scientist at Rutgers University, the Director of Rutgers Institute of Earth, Ocean, and Atmospheric Sciences, and a Director of the Climate Impact Lab. Bob, let’s start with an easy question. How did you get to where you are today?
Bob Kopp: (01:11)
Well, I mean, I sort of ended up as a climate scientist by a rather long arc. I started out as an undergraduate wanting to study life on Mars. So I sort of did. I worked on Mars…and that got me interested in the history of life on Earth. When I finished my PhD, I sort of wanted to take my skill sets through looking at the earth and the system and try to deal with what if that was one of the most pressing policy challenges of the day, which was climate change. So I started at Princeton, working with Michael Oppenheimer who is a great friend and mentor of mine on sea level change. I spent the first two years of the Obama Administration and the Department of Energy’s Office of Climate Change Policy, working with a great team there and getting a lot of really interesting experience, both on sort of domestic regulatory policy and international clean energy cooperation.
Bob Kopp: (02:06)
And then I got an opportunity to come back to academia in a position that had both a science component and a policy component. So I came to Rutgers in 2011. Uh, and I guess this will make this my 10th year here. One side of what I’ve been doing is sort of grew out of the work I did at the Department of Energy on the social cost of carbon. And so that was a collaboration with now the three other co-directors of the Climate Impact Lab. And we’ve been working on sort of tying the state-of-the-art physical climate modeling to the state-of-the-art and sort of statistical econometric studies of how people respond to climate to improve estimates of climate damages. And then now our focus is on sort of the global social cost of carbon. So how do we put the social cost of carbon on a firm, empirical econometric basis?
James Lawler: (02:56)
You proposed a framework in a paper in 2014, and maybe there’s more recent scholarship on this, but connecting global average sea level rise to local sea level rise. Can you describe this relationship?
Bob Kopp: (03:09)
Sure. First, I guess we should define our terms. So generally when I’m talking about sea level, I’m talking about something that’s formally called relative sea level, which is a difference in height between the land and the ocean. So relative sea level can go up if the sea surface goes up relative to the center of the earth, or if the land falls. With called global mean sea level or global average sea level is the average of relative sea level over the entire ocean. Let’s look at New Jersey. So what are the factors that control sea level off the Jersey shore? So starting with sea surface height, right? Because we’ve got both sea surface and land height, sinking of land and rising sea surface that contribute. So, one, right, the expansion of water as it takes up heat, right? That’ll raise the sea surface.
Bob Kopp: (03:57)
Two, right, the heat might not go everywhere in the ocean like equally, right? So actually that, sort of, thermal part, or would this be called Thermosteric can lead to different sea level rise in different places. And also in terms of affecting the height of the sea surface changes and winds or ocean currents can move water around. And that also affects the height of the service. So right, if you had an average increase in winds blowing out of the east, towards the Jersey shore, that would lead to an increase in sea level on the Jersey shore on average. So then there are factors that affect both the height of the sea surface and the height of the land. And those have to do with moving large amounts of mass around. To raise global average sea level by one millimeter requires melting 360 billion tons of ice, right.
Bob Kopp: (04:52)
And right now, we are getting close to two millimeters per year of global average sea level rise from melting ice. So that’s on the order of 700 billion tons of ice melting every year. So these are large masses. And when you move masses like that around, you affect the gravitational field of the earth. So when you melt, say, ice in Greenland, it actually causes a sea level fall near Greenland because there used to be this gravitational attractor on Greenland, and it’s gotten weaker. And so you get less than average global sea level rise as you move away from it. So, in New Jersey, we get probably about half the global average sea level rise from Greenland now. And then if you go far away, say out into the tropical Pacific, you get more than the global average, up to about 20% more. And then there’s also things that just caused the land to sink. So groundwater withdrawal does have this mass effect, but the largest effect is very local where pumping water out of the land causes the land to sink.
James Lawler: (05:52)
What are the orders of magnitude on that particular change?
Bob Kopp: (05:56)
So it really depends on where you are. So, New Jersey is not the most extreme example of groundwater withdrawal, but we’re probably talking about 7 or 8 tenths of a millimeter per year, on average, over the last several decades, out of a total of four to five millimeters per year. Or you go to Bangladesh or you can get order of three feet of sea level rise per a hundred years or more just from groundwater or oil and gas pumping. So, in places where this is a major factor, that can be a really large factor and dominates what you see.
