• Revised: Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 (2013)

    While acknowledging the continued limitations of the approach taken by the interagency group in 2010, this document provides an update of the SCC estimates based on new versions of each IAM (DICE, PAGE, and FUND).

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  • Coal Royalties: Historical Uses and Justifications

    On January 15, 2016, the Department of the Interior (Interior) announced that it would begin a comprehensive review to identify and evaluate potential reforms to the federal coal program. The review will analyze issues including leasing of public lands for mining; how to account for the environmental and public health impacts of federal coal production; and how to ensure American taxpayers are earning a fair return for the private use of these public resources.

    Royalties have been used as a policy lever to influence behavior and meet national goals for centuries. For example, royalties have been set at specific rates in order to: encourage resource production; encourage westward expansion; maintain the incentive to create new inventions; and deter socially undesirable behavior, to name just a few. In line with this finding, this report concludes that it would be reasonable for Interior to adjust coal royalty rates to account for negative externalities that are not otherwise addressed by regulation. Historical uses, accepted economic justifications, legislative history, and examples of royalty use by private actors and in other industries discussed in the paper all support the determination that it would be reasonable for Interior to increase coal royalty rates to account for externality costs and to better align the federal coal program with national climate change priorities.

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  • Think Global: International Reciprocity as Justification for a Global Social Cost of Carbon

    U.S. climate regulations present a special case of federal agencies applying a global, rather than exclusively domestic, perspective to the costs and benefits in their regulatory impact analyses. Since 2010, federal agencies have emphasized global valuations of climate damages for policies that affect carbon dioxide emissions, using a metric called the “Social Cost of Carbon.” More recently, agencies have also begun to use a global valuation of the “Social Cost of Methane,” for methane emissions. Yet lately, these global metrics have come under attack in courtrooms and academic journals, where opponents have challenged the statutory authority and economic justification for global values. This paper defends a continued focus on the global effects of U.S. climate policy, drawing on legal, strategic, and economic arguments.

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  • Addendum to Technical Support Document on Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866

    The SC-CH4 and SC-N2O estimates presented in this addendum offer a method for improving the analyses of regulatory actions that are projected to influence CH4 or N2O emissions in a manner consistent with how CO2 emission changes are valued. The estimates are presented with an acknowledgement of the limitations and uncertainties involved and with a clear understanding that they should be updated over time to reflect increasing knowledge of the science and economics of climate impacts, just as the IWG has committed to do for SC-CO2.

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  • Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis (2016)

    The Interagency Working Group asked the National Academies of Sciences, Engineering, and Medicine in 2015 to review the latest research on modeling the economic aspects of climate change to inform future revisions to the social cost of carbon estimates presented in this technical support document. In January 2016, the Academies’ Committee on the Social Cost of Carbon issued an interim report that recommended against a near-term update to the social cost of carbon estimates, but included recommendations for enhancing the presentation and discussion of uncertainty around the current estimates. This revision to the TSD responds to these recommendations in the presentation of the current estimates.

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  • Assessment of Approaches to Updating the Social Cost of Carbon: Phase 1 Report on a Near-Term Update

    The social cost of carbon (SCC) for a given year is an estimate, in dollars, of the present discounted value of the damage caused by a 1-metric ton increase in CO2 emissions into the atmosphere in that year; or equivalently, the benefits of reducing CO2 emissions by the same amount in that given year. The SCC is intended to provide a comprehensive measure of the monetized value of the net damages from global climate change from an additional unit of CO2, including, but not limited to, changes in net agricultural productivity, energy use, human health effects, and property damages from increased flood risk. Federal agencies use the SCC to value the CO2 emissions impacts of various policies including emission and fuel economy standards for vehicles, regulations of industrial air pollutants from industrial manufacturing, emission standards for power plants and solid waste incineration, and appliance energy efficiency standards.

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  • Expert Consensus on the Economics of Climate Change

    We surveyed a large sample of economists — everyone who published an article related to climate change in a highly ranked economics journal since 1994. The survey focused on estimated economic impacts from climate change and appropriate policy responses. The results revealed consensus that climate change damages could be more severe and more immediate than previously estimated. Respondents also expressed support for aggressive policy responses to address climate change.

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  • Flammable Planet: Wildfires and the Social Cost of Carbon

    Climate change is expected to make wildfires more frequent and intense, with new areas facing wildfire risk. This could take a serious toll on the U.S. economy by expanding the area that wildfires burn 50 percent by 2050—and raising projected damages by tens of billions of dollars a year. This report surveys the scientific and economic literature on wildfires and climate change, and provides the first estimate of the future economic costs of wildfires that will be magnified by climate change. Currently these costs are omitted from the government’s social cost of carbon estimate. Flammable Planet lays the groundwork for the future inclusion of wildfire costs in the models that underlie the social cost of carbon.

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  • Omitted Damages: What’s Missing From the Social Cost of Carbon

    Fires, flooding, and infectious diseases are some of the risks of a warming climate, and they would cost trillions of dollars to deal with. When carbon-reducing regulations are considered, $37 per ton is used to account for the public costs of rising temperatures. But too many serious risks of climate change have not yet been included in the government’s estimate. Omitted Damages: What’s Missing from the Social Cost of Carbon reviews cutting edge scientific and economic research to determine which serious climate effects are not properly incorporated into the “social cost of carbon” estimates.

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