At their worst, critics of the move have characterized it as an environmentalist con or an undemocratic power grab, thus setting the stage for last Thursday’s hearing before a subcommittee of the House Committee on Oversight and Government Reform. But Howard Shelanski, the White House Office of Management Budget’s Administrator for the Office of Information and Regulatory Affairs, and the sole witness, laid out point by point why objections to both the science and the estimate process are unfounded. And to his credit, Subcommittee Chairman Rep. James Lankford (R-OK) stuck to substantive questions about that process and concerns with the optics of the release, while eschewing any overheated climate denier rhetoric.
To explain: the SCC is the government’s estimate of how much carbon emissions harm the economy. It helps determine regulations and rule-making for everything from energy efficiency for new federal buildings to the Obama Administration’s proposal to use Environmental Protection Agency powers to cut carbon emissions from power plants. The first estimate was made in 2010 and then revised this past June, from approximately $26 per ton of carbon dioxide in 2020 to $43 per ton. (That’s actually the mid-range number, as the full estimate covers a range of possibilities.) European governments have produced their own very similar SCC estimates, but even this new range is really quite moderate. The relevant science has put together studies pegging the SCC at anything from $55 per ton, to $100 per ton, to as much as $900 per ton.
As Shalenski pointed out, the U.S. government’s SCC estimate actually came from combined calculations by three different climate and econometric computer models, and the technical support documents behind the release are all publicly available. The source code for these models is all public, their results are constantly being tested in peer-reviewed literature, and none of the scientists and economists who maintain and update them are employed by the federal government. Instead, the government makes use of the models for its SCC estimate, and simply choses certain inputs such as estimates of future population growth, economic growth, etc. — and none of those parameters changed between the 2010 and 2013 estimate.
The primary criticism in the hearing revolved around what Lankford and others saw as a lack of opportunity for comment on the estimation process, by either lawmakers or the public. That the updated estimate was attached to a release of new efficiency standards for microwaves — a seemingly innocuous context for something as important as the SCC — was also brought up repeatedly. But Shalenski noted that the SCC is referenced every time a new rule-making decision by a government agency makes use of it. So it is, in essence, being released to the public over and over again, with every rule-making operating as an opportunity for public comment and feedback. The people involved in the SCC estimate always understood it would be updated again and again over time. Indeed, the 2013 update was due in large part to a flood of criticism from scientists and experts that the initial 2010 estimate was far too low.
In other words, the increase in the social cost of carbon was not some one-off event driven by a shadowy process closed to the public, but rather one milestone in a perpetual and ongoing effort of public comment, review, and revision.
So setting aside the objections of climate deniers, the disagreement seemed to boil down to Republicans’ feeling that the updated SCC was released with insufficient fanfare, given the political prominence of climate issues and President Obama’s efforts to cut carbon emissions. It was an objection to the optics of the move, rather than the substance of it — on that latter score, both the science and transparency of the SCC process appear to be sound.
In fairness, the optics do matter, for diplomatic reasons if nothing else. While the transparency is there, it could possibly be packaged better. To that end, the Union of Concerned Scientists offered some suggestions in the run-up to the hearing to make the public comment and input process better organized and more prominent. They also noted that the three models used to estimate the SCC are always being updated, added to, and adjusted. They can fail to properly account for all factors, involve bad assumptions about future economic productivity, and leave out some of the relevant risks. Improvement there is always a possibility.
Of course, all of those changes are as likely to result in an even higher SCC estimate as a lower one — indeed, the general trend has been that as the models become more sophisticated, the projected cost of carbon goes up.