Katherine Gorman: (06:34)
Bob Kopp of Rutgers University. You know, James, it’s just such a far reaching systemic issue, sea level rise, but on such a level, I never thought about it changing or having an impact on the gravity of the planet, but of course, right? Like that’s how systemic and fundamental these issues are. And in addition to that, he’s also done amazing work on the social cost of carbon, which is one of the other super fundamental issues. And really one of the crucial ways that we can understand the impact of all of this on our lives.
James Lawler: (07:12)
You know, Bob Kopp has really made a career focusing on understanding uncertainty and on quantifying uncertainty, as we’ve heard, both with respect to sea level rise, but also large-scale and intricate interactions between the climate and the economy
Katherine Gorman: (07:27)
Yeah precisely. And one of the issues that’s really at the interface, the interplay of those two things, the economy and climate change, is the social cost of carbon. And he’s also spent a lot of time working on that. And we got a chance to dig into that part of his work as well.
Bob Kopp: (07:44)
So I’m going to focus on not what’s happening now, because I honestly don’t know, and nobody knows what’s happening right now because there’s an active process to revisit this, but I’m going to focus on, sort of, as of 2016, and then we can talk a little bit about what the Trump Administration did. I think it was 2007, there was a court case where the Bush Administration was sued because they had issued… may have been a fuel economy rule, but some regulation and not taken into account the benefits associated with reduced carbon dioxide emissions and the court ruled that it was arbitrary and capricious for them not to factor into account the benefits of reduced climate change associated with our emissions. And so sort of 2008 and the last year of the Bush Administration, the different agencies started taking various different approaches to estimating what is the value to society of reducing carbon dioxide emissions by a ton, right?
Bob Kopp: (08:42)
That’s what the social cost of carbon is, it’s a benefit to society of a small reduction of greenhouse gas emissions measured in terms of dollars per ton of CO2. In 2009, when the Obama Administration came in and they said, okay, well we actually need a standardized approach to this that’s used consistently across agencies. And so they set forward and set forth a process, an inter-agency process, that turned to the scientific literature to develop the methods used. And so let’s just say that the social cost of carbon is not purely a regulatory concept. It’s a concept whose roots in the climate economics literature go back to the early 1990s and outside of the carbon dioxide concept in particular, the work on social cost of environmental pollution goes back to the sixties and seventies. There are these relatively simplified climate economic models called integrated assessment models.
Bob Kopp: (09:38)
They are models that have some representation of how changes in emissions translate into changes in temperature. Some representation of how changes in temperature translate to economic damages. And there are sort of three major models that the Obama Administration used: DICE, PAGE, and FUND that were rooted in the literature. So what you basically do with these models is you run a simulation. You say, okay, well, what is, on your baseline emissions and population scenario, what is the economic growth trajectory? Okay, now we’re going to add one ton of CO2 in a year. So say 2010 or 2020. And we’re going to look at how the economy changes in response. The global economy changes in response to that extra ton of CO2. Then we’re going to look at that difference. So the difference is that additional damage caused by that ton of CO2.
Bob Kopp: (10:31)
And then we’re going to do some economic magic known as discounting to turn this time series of future damages over the next several hundred years into a single number that we value today. And so the inter-agency working group took some scenarios from the literature, the energy modeling literature for economic growth and emissions, they sort of used the models that were built in to these different climate economic models to represent climate change, but factored into account sort of a standardized uncertainty and how much changes in CO2 translate into temperature. There’s some range of that. That’s something known as climate sensitivity. And so the final Obama Administration social cost of carbon, and I’d have to look it up exactly. But I think in current dollar values, for a ton emitted in 2020 is around $50 a ton. The Trump Administration basically said, we’re going to turn up discounting a lot. So we’re going to value the future less. And we’re going to ignore any damages that are not directly happening in the United States. So we’re going to assume that whatever losses to agriculture, to human health or whatever that happened in other parts of the world has zero effect on the United States. And those were both things that sort of contradict what the national academies described to us as best practices. And those two things sort of cut the social cost of carbon from roughly $50 a ton to roughly $3 a ton.
James Lawler: (12:03)
How should it be used? Because right now it’s used in this narrow use in terms of determining the cost of a particular regulation, say that’s set by the federal government, but presumably the possible use of social cost of carbon could or should be much broader than that.
Bob Kopp: (12:22)
Before we get to that, I want to talk about how it’s being… the things on the agenda for thinking about how to improve it. So first, one thing that the Biden Administration can do potentially right away, and may within their first 30 days, is reconsider some of those discounting discussions. So they’re certainly going to go back to using a global estimate and that’s justified for a number of grounds, but including, because it turns out that, you know, other countries respond to US action on climate and the US reducing its emissions, catalyzes emissions reduction elsewhere. There’s a strong argument to be made for lowering the discount rate. And there’s a lot of complexities around the discount rate, but the basic thing to take away is that the discount rate currently used, as a central value, is about 3%.
