Michael A. Livermore is the executive director of the Institute for Policy Integrity at New York University School of Law. He is the author, along with Richard L. Revesz, of Retaking Rationality: How Cost-Benefit Analysis Can Better Protect the Environment and Our Health.

The climate-change bill that passed the House last month and is currently being considered by the Senate represents America's last chance to seriously address its contributions to global warming before we head to the international climate talks in Copenhagen this December. But the current legislative debate also offers an opportunity to reshape the broader conversation over the costs and benefits of environmental regulation—and environmentalists should not let the opportunity pass them by.

Recently, the EPA was asked to tabulate the economic impacts of the Waxman-Markey climate bill in the House. The agency found that households would pay between $80 and $111 more per year if the bill was passed. There has been some quibbling about whether the agency undercounted certain costs or overestimated others, but there's no dispute that missing from the EPA's analysis were the major economic benefits of taking action against climate change. This oversight has been typical of the way governments have been analyzing environmental regulation for the past 30 years—honing in only on the burdens, rather than the benefits.

Yet, for the past couple of decades, environmental economists have been busy putting a dollar value on the harms facing society from unchecked climate change. Destruction of coastal real estate, disruption of agriculture, heat waves, wild fires: none of this is cheap. Serious economic studies have shown that when the costs of greenhouse gas controls are measured against the potentially catastrophic risks of inaction, the case is pretty clear.

No one is saying this legislation will be free. In fact the point is to put a price on carbon. But, looking at a price tag is not useful if you don't know the value of what you are buying. If something costs $100,000 that sounds like a lot, until you realize you're buying prime real estate in Manhattan, in which case it's a steal. Without an honest accounting of both sides of the balance sheet, the 12 or 14 Senate "deciders" who will make or break this bill are operating in a vacuum. How can they determine whether this legislation makes sense without looking at both sides of the equation?

Some responsible senator should request that EPA produce an analysis that better examines the benefits of the House climate bill as well as the costs of not controlling our greenhouse-gases. In fact, it is likely that EPA has the tools it needs right now to put out at least a rough estimate of the costs of inaction including the "fat tail" of really catastrophic risks if we sit on our hands. Only with that information can senators assess the merits of action.

America has been hiding the real costs of dirty fuels for century. We have built massive inefficiencies into our system that have been accumulating for a hundred years. Now we are in sticker shock over the $80-$111 per year it will take to change course, but in reality, that is a tremendous bargain. Think of it as insurance, but instead of covering your car or your house, it puts a policy on the entire U.S. and global economy. In that light, it looks a lot like money well spent.

(Flickr photo credit: John Javellana)

--Michael A. Livermore