Study: Cutting Emissions Could Pay for Itself

Money saved on health care spending related to carbon emissions could be 10 times what it would cost for policy implementation, according to research conducted by Massachusetts Institute of Technology and published in Nature Climate Change.

Researchers compared health care and other costs related to carbon emission-related illness to the costs of implementing three climate policies: a clean-energy standard, a transportation policy and a cap-and-trade program. The three were designed to resemble proposed US climate policies.

• A cap-and-trade program would cost an estimated $14 billion, with health care savings calculated to be more than 10 times that amount.
• A transportation policy with rigid fuel-economy requirements would cost more than $1 trillion in 2006 dollars, with health benefits recouping only a quarter of the costs.
• A clean energy standard would cost an estimated $208 billion, and estimated health cost savings would be about $247 billion.

Researchers noted that while cutting carbon dioxide from current levels would result in savings from better air quality, pollution-related benefits decline as carbon policies become more stringent. After a certain point, most of the health benefits have already been reaped, and additional emissions reductions won’t translate into greater improvements.

The study is the most detailed assessment to date of the interwoven effects of climate policy on the economy, air pollution and the cost of health problems related to air pollution. The MIT group 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.

Although some US companies have been actively working to reduce their carbon emissions, some have expressed concern that current governmental demands to reduce emissions are too stringent.

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