When last we joined hands around the ourenergypolicy.org campfire, roasting s’mores and singing songs of camaraderie, we told tales of one particular monster of the dark, to wit, the Obama administration analysis of the social cost of carbon, perhaps the most dishonest exercise in political arithmetic ever produced by the federal bureaucracy.
But this is the Beltway: No perfidy goes unrewarded. And so it is with the SCC, now tailor-made for the justification of rules utterly preposterous. Consider for example the Environmental Protection Agency efficiency rule for medium- and heavy trucks, part of the administration’s climate action plan; EPA has published estimates (Table VII-25) of the effects of the rule:
… by 2100… global mean temperature is estimated to be reduced by 0.0027 to 0.0065 °C, and sea-level rise is projected to be reduced by approximately 0.026 to 0.058 cm…
And then EPA arrives at the benefit/cost conclusion:
[We] estimate that these standards will result in net economic benefits exceeding $100 billion, making this a highly beneficial program.
How is it possible that a temperature effect by 2100 measured in ten-thousandths of a degree, or sea-level effects measured in thousandths of a centimeter, could yield over $100 billion in net economic benefits?
Well, actually, it’s easy, having nothing to do with the upward bias in most climate models of the effects of increasing greenhouse gas concentrations. The dishonesties in the SCC analysis are many, but in particular by (1) using global (rather than national) benefits to drive the SCC benefit calculations, (2) refusing to apply a 7 percent discount rate to the streams of benefits and costs, despite clear direction from the Office of Management and Budget, and (3) using ozone and particulate reductions as “co-benefits” of climate policies, the administration calculates the SCC at about $36 per ton in 2015.
So the actual effects of the policies literally are irrelevant; just compute the assumed reduction in GHG emissions, multiply by $36, and voila!
Well, you say, the U.S. is only part of a (deeply dubious) international effort. OK, let’s apply the EPA’s own climate model, and think much bigger than the pikers in Paris last year. The Obama climate policy, including the pseudo-agreement with China, yields a temperature reduction by 2100 of 25 one-thousandths of a degree. A 20 percent emissions cut by China by 2030: 2 tenths of a degree. A 30 percent reduction by the rest of the industrialized world: 2 tenths of a degree. An impossible 20 percent reduction by the rest of the developing world: 1 tenth of a degree. The grand total: about half a degree, at an annual cost of 1-2 percent of global GDP, inflicted disproportionately upon the world’s poor.
Put aside the domestic wealth redistribution effect of the Obama policy: higher energy costs in red states relative to blue ones. Put aside the utter absence of actual evidence of a looming crisis. Consider instead the religious nature of the anti-“carbon” crusade: The interpretation of destructive weather as the gods’ punishment of men for the sins of Man is ancient. And just as the pagans for millennia attempted to prevent destructive weather by worshipping golden idols, so do modern environmental leftists now attempt to prevent destructive weather by bowing down before recycling bins. The more general theological stance: In the beginning, Earth was the Garden of Eden. But mankind, having consumed the forbidden fruit of the tree of technological knowledge, has despoiled it. And only through repentance and economic suffering can we return to the loving embrace of Mother Gaia.
Back to the SCC: It is the delegation of legislative powers to the regulatory agencies that has allowed such game playing in pursuit of an ideological agenda. The only means with which to restore political accountability to the regulatory process is a requirement that all regulations be approved by Congress.
I can argue multiple ways about the Social Cost of Carbon (SCC), but the viewpoint presented above is so ideological that I’m not sure there’s a lot of point to… Read more »
My former RAND colleague, Ben Zycher, illuminates and enjoys reviewing the absurdity of cost-benefit analyses of proposed federal regulations as applied in recent Environmental Protection Agency rulemaking. One of my… Read more »
Not much point in replying to the top post, since it is so ideologically driven. But here goes a modest attempt. IPCC summary of climate models for limiting warming to… Read more »
Silly me. I never knew that in the strange new world of the climate change religious movement, it is “ideological” to point out that: The Obama IWG calculation of the… Read more »
Discount rates have been used and abused by many, which is why it’s always a good idea to present results over a range of discounting. SCC does this, I know, but… Read more »
Dr. Zycher’s questioning of “settled” climate science is completely reasonable, and long overdue. New discoveries regularly overturn “settled” science, and climate science will be no exception. Take, for example, recent… Read more »
I appreciate the spirit of your argument here but, no, gravity is not a worthy analogy for climate change. The things that make climate science and climate action a backdrop of… Read more »
Much like with assessments of EROEI, the results one gets from assessments of SCC depend heavily on where one chooses to draw the fence around the domain being assessed either… Read more »
My goodness, friends: Are we really, actually, truly going to use one—one!—drought or series of fires as evidence in support of a scientific hypothesis? Wow. Zero degrees of freedom, anyone?… Read more »
As I mentioned, “Attributing a single weather event to rising levels of greenhouse gases is certainly contentious.” But the assertion of wildfire risks and costs rising with global warming can be… Read more »
This English major would like to take a shot at the disingenuous conclusions of this discussion, skipping the political ‘dog whistles’, if I can. The data is selected to support… Read more »
What’s disappointing in this discussion is that the combative and condescending tone taken is weakening what could have been an interesting dialogue on several salient points, including: 1) the appropriate… Read more »
Hurrah for Brent Nelson. One of the great benefits of the OEPF discussion papers is the civil discourse that commenters have generally followed. So many blogs have, perhaps, 4-6 good comments… Read more »
It is disappointing to see climate deniers on OEP but, alas, that is the way it is. If Zycher’s arguments (and the related AEI claims about climate) were valid, he… Read more »
I agree with much of what is written here, but not the notion that discount rates in this context are immoral. To use your analogy, the cost of having no… Read more »
Brent: The reason a discount rate is immoral in this instance is because one party is getting the benefit and almost all other parties and future generations suffer. A discount… Read more »
If anything, the federal government is dramatically underestimating the social cost of carbon. A Stanford study last year out the real SCC at $220/ton: http://news.stanford.edu/2015/01/12/emissions-social-costs-011215/
Amid the various complaints above of “ideology” and laments for a lost “civility,” we find no observations about Dan Miller’s complaint that a “climate denier” (apparently yours truly) has managed… Read more »
Yes indeed, you do have actual work to do. Start with some investigation into the ideas ‘atmospheric life’. As it is currently used the term “refers to the approximate amount… Read more »
Dr. Zycher: You talk about temperatures, sea level rise, and related climate items as if you are providing an informed scientific assessment of the situation, but you are doing nothing… Read more »
As a follow up to the comments above, in case anyone is not tracking the sea ice situation, we are in record low territory. From the National Snow and Ice… Read more »
The conservative cost of climate policy is 1% of GDP? Simply not close. The cost of climate policy with the right solution is zero, indeed, it could even be positive… Read more »
The discussion of social costs is important, but can be misleading. I remember reviewing an EIS for a waste storage facility some year ago in which it was assumed… Read more »
Karl: It’s not always appropriate to do a traditional cost-benefit analysis when the costs are incalculable (the collapse of civilization, for example) or when, as you point out, the benefits… Read more »
Dr. Zycher used a number of tactics to sow doubt about the reality of global warming. On his blog, Tamino does an excellent job of exposing such misinformation techniques. It’s… Read more »
I think the author and the American Enterprise Institute ought to step back a moment, and rather than fling accusations of believing that changes in climate is comparable to a… Read more »