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Laurie Johnson’s Blog

Climate deniers' new gambit: the updated SCC ("social cost of carbon")

Laurie Johnson

Posted July 17, 2013

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What was once an obscure technical detail in regulatory rulemakings, the “social cost of carbon” (SCC), will be discussed at length in hearings on Capitol Hill (July 18, 2013): Representatives who have been denying climate science for years are going to argue that rules restricting dangerous carbon pollution cannot go forward until there has been a lengthy public commenting process on the SCC, which has just been updated to reflect more recent peer-reviewed science.

It’s critical that this move is seen for what it is: the newest stall tactic among many attempts to stop the Environmental Protection Agency (EPA) from doing its job of protecting our health and environment by setting common sense standards to limit carbon pollution from major sources. Following last year’s  extreme weather on carbon-pollution steroids, which cost Americans more than $140 billion, it should be clear that unlimited dumping of carbon pollution into our atmosphere is not only wrong, it is very costly. The SCC is the administration’s estimate of just how costly. This is exactly the kind of analysis the administration should be doing.

Critics are complaining that there was no opportunity for the public to comment on the SCC update. Some are also charging the administration with inflating the number to justify stronger pollution standards, and with doing a runaround on Congress by having the EPA set standards. These are all red herrings.

Here are the facts:

  • The updated SCC estimate is actually a response to public comments on the previous SCC.  Economists (me included), scientists, and stakeholders have urged the administration to update the SCC to reflect recent peer-reviewed literature, which is exactly what it has done. Continuing to use outdated information when more recent science is available would be negligent and violate all tenets of good scientific practice. The fact that critics are complaining about the administration responding to public comment and incorporating updated information in its SCC estimates reveals their not-so-hidden agenda of obstruction.
  • The final microwave oven energy efficiency standards does not depend on the updated SCC value (see for yourself here, Table I-3). In the microwave rule consumer savings on energy bills from reducing wasted electricity will be three times the cost of achieving them, without even considering the climate benefits. The climate benefits only show how important these standards are in protecting public health: total savings go up to 5.6 times the costs under the previous SCC, and about 7 times with the updated SCC.** The SCC update did not affect the standard set in the microwave rule, so there was no need for an additional round of public comment before that rule was finalized.
  • The administration’s “social cost of carbon” metric is neither new nor hidden; it has been used for over two years and received extensive public input. Pages and pages of public comments have been submitted during open commenting periods for rules using the SCC, ranging from fuel economy vehicle requirements to energy efficiency standards for our homes, buildings, and appliances. I know because I’ve submitted them.
  • The public will have ample opportunity to comment on the updated SCC, just as it has in the past. The updated SCC makes no material difference in the microwave efficiency rule, but if it does in any other rulemakings there will be extensive opportunities for public input.
  • Most of the damages from climate change are not in the models; the damages are therefore greatly underestimated, not inflated. For example, nowhere in the administration’s technical support document are any of the following damages discussed as being included in the models: forest fires, drought, smog (and associated asthma and other respiratory illnesses), interaction effects from higher sea levels and storm surge (which is what made Superstorm Sandy so devastating), power outages (8.5 million homes and businesses lost power from Sandy), increasing food prices from drought, dried up canals where goods can’t be shipped, water shortages, forest dieback from pest infestations, coral reef disintegration, ocean acidification, socio-economic conflict from shrinking water availability and other resources. The list goes on and on…and on. The sad and very scary truth about the damage estimates being used by the administration is that they exclude most climate impacts, and some of the most important ones. Why? Because the economics literature cannot keep pace with climate disruption impacts, and because it’s much easier to measure the kind of things included in the models, like costs for more air conditioning or the value of property swallowed up by the sea, than these other impacts.
  • The administration discounts the future too much, not too little. As I have argued in detail elsewhere the administration’s central SCC estimate gives too little weight to the health and environmental damages future generations will experience from climate change. Critics arguing for higher discount rates are essentially saying that we should ignore the effects we have on our grandchildren completely.
  • The administration follows the Golden Rule by including damages wherever they occur. We want Europe and China to consider the effects of their actions on us, so it is only right for us to consider the effects of our carbon pollution on others. The administration is following standard practice—and the Golden Rule—in accounting for all the damages caused by carbon pollution emitted in the United States.
  • The government relied on independent, peer-reviewed estimates  to assess the benefits of reducing carbon pollution.  The administration’s SCC values were derived from the most widely used climate economic models published in the economics literature; models developed and heavily peer-reviewed by nerdy economists who have no connection to the administration. Who else could have come up with the term “social cost of carbon” for these damages.
  • The Clean Air Act is a Law Passed By Congress—just not by certain disgruntled members of this Congress who can’t get their way. In fact, in contrast to today’s Congress, the history of the Act is one of consensus. In 1970, the law was passed with a unanimous Senate vote and by a 375 to 1 majority in the House—and signed by Republican President Richard Nixon. In 1990, it was strengthened, again with heavy bipartisan support: 89 to 11 in the Senate, 401 to 21 in the House, and signed by Republican President George Herbert Walker Bush. Today the Act still enjoys widespread support from Americans across the political spectrum.

In sum, climate deniers in Congress have manufactured a non-story in an attempt to stop any progress from being made to reduce carbon pollution. The entire exercise comes from Representatives who have failed numerous times to enact bills that would block the Environmental Protection Agency from addressing climate disruption. This move is just their latest gambit—one with no substance other than a betrayal of the American public, and our children and their future.

** Ratios are calculated using the average of lower and upper bound estimates of consumer savings at the two discount rates used in the analysis, and the central climate benefits number.

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