The Positive Externalities of CO2

I find this study and the potential economic and policy implications of the work very interesting. This study, and others like it, demonstrate pretty clearly that the discussions about the so-called social cost of carbon have been extremely one-sided and the research into that measure has been seriously lacking.

As literally thousands of laboratory and field studies have demonstrated, elevated levels of atmospheric  CO2 have been conclusively shown to stimulate plant productivity and growth, as well as to foster certain water-conserving and stress-alleviating benefits. For a 300-ppm increase in the air’s CO2 content, for example, herbaceous plant biomass is typically enhanced by 25 to 55%, representing an important positive externality that is absent from today’s state-of-the-art social  cost of carbon (SCC) calculations.

The present study addresses this deficiency by providing a quantitative estimate of the direct  monetary benefits conferred by atmospheric CO2 enrichment on both historic and future global  crop production. The results indicate that the annual total monetary value of this benefit grew from $18.5 billion in 1961 to over $140 billion by 2011, amounting to a total sum of $3.2 trillion  over the 50-year period 1961-2011. Projecting the monetary value of this positive externality  forward in time reveals it will likely bestow an additional $9.8 trillion on crop production between now and 2050.

07. February 2014 by Jason Hayes
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