Climate costs of US materials production amount to US$79 billion 

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A study published in IOP Publishing’s journal Environmental Research Letters, has revealed a staggering US$79 billion in annual climate-related costs from the production of common materials in the United States. These costs, which stem from greenhouse gas emissions, are not reflected in current market prices, effectively creating a massive subsidy for carbon-intensive industries. 

“High price point is a common reason why low-emission alternative materials are not adopted voluntarily by industries. Accounting for the externalised cost of emissions could provide an economic basis for driving innovation and implementation of alternative material production methods,” says lead author Elisabeth Van Roijen, PhD, University of California, Davis. 

The research, conducted by researchers at the University of California, Davis, examines nine widely used materials such as asphalt, plastics, brick, glass, cement, lime, gypsum, steel, and aluminium. By analysing production data, energy consumption, and emissions factors, the researchers calculated both the energy-related (for example, as required for high temperature processes) and process-related (for example, resulting from chemical reactions) carbon dioxide emissions for each material. 

These nine materials resulted in 427 million metric tonnes of CO2 emissions in 2018. If the climate costs from these emissions were factored into prices, some materials would see significant cost increases: 

• Cement: 62 per cent 
• Lime: 61 per cent 
• Gypsum: 47 per cent 
• Steel: 22 per cent 
• Plastics: 19 per cent 

Steel and plastics, despite climate-related costs constituting a lower fraction of their market value, are each responsible for over US$20 billion in annual climate costs due to their high production volumes. 

The study used the US Environmental Protection Agency's Social Cost of Carbon (SCC) estimate of US$184 per tonne of CO2 to calculate the climate-related costs. This figure captures the quantifiable economic damage associated with increased carbon emissions, including effects on human health, agriculture, and coastal infrastructure. 

Incorporating these climate costs into material prices could drive innovation in low-carbon production methods and increase the competitiveness of recycling and alternative materials. For example, if aluminium and steel production transitioned entirely to renewable energy sources, their climate-related costs would decrease by 95 per cent and 79 per cent, respectively. 

The report emphasises the policy implications of the findings and the need for co-ordinated international action. Such material pricing occurring only in the US could result in increased imports of lower-cost, higher-carbon-emitting materials from other countries. 

Targeted policies are needed to address the process-related emissions (such as chemical reactions in cement and lime) that cannot be eliminated by switching to clean energy sources. Improved recycling rates, extended producer responsibility laws, and alternative materials could all play a role in reducing emissions. 

As global material demand continues to grow, particularly in developing economies, the researchers call for further research into policy solutions to address the climate effects of material production and use in a global and co-ordinated manner.