The first and less interesting one is that the EPA boffins assumed a 3% discount rate in their calculation. Unfortunately, the question of what discount rate to use for future benefits is a raging one in the global warming debate, and not one that's really accessible to mere mortals like me. However, I'll concede that 3% might be a little steep, which means the benefits here may well be overstated.
Manzi's second complaint is more intriguing:
Even more amusingly, [the report] counts the benefits attributable to the whole world, not just residents of the United States [and] estimates the total economic benefit of avoiding one ton of CO2 emissions to be $40. How much of this the U.S. portion? $1. So more than 95% of the "benefit" in this cost-benefit analysis accrues to people outside the U.S. who aren't paying the freight.As an exercise in debating points, I get this. Most people don't realize the EPA is counting economic benefits to other countries, and human nature being what it is, will probably lose interest in the GHG rules when they learn that the entire $2 trillion (or whatever) isn't destined for American pocketbooks. It's a nice quickie rebuttal in a Crossfire kind of sense.
Still, there's a reason they call it global warming. Anything we do on the climate front is necessarily going to affect the entire world, and if we count only the benefit accruing to us personally then no action will ever seem worth pursuing. It's the tragedy of the commons, played out on the biggest commons there is.
In fact, it's even worse than that. As everyone knows, global warming is primarily caused by rich, northern economies, but the price is paid disproportionately by poor, tropical economies. Whether we spend money trying to reduce warming in the first place, or spend the money trying to adapt to warming, the bulk of the investment is going to come from the rich countries that emit GHGs and the bulk of the benefit is going to accrue to the poor countries who are most affected by it. And that's as it should be. When we talk about fighting global warming, after all, we're talking about benefitting the entire globe. The United States, as a major contributor to the problem, has an obligation to do something about it even if we only get a portion of the benefit.
Ideally, every country contributes and, eventually, every country benefits. We spend money and get 5% (or less) of the benefit because we have only 5% of the world's population. But other countries do the same and we share in those benefits. Things may or may not turn out this way, but failure is preordained if every country decides that spending money to benefit the rest of the globe is a fool's game.