"Joe Kruger, a visiting fellow at the nonpartisan Resources for the Future, said using proxy costs is often smart business.
'It's kind of viewed as due diligence,' Kruger said of proxy costs generally. 'The last thing I think you'd want if you're an energy company, or that you should want, is to build a project that has large additional costs that you didn't count on at the planning stage.'"
"Analysts who study proxy costs say companies implement them differently. It's often unclear how the costs they use filter into their operations. Firms are cagey about where the cost goes. Does the proxy price apply to the emissions of a lone rig or to all knock-on emissions released because of that rig?
Companies often don't say. 'Different companies do different things,' Rob Williams, a senior fellow at Resources for the Future, said by phone. 'It's hard to pin down.'
Just as they estimate what gas and oil prices will be, firms try to project what carbon prices will be.
'What they want to do is think about the likely price,' Williams said."
"But according to Roberton Williams, a professor at the University of Maryland and director of academic programs for Resources for the Future, a non-partisan group that studied the climate change agreement, it is difficult to know exactly what the economic impacts of withdrawing will be.
Williams was interviewed by the Boston public radio station in May where he was asked about the economic impact of leaving the agreement.
'One of the problems we have, we’re much better at modeling the cost of doing something to reduce emissions than we are modeling the cost of doing nothing,' Williams said. 'We don’t know very well how other countries are gonna react.
'If other countries react by doing less to fight climate change, that has very real costs,” Williams said. 'That unchecked climate change could have very serious costs for the U.S. economy.
'But knowing exactly how big that is is really hard,' Williams said."