White House quietly revises social cost of carbon

Source: Jean Chemnick, E&E reporter • Posted: Tuesday, July 7, 2015

The White House has slightly reduced its estimate for the social cost of carbon (SCC) in response to public comments that officials collected more than a year ago.

The Office of Management and Budget posted its revision of the controversial estimate Thursday, immediately before the Fourth of July weekend. Office of Information and Regulatory Affairs Administrator Howard Shelanski and Maurice Obstfeld, a member of the Council of Economic Advisers, said in their post that lowering the SCC from $37 to $36 per metric ton of CO2 for 2015 was the result of minor technical revisions in the modeling used to arrive at the estimate.

Shelanski and Obstfeld said in their post that the SCC, which has appeared in 34 rulemakings, “is a tool that helps Federal agencies decide which carbon-reducing regulatory approaches make the most sense — to know which come at too great a cost and which are a good deal for society.”

The SCC was last revised in 2013 and gives a range of estimates of the long-term economic damage done by each incremental ton of carbon released into the atmosphere.

While the estimate is not in itself a regulation, Republicans on Capitol Hill have frequently targeted it and the administration process that produced it as an executive branch bid to justify costly rules, including U.S. EPA’s Clean Power Plan. They launched numerous hearings and messaging bills following the 2013 revision aimed at driving home the point that the interagency working group responsible for the SCC did not pursue a public process and questioning the group’s findings about the health, agricultural, infrastructural and other costs of greenhouse gas emissions. The White House noted that it relied on three publicly available peer-reviewed models to arrive at its estimate, but in late 2013 it responded to congressional pressure by offering a public commenting period on the SCC, which closed in February 2014.

Shelanski and Obstfeld said it took the administration 15 months to process the responses, including about 150 substantive comments, “some quite lengthy and technical.”

Comments ran the gamut from protests that the administration underplayed the benefits of CO2 emissions to some that said it underestimated the SCC, especially by embracing a 3 percent discount rate that some say underplays the future costs of warming.

The 44-page technical document that accompanies the OMB post notes that “any effort to quantify and monetize the harms associated with climate change will raise serious questions of science, economics, and ethics and should be viewed as provisional.”

The post pledges that the executive branch would seek independent expert advice from the National Academies of Sciences, Engineering and Medicine to inform yet another revision of the estimate, though federal agencies would continue to use the current SCC figure in their rulemakings until that revision could be made. It did not give a timeline for the next revision.

While EPA, the Energy Department and other agencies use the SCC in their rulemakings, the estimate has also made its way into some legislation. Sens. Sheldon Whitehouse (D-R.I.) and Brian Schatz (D-Hawaii) released a carbon tax bill last month that tracked with the SCC. Their staffs did not immediately respond to questions about whether they might revise the figures in their bill to accommodate the administration’s revision.