[Why on earth are peoples lives being valued differently depending
on the country they live in?]
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IS THE LIFE OF A POOR PERSON WORTH LESS THAN A RICH HUMAN?  
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Hannah Story Brown and Emma Marsano
February 16, 2023
Common Dreams
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_ Why on earth are people's lives being valued differently depending
on the country they live in? _

A fire burns at a fossil fuel extraction site in Texas in 2021. The
Environmental Protection Agency has proposed a new way to evaluate the
cost to humanity of emitting greenhouse gases., David Goldman/AP

 

Last week a shocking story from NPR largely slipped under the radar.
The headline: “Why the EPA puts a higher value on rich lives lost to
climate change
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Climate Correspondent Rebecca Hersher shared
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“twisted tale of math, ethics and climate change” that is the
Environmental Protection Agency’s effort to decide what’s been
called the most important number you've never heard of: the social
cost of greenhouse gases.

This is a number—in U.S. dollars—that tries to represent the
cumulative cost to humanity of emitting a single ton of a greenhouse
gas. Carbon dioxide, methane, and nitrous oxide each have their own
estimated cost. Since a 2007 Ninth Circuit ruling stated
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federal agencies must assess the monetary value of carbon emissions
reduction, the EPA—as well as an inter-agency working group
assembled and disbanded by different administrations over the
years—has devised, revised, and revised again this single number.

Obama’s inter-agency working group collaborated with the National
Academy of Sciences to decide a whole-of-government estimate of the
social cost of carbon. They set it at $51 per ton of carbon dioxide
emitted. The Trump administration disbanded the inter-agency working
group, and substantially lowered the social cost of carbon to only $7
per ton. They did this by
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damages in countries other than the United States from the analysis
and putting less weight on harm to future generations.

President Biden used his first day in office to reinstate
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inter-agency working group, directing them to set an interim estimate
and develop a new estimate for the social cost of greenhouse gases.
The working group has yet to make a proposal, but the EPA has come out
ahead of them in proposing its own new evaluation
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the social cost of carbon: $190 per ton. EPA also proposed raising the
cost of methane emissions to $1,600 a ton, and nitrous oxide to
$54,000 a ton—substantial increases from interim estimates
[[link removed]] putting
the cost of carbon at $51 a ton, methane at $1,500 a ton, and nitrous
oxide at $18,000 a ton.

This significant increase in the estimated cost of greenhouse gas
emissions will impact evaluations of the costs and benefits of
proposed federal regulations, communicating more strongly the benefits
of reducing emissions and the harms of continuing or increasing
current emissions levels. Presumably, this is good news for the
planet.

But there’s a problem. Several problems, in fact. The way that the
EPA came up with this number, and what it fails to take into account,
raises some profound ethical questions.

A LITTLE BACKGROUND

First of all, it’s worth getting into why federal agencies have a
use for this number in the first place. In 1981, the Reagan
administration issued Executive Order 12291
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which mandated that all “major regulations”—which Reagan defined
as having an annual economic impact of $100 million dollars or
more—be evaluated using cost-benefit analysis. Cost-benefit analysis
is a method used by economists which attempts to convert every impact
of a regulation, from the cost of implementing it to how it benefits
people’s health, into dollars.

The Office of Information and Regulatory Affairs (OIRA) is the entity
responsible for evaluating proposed regulations through cost-benefit
analysis. We won’t get further into the weeds on OIRA in this
newsletter, but expect more from us on OIRA soon. For those interested
in reading more now, we’d recommend our Executive Director Jeff
Hauser’s piece “The Little Agency That Could (Block All Good
Regulations)
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on the agency’s historical impact.

