HOUSE BILL WOULD REQUIRE SCC ESTIMATES TO UNDERGO PUBLIC REVIEW

Tamar Hallerman
GHG Monitor
7/3/13

A House Republican has introduced a measure that would require the White House to accept public comment on recent changes to its social cost of carbon estimates. Rep. Duncan Hunter (R-Calif.) introduced the “Cost-Benefit and Regulatory Transparency Enhancement Act” earlier this week, legislation that would require the Office of Management and Budget to release all cost-benefit or regulatory impact analyses on potential regulations for 60 days of public comment and Congressional review prior to implementation. “This is a process that needs to be more open and transparent, and this legislation will guarantee adequate time and opportunity for congressional and public review,” Hunter said in a statement.

Hunter said the additional disclosure requirement was aimed at the Obama Administration’s changes to its social cost of carbon (SCC) estimates, which were included in new efficiency standards for microwave ovens earlier this summer and did not undergo public comment. “The social cost of carbon has significant implications on rule making and this calculation could be revised and even manipulated to make cuts in emissions appear more or less valuable in any cost-benefit analysis,” Hunter said. “Tucking the latest social cost of carbon calculation into an unnoticed rule on microwave ovens raises questions about intent, given that the calculation could be used to justify specific actions supported by the Administration.”

Gov’t Ups Estimates, Citing New Data

Released May 31, the SCC revisions boost the government’s estimates for the future social and economic costs of emitting a tonne of carbon. The updated estimates find that in 2007 dollars at a 3 percent discount rate—the median estimate listed—the social cost of carbon will be $43 a tonne in 2020 and $71 in 2050. That is compared to the previous $26.30 figure the government used for the year 2020 and $44.90 for 2050. The interagency panel that reviewed the estimates said the increased SCC estimates reflect the increasing impact of climate change and updated assumptions for factors like sea level rise and adaptation.

Government agencies use SCC figures while performing cost-benefit analyses during the federal rulemaking process, and the changes could have an impact on upcoming regulations on carbon pollution rules from EPA. Since the updated SCC figures increase the value of future carbon emissions avoided, a rulemaking clamping down on CO2 emissions from the power sector, such as the EPA’s proposed greenhouse gas emissions performance standards for new fossil plants, would subsequently have higher benefits listed, making it easier for such standards to clear a cost-benefit analysis.

The standards have long been points of contention for both sides of the climate change debate. While high-profile multinational and environmental groups like the Intergovernmental Panel on Climate Change and the Natural Resources Defense Council have argued that the SCC values assigned from the government studies are not high enough, conservatives and pro-business groups have said the values overestimate the damage potential of climate change and are too economically burdensome. A group of Senate Republicans challenged the new estimates last month, arguing that the new figures were devised behind closed doors to advance the President’s regulatory agenda. In a letter to the heads of the Department of Energy, the Environmental Protection Agency and OMB, the lawmakers said the changes benefit the President’s plans to regulate greenhouse gas emissions from the power sector, while disincentivizing projects favored by Republicans like the Keystone XL pipeline. They asked for the interagency working group in charge of calculating the revised estimates to provide clarity about the process and underlying data used for determining the new SCC values. “This is a significant change to an already highly controversial estimate, and as such requires transparency, open debate and an adherence to well-understood and previously agreed-upon rules,” the group of lawmakers, headed by Senate Environment and Public Works Committee Ranking Member David Vitter (R-La.), wrote.