ChatGPT and I Had a Chat About Climate Change

If anyone wonders about the efficacy and accuracy of OpenAI ChatGBT’s generative AI and why it is momentous, here is my short “interview” with it.. I would rate its “instant literacy” as quite high. It works quickly and well.

Is this enough? No, it is not. Not yet.

But as you will see, ChatGPT was able to tell me something useful about how far off course the US is in measuring up to the challenges of climate change mitigation and abatement.

This kind of advance in AI and all the other component technologies that make up metaverse experiences will drive the next major wave of global digital infrastructure industry growth.

BAT: How is the global pricing for carbon and GHG emissions calculated, how accurate is it and should it form the basis for carbon offset credits markets?

ChatGBT (response took less than 30 seconds):

The global pricing for carbon and GHG emissions is typically calculated based on the social cost of carbon (SCC) or marginal abatement cost (MAC) curves. SCC estimates the economic damage caused by each additional ton of CO2 emitted, while MAC estimates the cost of reducing each ton of emissions.

The accuracy of carbon pricing models depends on the assumptions and data used in their development, which can vary widely across different models and contexts. However, they can provide a useful tool for guiding policy decisions and pricing carbon.

Carbon offset credits markets can be based on carbon pricing, but they should also consider other factors such as additionality, permanence, and verification to ensure that the offsets are real and provide genuine emissions reductions. The quality of carbon offsets is crucial for their credibility and effectiveness in mitigating climate change.

What is the global cost of carbon and GHG emissions?

The global cost of carbon and greenhouse gas (GHG) emissions refers to the economic damage caused by each additional ton of carbon dioxide equivalent (CO2e) emitted into the atmosphere. This is also known as the social cost of carbon (SCC) and is usually expressed in monetary terms per ton of CO2e emitted.

Estimates of the global SCC vary widely depending on the assumptions and data used, but the most commonly cited figures range from around $10 to $200 per ton of CO2e emitted. The exact cost depends on a range of factors, including the climate impacts of the emissions, the discount rate used to estimate future damages, and the methodological approach used to estimate the SCC.

Can you give an example of Carbon Pricing in a country or industry sector?

Yes, one example of carbon pricing in a country is the carbon pricing scheme in the European Union (EU), known as the EU Emissions Trading System (ETS). The EU ETS is the world's largest carbon market and covers around 45% of the EU's greenhouse gas (GHG) emissions.

Under the EU ETS, a cap is set on the total amount of carbon dioxide (CO2) that can be emitted by participating industries, such as power plants and heavy industry. Companies receive emissions allowances that they can trade with each other, and if a company emits more CO2 than its allocated allowance, it must purchase additional allowances or face penalties.

The price of emissions allowances in the EU ETS is determined by market demand and supply, and it fluctuates based on factors such as economic conditions and weather patterns. As of February 2023, the price of EU carbon allowances is around €70 per tonne of CO2.

Other examples of carbon pricing schemes include the carbon tax in British Columbia, Canada, and the regional cap-and-trade program in California, United States.

Does the US have a national SSC or MAC policy response?

The United States has a social cost of carbon (SCC) policy response, but it currently does not have a national marginal abatement cost (MAC) policy response.

In 2009, the US government established an interagency working group to develop a consistent estimate of the SCC, which is used to inform the cost-benefit analysis of federal regulations that affect greenhouse gas emissions. The working group has since updated the SCC estimates several times, with the latest update released in February 2021.

However, there is currently no national MAC policy in the US, although individual states and cities have developed their own policies and initiatives to reduce greenhouse gas emissions. For example, California has developed a cap-and-trade program that uses MAC curves to set the carbon price and allocate emissions allowances to participating industries. Additionally, several US states have implemented carbon pricing policies, including carbon taxes and cap-and-trade programs.

Conclusion: ChatGBT is really quite amazing. And it prompts me to find out what my State of New Mexico is doing.

Graphic from OpenAI.com