If regulations have to prove their worth in monetary terms—already a
flawed and subjective metric to decide what makes a regulation
worthwhile—then, the logic goes, it makes sense to try to convert
something as important but complex as the impact of greenhouse gas
emissions into dollars, because otherwise that impact wouldn’t get
taken into account. But reducing complex phenomena to dollars that can
be weighed against things that are _actually _dollar amounts, like
the cost to an industry of complying with a new regulation, is a
troubled task. The conflations and assumptions that economists have to
make in order to turn lives into dollars on a balance sheet often veer
far into unethical terrain.

Because the social cost of greenhouse gases is intended for use in
cost-benefit analysis, the estimate is based on the inherently
problematic “willingness to pay.” Willingness to pay is how
cost-benefit analysis tries to represent in dollars how much people
value the reduction of various kinds of risks in their life, like the
risk of asthma, or a workplace injury, or cancer or premature death.
In effect, the social cost of greenhouse gases takes the average
across different populations (we’ll get into that soon) of how much
economists think (based on surveys or other forms of data) that people
would be willing to pay for a reduction in their risk of various harms
due to climate change.

This calculation presents all kinds of ethical and moral
challenges—an observation that’s hardly new. Cost-benefit analysis
as a practice has many critics. One major criticism is that
cost-benefit analysis is far more useful to people pushing
deregulation, because the financial costs of implementing new rules
are so much easier to quantify than the more amorphous benefits. Given
the enormity of what the social cost of greenhouse gases purports to
represent, it is in some ways a perfect example of the foundational
flaws of this kind of economic analysis. This is what Rebecca
Hersher’s story last week gestured to, when she characterized
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social cost of carbon as both a “powerful tool and ethics
nightmare.”

THE VALUE OF A HUMAN LIFE

Hersher noted
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“a major reason the EPA's new social cost of carbon is higher is
because this is the first time the federal government has added to its
calculations the cost of climate-related deaths outside America,
including in developing and low-lying countries that are most
vulnerable to the effects of climate change.”

This is obviously important—climate change is the definition of a
global issue. We all share a global atmosphere, though of course rich
countries in the Global North have historically been far more
responsible for polluting it than others. Now here’s the catch:
“the EPA didn't assign the same dollar value to every life. Instead,
a life lost in a lower-income country due to climate change is worth
less than a life lost in a higher-income country. The upshot is that
the value of a climate-related death in the United States is equal to
about 9 deaths in India, or 5 deaths in Ukraine or 55 deaths in
Somalia. It also suggests that the life of a person in Qatar is worth
almost twice as much as the life of an American.”

Why on earth are people’s lives being valued differently depending
on the country they live in? The reason is because of that
“willingness to pay” metric. People in higher income countries are
assumed to be more willing to pay to reduce their risk of various
kinds of injury and death from climate change than people in low
income countries…because they have access to more money. The
consequence of the EPA’s reliance on the limited tools of
cost-benefit analysis is that their model of the social costs of
greenhouse gases basically puts a higher value on richer lives. You
don’t need us to tell you how messed up that is.

In the NPR piece, Hersher mentions
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study from economist Tamma Carleton. Ostensibly she’s talking
about this study
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which models climate mortality in two ways—one with the “value of
a statistical life” adjusted by national income, and one based on
global average income, where “the lives of contemporaries are valued
equally.” THE STUDY FOUND THAT IF ALL LIVES AROUND THE WORLD WERE
VALUED EQUALLY, THE SOCIAL COST OF CARBON WOULD APPROXIMATELY
DOUBLE. In other words, the EPA’s refusal to stake an ethical
position and declare all lives equally valuable, and all unnecessary
deaths equally worth avoiding, also has the consequence of lowering
the social cost of carbon, and thus reducing the perceived imperative
of mitigating climate change.

Herschel wrote
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it’s “unclear why EPA economists didn't choose this route.” Law
professor Daniel Hemel speculated that “some policymakers might be
concerned about proposing a social cost of carbon that is so high, it
appears to require the U.S. to take drastic, and politically
unpopular, steps to slash greenhouse gas emissions.” But… if
that’s the more accurate social cost of carbon emissions,
shouldn’t the EPA use that number, and allow the policy implications
to be worked out by the rest of the federal government?

