Abby L. Harvey
GHG Monitor
8/29/2014
A sharp increase to the social cost of carbon estimate developed by an interagency working group has been attributed to updated academic models and new scientific data, the Government Accountability Office said in a report released this week. The GAO was asked by House Republicans to look into the working group’s development of the social cost of carbon, a dollar value calculated to reflect the effects of increased carbon dioxide emissions, after an updated version of the estimate was released in 2013 that was roughly 50 percent higher than previous estimates. The sharp increase raised public interest, according to the report.
The GAO, after questioning participants of the working group, found that the inclusion of new scientific data had caused the increased estimates. “The working group relied largely on existing academic literature and models to develop its estimates. Specifically, the working group used three prevalent academic models that integrate climate and economic data to estimate future economic effects from climate change,” the report says, further explaining that “after the academic models were updated to reflect new scientific information, such as in sea level rise and associated damages, the working group used the updated models to revise its estimates in 2013, resulting in higher estimates.” While the GAO reported on the process used by the working group to develop the social cost of carbon estimate, “GAO did not evaluate the quality of the working group’s approach,” the report says.
The working group was assembled to “develop a range of estimates of the social cost of carbon using a defensible set of modeling inputs based on existing academic literature,” the report says. Prior to the development of this estimate by the working group, some agencies had included various estimates of the social cost of carbon in their regulatory impact analyses, the GAO report says. However, these estimates were not consistent and lead to the establishment of the working group to rectify the issue. Since its inception in 2009, the group has released three estimates of the social cost of carbon. The first, the report says, was released in 2009 on an interim basis until the group could develop a final estimate, which was released in 2010 and updated in 2013. According to the GAO report, the working group consisted of representatives from several offices within the Executive Office of the President as well as federal agencies including the Environmental Protection Agency and the Departments of Energy, Agriculture, Commerce, Transportation and the Treasury. The group was led by the Council of Economic Advisors and the Office of Management and Budget.
The report states that “instead of being organized under a written agreement or other requirements, the working group was an informal interagency working group with no charter or other convening document. According to OMB staff, there was no requirement that the informal working group should document its activities or proceedings, including the meetings held or specific discussions that occurred at each. However, OMB staff and EPA officials stated that all major issues discussed during working group meetings are documented in the Technical Support Document and its 2013 update, which is consistent with the control activities standard in the federal standards for internal control.”
The GAO found, according to the report, that “the working group’s processes and methods reflected three key principles. First, the group used consensus-based decision making. Second, the group relied largely on existing academic literature and models, including technical assistance from outside resources. Third, the group took steps to disclose limitations and incorporate new information by considering public comments and revising the estimates as updated research became available.”
