Earlier today, ThinkProgress gave an overview of “Environmental Accounting for Pollution in the United States Economy” from the August issue of American Economic review. This piece models the effect of six major pollutants (sulfur dioxide, nitrogen oxides, volatile organic compounds, ammonia, fine particulate matter, and coarse particulate matter) from the country’s 10,000 pollution sources. Paul Krugman, from the NYT, summarizes their main point as "Consumers are paying much too low a price for coal-generated electricity, because the price they pay does not take account of the very large external costs associated with generation." ThinkProgress is quick to point out that "what is all the more remarkable about this conclusion is that the authors use an uber-low, uber-lame, uber-outdated “price” for CO2: We use the social cost of carbon for the year 2000. "
Using this low, dated cost modelling the damages from natural gas exceed its value added this is at around $27 a ton. Using a higher price of $65 a ton of carbon the damages from natural gas are more than double its value added. Following this line of thinking natural gas will not be a viable solution to easing global climate change.
ThinkProgress article here.