Bob Kopp: (13:11)
In the longer term, where the Climate Impact Lab has been focusing is really on improving the damage estimates that go into these climate economic models, because there’s been an explosion of research in terms of economic techniques and physical climate science that can support them and big data approaches that now allow us to really use large global datasets to estimate things like how exposure to a hot day or a cold day affects human mortality in regions with different income and in different climates. And so that vast body of research, which the Climate Impact Lab is working on is really something that will help move the models underlying the social cost of carbon, beyond the sort of early studies that were calibrating the model of the 1990s and 2000s really didn’t have these tools available to them.
James Lawler: (14:04)
You know, a higher discount rate implies a lower social cost of carbon because you are devaluing… So just to clarify that… the Trump administration raises the discount rate thereby lowering the implied social cost of carbon. One question there: why should the discount rate used for the social cost of carbon have anything at all to do with the treasury rate.
Bob Kopp: (14:26)
And maybe perhaps it shouldn’t, that is the practice that is most consistent with US OMB guidance. It’s not at all from first principles that clearly… that you showed. And this is a real division between those who think the discount rate should be set using observed market behaviors, and those who think it should be set based on some other grounds. Broadly, it probably should not be set at a constant value because… there are two reasons why you discount the future. One is impatience, right? You just prefer something today to tomorrow. And there’s a lot of reasonable arguments that may not be justifiable on ethical grounds. The other is because you expect people in the future to be wealthier than they are today.
Bob Kopp: (15:11)
One approach to discounting is to try to figure out what that relationship between consumption, how wealthy… how much somebody can consume, how much money and resources they have, and that the growth rate of consumption and the utility of it is, and use that to inform the discount rate. So in that case, right, if you have a future where the economy is growing faster, you should have a higher discount rate. If you have a future where the economy is growing slower, you have a lower discount rate. If you have an investment saying climate mitigation, more likely to be beneficial in a world where you’re poorer than a world where you’re richer and have more resources to adapt, then that would cause you to further lower the discount rate. But, but basically, how strong that decrease in utility of a dollar is, as you grow wealthier is, depends upon that parameter.
Bob Kopp: (16:03)
But that’s the basic idea. Like a hundred dollars of damage to us today when perhaps you should care more about that than $200 of damage to somebody in 220 years, if they are more than twice as wealthy as we are. So that’s the idea underlying this type of discounting. This is not the discounting used in regulatory analysis, which usually are not designed to look over multiple generations, right? This is a distinct… this intergenerational effect is a distinctive characteristic of climate analysis. But that’s the idea. The counter-argument and the reason why the practice has been to use the treasury rates is because it’s very hard to figure out what exactly these parameters should be set at. And the treasuries are responding at least to market actors preferences and they give you something and whether what the market actors are doing is right,
Bob Kopp: (17:00)
that’s something that one can contest, but it’s something. Right now though, the 3% discounting, and certainly the 7% discount rate is inconsistent even with that sort of descriptive approach to discounting where we just started to learn what the market is doing. So I think it’s very reasonable to say, well, actually what the market is doing is only slightly relevant, but it’s something that it requires less… The ethical judgment you have to make is that it’s somewhat relevant, but then we can look at the market and see, well, the market would not be valuing this at 3%. So why are we evaluated at 3%?
Katherine Gorman: (17:39)
Bob Kopp of Rutgers University. It’s so fascinating to hear the breadth and the depth of the work that he’s doing, and just really taking a clear look at fundamental ideas like risk and how we react to it, I think, is so crucial for creating the plans that are going to be necessary to react to our changing world. It’s fascinating.
James Lawler: (18:05)
And just an update since this episode was recorded, the Biden Administration did return to the Obama era, $51 per ton, social cost of carbon, and has called for the inter-agency working group to reassess that number. So it could go up. And they’re working on that assessment at the Climate Impact Lab, where Bob is a director. Bob Kopp’s work is definitely work to watch and to stay abreast of. You can read not only the work he’s done on the past IPCC assessment report, but also his book on the economic risks of climate change.
Katherine Gorman: (18:30)
Absolutely. And of course stay tuned for the next IPCC report, which will prominently feature the work of Professor Kopp. Well, that is it for this episode of the podcast. You can head over to climatenow.com to check out other interviews, watch our videos, and sign up for our newsletter. And if you want to get in touch with us, maybe you’ve got an idea that Bob Kopp should look at next, email us at contact@climatenow.com or tweet at us @weareclimatenow. We hope you’ll join us for our next conversation.
