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Cut Carbon, Breathe Easier, Live Longer
A new study says a federal cap-and-trade policy could pay for itself ten times over with health benefits.

What if I offered you an investment that would make us all healthier, save thousands of lives, and pay for itself? It would be hard to turn down a deal like that. According to a new study from the Massachusetts Institute of Technology, there is such an investment, and it’s called cap and trade—the market-based plan to reduce carbon pollution that is still somehow controversial, despite the benefits it offers to human health, the U.S. economy, and the future of the planet.

The theory behind the MIT study is simple. In addition to greenhouse gases, fossil fuel-burning power plants emit a wide variety of other air pollutants that lead to asthma, lung cancer, and cardiovascular disease. Carbon reduction policies like cap and trade reduce all those other forms of pollution, too (including particulate matter, sulfur dioxide, and nitrogen oxide, which leads to lung-burning ground-level ozone). In other words, clean air is a positive side effect of cap-and-trade policies, along with their main purpose: reducing the carbon pollution that causes climate change. (Here’s a guide to how cap-and-trade programs work.)

As side effects go, clean air is extraordinarily valuable. Last year, a study showed that particulate matter in America’s more polluted cities cut life expectancy by a year or more. Another study found that air pollution from power plants causes more than 50,000 premature deaths annually. Breathing easier also comes with big cost savings. In cities with the dirtiest air, pollution costs around $1,600 per person annually, in the form of health care, lost work, and premature death.

Here’s how the MIT study shows the potential value of cap-and-trade policies, which have been debated in Congress but so far failed to pass (though the Northeast and California have created their own regional markets):

First, the authors used an existing economic model to calculate a carbon price that would reduce pollution 10 percent by 2030, relative to a 2006 baseline. (That date and reduction level mirror the reductions called for in the Environmental Protection Agency’s proposed standards for power plant emissions, which the Obama administration is pursuing in the absence of Congressional action on climate.) Then, using another existing model, the researchers calculated the health benefits. The final step was to convert those saved lives into dollars. (It might sound grisly to express the value of a life in dollars and cents, but an accepted conversion rate is important to these sorts of studies.)

At the end of all that modeling and number crunching, the authors found that, in the year 2030, these health benefits would pay back the price we put on carbon through a cap-and-trade policy more than ten times over.

It’s important to emphasize that the result—a ten-fold payback for carbon reduction—is for air pollution alone. According Kim Knowlton, a senior scientist for NRDC (which publishes OnEarth), dealing with carbon emissions offers countless other health benefits that we could add on. The authors left out reductions in heat-related sickness and death, which currently costs the U.S. economy more than $600 million per year. They didn’t consider hurricane-related injuries and fatalities, which cost $175 million per year. They didn’t include wildfires, which cost $72 million per year in illness and death, or the impact that global warming has on mosquito-borne illness, which costs us $26 million annually.

The study has its limitations, and you’re sure to hear about them from the denier crowd. Studies that are based on economic modeling are often subject to criticism, because economists love to bicker about the quality of their modeling software. It’s also difficult to extrapolate the MIT results beyond 2030. If we converted every coal-fired plant in America to natural gas tomorrow, we would experience a tremendous improvement in air quality—though natural gas is still a carbon-emitting fossil fuel, so it would continue driving climate change. The next move would be to switch from natural gas to renewables. That change, however, would produce a much smaller air quality benefit (since we would now be replacing a cleaner-burning fuel).

Therefore, the enormous economic benefits identified in the MIT study would likely begin to tail off in the future as we edge toward lower levels of carbon emissions. Finally, critics will point out that there are cheaper ways to achieve these health benefits than cap and trade. Directly regulating the emission of air pollutants like nitrous oxide and particulate matter would cost less than going after carbon itself, and could produce similar health results. (Although it wouldn’t address global warming.)

Some of these critiques are valid, to a point. But you also have to consider their motivation. Outright climate denial has become scientifically untenable as more evidence mounts of a warming world and more of the public comes to accept reality. Since they can’t win on the climatology, fossil fuel’s defenders are now making an economic argument: even if climate change is real, they claim, we can’t afford to do anything about it. The MIT study severely undermines this argument.

If cap and trade can pay for itself many times over, we’d be mad to reject it.

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Brian Palmer covers daily environmental news for OnEarth. His science writing has appeared in Slate, the Washington Post, the New York Times, and many other publications. MORE STORIES ➔