• Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide - Interim Estimates under Executive Order 13990

    The Interagency Working Group (IWG) on the Social Cost of Greenhouse Gases, recently reconvened under the auspices of Executive Order 13990, released a new technical support document with interim estimates on the social costs of carbon, methane, and nitrous oxide. According to the new document, released on February 26, 2021, the IWG guides agencies to revert to the four sets of values based on three discount rates (2.5%, 3%, and 5%) as were used from 2010 through 2016, which had been subject to public comment. The IWG notes that new data and evidence strongly suggests that the appropriate discount rate for intergenerational considerations is lower.

    The estimates in the new technical support document are reported in 2020 dollars, but are otherwise identical to those presented in the most recent previous version of the technical support document and its addendum. The ‘central’ 3% estimates for carbon dioxide emissions occurring in year 2025 is $56 per metric ton. The ‘central’ estimates for year 2025 methane and nitrous oxide emissions are $1700 and $21,000, respectively.

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  • Benefit-Cost Analysis Guidance for Discretionary Grant Programs

    This document is intended to provide applicants to USDOT’s discretionary grant programs with guidance on completing a benefit-cost analysis (BCA) for submittal as part of their application. A BCA provides estimates of the anticipated benefits that are expected to accrue from a project over a specified period and compares them to the anticipated costs of the project. While BCA is just one of many tools that can be used in making decisions about infrastructure investments, USDOT believes that it provides a useful benchmark from which to evaluate and compare potential transportation investments for their contribution to the economic vitality of the Nation.

    This guidance: Describes an acceptable methodological framework for purposes of preparing BCAs for discretionary grant applications; Identifies common data sources, values of key parameters, and additional reference materials for various BCA inputs and assumptions; Provides sample calculations of some of the quantitative elements of a BCA.

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  • Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis

    On his first day in office, President Biden issued an executive order that would, among other things, reconvene the Interagency Working Group on the Social Cost of Greenhouse Gases. The new Working Group is initially tasked with: (1) publishing an interim Social Cost of Carbon, Social Cost of Methane, and Social Cost of Nitrous Oxide within 30 days, which agencies should use to monetize the value of changes in greenhouse gas emissions; (2) publishing final revised social cost values by January 2022; (3) providing recommendations for areas of decisionmaking, budgeting, and procurement by the Federal Government where the social cost estimates should be applied by September 2021; (4) providing recommendations by June 2022 for a review and update process for the social cost values, including to ensure these estimates are based on the best available science and economics, but also that they adequately take into account climate risk, environmental justice, and intergenerational equity.

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  • Establishing a Value of Carbon: Guidelines for Use by State Agencies

    New York’s Climate Leadership and Community Protection Act directs the Department of Environmental Conservation to establish a value of carbon for use by State agencies. This guidance document provides a recommended procedure for using a damages-based value of carbon along with a general review of the marginal abatement cost approach. The current guidance is focused on the damages-based value as a tool to aid state agencies as they begin to regularly consider greenhouse gas emissions and climate change in their decision-making. In some decision-making contexts, particularly those that have a history of valuing carbon, such as the New York electric industry, alternative approaches may be more appropriate for both resource valuation and benefit-cost analyses.

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  • The Social Cost of Carbon Initative

    Researchers in this initiative are leading a team of distinguished economists and scientists to improve the science behind estimates of the social cost of carbon—the means by which the US federal government, state governments, and foreign governments account for climate change in their actions—through a process that ensures the highest levels of scientific quality and transparency and builds the scientific foundation for future estimates.

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  • Joint Comments to EPA on Climate Effects from Cross-State Air Pollution Rule

    In its proposal, Revised Cross-State Air Pollution Rule Update for the 2008 Ozone NAAQS, the Environmental Protection Agency’s (EPA) unreasonably low valuation of climate effects contributes to its selection of an inefficient policy alternative. Policy Integrity submitted joint comments detailing how EPA’s flawed analysis harms public health and the environment.

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  • Policy Integrity Comments to New York on the Value of Carbon

    New York’s landmark climate bill, the Climate Leadership and Community Protection Act, requires the New York State Department of Conservation (DEC) to adopt a value of carbon. In October 2020, DEC published draft guidance for New York State agencies on what value of carbon to use, focusing on the IWG’s 2016 Social Cost of Carbon estimates. Policy Integrity submitted comments supporting DEC’s decision to use a damage-cost approach and demonstrating why a 2% discount rate is an appropriate central discount rate for New York’s value of carbon estimates. Policy Integrity’s comments also address how DEC should address co-benefits, unquantified benefits, and distribution effects of policies and programs with greenhouse gas effects. Finally, the comments discuss several considerations and guiding questions for DEC if it chooses to move forward with a marginal abatement cost approach.

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  • Joint Comments to EPA on Airplane GHG Emissions Regulations

    The Environmental Protection Agency (EPA) proposed airplane pollution standards that have no effect on emissions and require no technological improvements. EPA does analyze one scenario in the technical support for the proposal, however, that appears to have modest greenhouse gas emissions reduction effects. But the agency improperly monetizes and weighs those reductions. Policy Integrity submitted joint comments that detail flaws in EPA’s analysis and describe how the agency can correctly apply the social cost of carbon.

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  • Policy Integrity Comments to Arizona on Integrated Resource Planning

    The Arizona Corporation Commission regularly requires that load serving entities (LSEs), which supply electricity to ratepayers, file plans with a 15-year time horizon disclosing environmental impacts from different resource mixes and how they will address those impacts. Policy Integrity’s comments encourage the Commission to ask that LSEs provide monetized estimates of the damages they expect to result from greenhouse gas emissions using the social cost of carbon.

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  • Making the Most of Distributed Energy Resources: Subregional Estimates of the Environmental Value of Distributed Energy Resources in the United States

    Distributed Energy Resources (DERs), like rooftop solar and battery storage, have the potential to generate significant social benefits by displacing pollution-emitting electricity generators. Accurately compensating DERs for this environmental and public health value, which some regulators and experts call the “E-Value,” is imperative for making the most out of DERs’ potential.

    This report provides a new set of hourly E-Values for the whole United States, broken down into 19 subregions, using an open-source reduced-order dispatch model. The patterns uncovered by these estimates can help policymakers design economically efficient DER policies to reduce air pollution from electricity generators.

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