Refining Estimates of the Social Cost of Carbon
As part of our ongoing effort to measure the impact of reducing carbon emissions, today we are issuing updated values for the Social Cost of Carbon (SCC), which are used to estimate the value to society of reducing carbon emissions. These updated values reflect minor technical corrections to the estimates we released in May of this year. For example, these technical corrections result in a central estimated value of the social cost of carbon in 2015 of $37 per metric ton of carbon dioxide (CO2), instead of the $38 per metric ton estimate released in May.
At the same time, in response to public and stakeholder interest in SCC values, OMB’s Office of Information and Regulatory Affairs (OIRA) will provide a new opportunity for public comment on the estimates in addition to the public comment opportunities already available through particular rulemakings. Details on this public comment process will be published soon in the Federal Register.
The estimate of the SCC has been developed over many years, using the best science available, and with input from the public. Rigorous evaluation of costs and benefits is a core tenet of the rulemaking process. It is particularly important in the area of climate change, which is already imposing tangible costs through impacts that include an increase in prolonged periods of excessively high temperatures, more heavy downpours, an increase in wildfires, more severe droughts, permafrost thawing, ocean acidification, and sea-level rise.
In February 2010, after considering public comments on interim values that agencies used in a number of rules, an interagency group of technical experts, coordinated by OMB and the Council of Economic Advisers (CEA), released improved SCC estimates. The interagency group estimated the improved SCC values using the most widely cited climate economic impact models. Those climate impact models, known as integrated assessment models, were developed by outside experts and published in the peer-reviewed literature. Recognizing that the models underlying the SCC estimates would evolve and improve over time as scientific and economic understanding increased, the Administration committed in 2010 to regular updates of these estimates.
In May of this year, after all three of the underlying models were updated and used in peer-reviewed literature, and agencies received public comments urging them to update their estimates, the interagency group released revised SCC values. The May 2013 estimates reflect values that are similar to those used by other governments, international institutions, and major corporations. Those estimates have been out for public comment in several proposed rulemakings since May, and agencies have already received comments that are under review.
The technical corrections to the May SCC values that we are issuing today represent the best available science and data on the economic impacts on society of climate change. We will continue to work to refine these estimates to ensure that agencies are appropriately measuring the social cost of carbon emissions as they evaluate the costs and benefits of rules.
Howard Shelanski is Administrator of the Office of Information and Regulatory Affairs at the Office of Management and Budget.