Thanks to the bizarre imperatives of cost-benefit analysis, there are
plenty of other flaws in the calculation of the social cost of
greenhouse gases, many of them shrouded in technocratic fog. There’s
the fact that climate damages are calculated in terms of reduced
consumption_, _as if the point of living were to consume, and climate
destruction only significant for getting in the way of goods and
services. There’s the fact that these models value present lives
more than future lives, when a premature climate-related death today
and a death in 50 years are just as impactful, and greenhouse gases
are a distinctly intergenerational harm. Emissions are released in an
instant, only to persist for generations, shaping the possibilities of
life on earth for literal centuries.

And then there’s the matter of equity, which the EPA acknowledges
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theorists think “should be addressed directly throughout all
elements” of cost-benefit analysis, but which it neglects to
incorporate here. The model doesn’t pay attention to intersectional
damages, i.e. the accumulation of multiple risk factors for specific
communities or regions. It also ignores the historical context of
different countries being differently culpable for climate change,
with the least responsible populations often the most vulnerable to
climate impacts
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The EPA openly acknowledges (see p. 73
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that their metric fails to address many known climate change-induced
risks including death, illness and injury from air pollutants,
infectious disease, allergies, displacement and migration; the
availability of safe drinking water and its distribution; extreme
precipitation; ozone destruction; threats to biodiversity and the
existence of habitats for wildlife, and many others. These omissions
aren’t related to a lack of scientific data about the phenomena, but
a lack of progress reducing what we know about their harms into
dollars that can be plugged into economic analyses.

At several points in the EPA’s November 2022 report
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its proposed social cost of greenhouse gases, the agency acknowledges
that their metric likely underestimates the true cost of greenhouse
gas emissions. This is a gross understatement. And when you take into
account the ethical issues inherent to cost-benefit analysis, along
withall of the information the social cost of greenhouse gases should
account for that doesn’t exist or can’t be converted into dollars,
it becomes clear how nonsensical it is that we let economists’
designs be so central to our regulatory processes.

How convenient it is for industry, that all the things which get
left _out _of the equation would increase the social cost of carbon,
and compel even steeper systemic change! Of course, corporations are
hardly satisfied with their decades-long giveaways. A coalition of
Republican attorneys general are currently fighting
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Biden administration’s _interim_ estimates for the social cost of
carbon ($51/ton), which is only a quarter of the new cost the EPA
proposes.

Big picture, these are literally life and death questions that
economists are attempting to translate into the stilted language of
the U.S. dollar. So literally, that on the bottom of the 61st page of
the EPA’s report
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there is a random footnote mentioning a 2006 study that “reflects a
91% probability of the human race surviving 100 years.” Don’t
worry about that remaining 9%—it’s almost certain that the
probability of the survival of the human race can’t be accurately
calculated by economists. Worry instead that economists are the ones
in charge of designing several tools that shape how actively the
government will try to reduce the probability of our planet’s
destruction to zero.

Ultimately, the demand for environmental regulation and climate policy
to be shaped by ethics—to be guided by a generous, vitalizing sense
of responsibility to ourselves and others, near and far, human and
non-human, alive today and for generations to come—can only come
from the public. No economist will ever suggest that a forest should
exist for its own sake, or that people are willing to change the way
they’re accustomed to doing things for the wellbeing of their
grandchildren’s grandchildren. That will have to come from us.

_Hannah Story Brown is a researcher at the Revolving Door Project._

_Emma Marsano (she/her) is a Researcher on the Governance Team at The
Revolving Door Project, researching and writing about topics related
to anti-monopoly and DOJ oversight._

_Common Dreams is a reader-supported independent news outlet created
in 1997 as a new media model.  Our nonprofit newsroom covers the most
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* Climate Change
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* Environmental Protection Agency
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* Inequality
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* poverty
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