In my recent op-ed for The Hill examining the Obama administration’s estimation of the social cost of carbon (SCC)—a measure of how much future damage is purportedly going to be caused by each ton of carbon dioxide that is emitted through human activities—I identified two major problems with their measure.
First, the administration’s SCC was based on an estimate of global rather than domestic damages from anthropogenic climate change—an odd scope for a measure designed to be incorporated in the cost/benefit analysis of U.S. rules and regulations governing domestic activities (such as the energy efficiency of microwave ovens sold in the United States). In fact, Office and Management and Budget (OMB) guidelines state that
Your analysis should focus on benefits and costs that accrue to citizens and residents of the United States. Where you choose to evaluate a regulation that is likely to have effects beyond the borders of the United States, these effects should be reported separately.
Instead of “reporting separately,” the administration’s SCC embodies “effects beyond the borders of the United States.”
Second, the administration recently revised (upwards) its initial calculation of the SCC. In doing so, it included updates to its underlying economic/climate-change/damage models, but it did not include any updates to the characteristics of the equilibrium climate sensitivity used by the models. Since the equilibrium climate sensitivity is the key factor in how much climate change will result from a given amount of anthropogenic carbon dioxide emissions, and since there is mounting scientific evidence that the equilibrium climate sensitivity is better constrained and lower than that used in the initial analysis, there is no defensible reason why the new science was not included in the administration’s revised SCC calculation.
So that’s two strikes against it.