Preliminary Affordability Determination — Energy Efficiency Standards

May 29, 2014 • Public Comments

Our comment primarily concerns the use of the social cost of carbon (SCC) by the Department of Housing and Urban Development (HUD) and Department of Agriculture (USDA) in this Preliminary Affordability Determination. The SCC is discordant with the best scientific literature on the equilibrium climate sensitivity and the fertilization effect of carbon dioxide — two critically important parameters for establishing the net externality of carbon dioxide emissions — at odds with existing Office of Management and Budget (OMB) guidelines for preparing regulatory analyses, and founded upon the output of Integrated Assessment Models (IAMs) which encapsulate such large uncertainties as to provide no reliable guidance as to the sign, much less the magnitude of the social cost of carbon. Additionally, as run by the Interagency Working Group (IWG), the IAMs produce illogical results that indicate a misleading disconnect between a climate change and the SCC value. Further, the sea level rise projections (and thus SCC) of at least one of the IAMs (DICE 2010) cannot be supported by the mainstream climate science.

Until this situation can be properly rectified, the SCC should be barred from use in this and all other federal rulemaking. It is better not to include any value for the SCC in cost/​benefit analyses such as these, than to include a value which is knowingly improper, inaccurate and misleading.

Consequently, our overall recommendation is to remove any and all analyses in this Preliminary Affordability Determination — Energy Efficiency Standards that make reference to, or incorporate a value of, the social cost of carbon as determined by the federal Interagency Working Group according to its 2013 report.

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