Court Decision: Interim Social Cost of Greenhouse Gas Metric

Guest post by Roger Caiazza

Recently a federal district judge found that the Bureau of Land Management (BLM, sorry it was their acronym first) arbitrarily relied on an aggressively scaled-back social cost of greenhouse gases metric to justify a rollback of methane standards for oil and gas equipment.  This post summarizes the decision, the reaction of the trade press, and a discussion on the background of the issue.

Background

The General Accounting Office (GAO) published a report to Congressional requesters, Social Cost of Carbon: Identifying a Federal Entity to Address the National Academies’ Recommendations Could Strengthen Regulatory Analysis, that provides good background information on the current controversy regarding the valuation of greenhouse gas emission climate impacts used by Federal agencies.  The Social Cost of Carbon (SCC) is the metric most commonly used and represents the long-term net economic damages associated with an incremental increase in carbon dioxide or other greenhouse gas emissions in a given year.  In 2009, the Office of Management and Budget and the Council of Economic Advisers convened the Interagency Working Group on Social Cost of Carbon (IWG) to develop government-wide estimates of the social cost of carbon for federal agencies to use in conducting regulatory cost-benefit impact analyses for rulemaking.  The IWG issued updates to the Technical Support Document that included revised estimates of the social cost of carbon in 2013, minor technical corrections in 2015, and enhanced discussion of uncertainties around the estimates in 2016.

In 2016, the BLM promulgated a rule to reduce waste of natural gas from venting, flaring, and leaks during oil and natural gas production activities on onshore Federal and Indian leases.  The benefits out-weighed the costs primarily because the social cost of methane, same idea as the social cost of carbon, IWG values showed benefits.  On March 28, 2017, President Trump issued Executive Order 13783, “Promoting Energy Independence and Economic Growth,” directing the BLM to review the 2016 rule and, if appropriate, to publish proposed and final rules suspending, revising, or rescinding it.  An interim SCC value was prepared as part of the Executive Order  The BLM reviewed the 2016 rule and determined that it would have imposed costs exceeding its benefits based on the interim SCC values and on September 28, 2018 rescinded the rule after determining that it would have imposed costs exceeding its benefits.

The GAO report was prepared to explain the differences between the IWG values and the interim values.  It found “Although both the prior and current estimates were calculated using the same economic models, two key assumptions used to calculate the current estimates were changed: using (1) domestic rather than global climate change damages (see table) and (2) different discount rates (3 and 7 percent rather than 2.5, 3, and 5 percent). As a result, the current federal estimates, based on domestic climate damages, are about 7 times lower than the prior federal estimates that were based on global damages (when both prior and current estimates are expressed in 2018 US dollars and calculated using a 3 percent discount rate).” 

The litigation in question only focused on the adequacy of the Rescission, and not the 2016 Rule itself. In this regard, Judge Yvonne Gonzalez Rogers of the U.S. District Court for the Northern District of CA found “that the rulemaking process resulting in the Rescission was wholly inadequate”.  I am only going to focus on one aspect of the decision – the cost benefit calculation.  The Court analyzed whether BLM acted in an arbitrary and capricious manner in using a new model, the “interim domestic” social cost of methane, for its analysis in enacting the Rescission, instead of using the previous social cost of methane model that was developed and used for the 2016 rule.

Trade Press Reaction

The environmental trade press discussed the flaws Rogers used for her decision. Bloomberg Law said the judge “rebuked the Bureau of Land Management for eliminating Obama-era restrictions on releases of the potent greenhouse gas from oil and gas infrastructure on public and tribal lands” and that “Her opinion included a detailed assault on how the land agency used a metric called the social cost of methane, calling the approach ‘riddled with flaws’”.  The Hill quoted parts of the decision: “In its haste, BLM ignored its statutory mandate under the Mineral Leasing Act, repeatedly failed to justify numerous reversals in policy positions previously taken, and failed to consider scientific findings and institutions relied upon by both prior Republican and Democratic administrations” and “In its zeal, BLM simply engineered a process to ensure a preordained conclusion” In the decision’s conclusion she said:  “Where a court has found such widespread violations, the court must fulfill its duties in striking the defectively promulgated rule.”  Energy & Cleantech Counsel discussed the implications of the rejection of BLM’s redefinition of the social cost of methane on other rules.

The environmental activist trade press, not surprisingly, thought the decision was good.  One headline crows: Court Slaps Down Trump Administration’s Rollback Of Methane Rule and another article states “Since the first day they came into office, the Trump administration has sought and failed to undermine the Methane Waste Prevention Rule at every turn – in Congress, through the regulatory process, and in the courts. Today’s ruling shows their efforts are illegal, and provides for the reinstatement of common sense protections that are in the best interest of the American public,” said EDF senior attorney Rosalie Winn.”

Decision Rationale Discussion

In the Costs Exceeded Benefits section of the decision there is a sub-section giving the Court’s background description.  For this discussion, the following is the relevant text, absent footnotes and the legal references:

“In 2016, to estimate the benefits of reducing methane emissions, BLM drew upon the conclusions of an Interagency Working Group (“IWG”) founded under the Administration of George W. Bush. The IWG was specifically organized to develop a single, harmonized value for greenhouse gas emissions for federal agencies to use in their regulatory impact analyses for rulemaking under Executive Order 12866. The IWG’s approach, known as the social cost of greenhouse gases, estimates the present value of the damages caused from each additional ton of greenhouse gas emitted at a point in time, or conversely, the present value of the benefits from reducing a ton of greenhouse gas emissions. As the IWG stated in 2015, these damages must be considered globally “because emissions of most greenhouse gases contribute to damages around the world and the world’s economies are now highly interconnected.” This approach was developed over several years through robust scientific and peer-reviewed analyses and public processes, and represents the best available science on this issue. (Notably, federal agencies have relied on the IWG’s valuation of the impacts of greenhouse gas emissions in rulemaking since 2009, and courts have upheld this approach.”

Firstly, a clarification note.  This paragraph refers to the social cost of greenhouse gases rather than the social cost of carbon.  Carbon dioxide is not the only greenhouse gas and this regulation specifically addressed methane.  The IWG ”Addendum Valuing Methane and Nitrous Oxide Emission Changes in Regulatory Benefit-Cost Analysis” argues that using directly calculated societal cost values for methane and other non-CO2 greenhouse gases rather than global warming potential values (i.e. converting them to CO2 equivalents) is more appropriate. 

The simplistic argument that the social cost of greenhouse gases must be considered globally because it is a global problem overlooks the fact that the rationale for the IWG work was to evaluate costs and benefits of regulations in the United States.  The Federal requirements for these analyses all call for assessments based on national, not global impact. See, for example, discussion by Gayer and Viscusi.

The paragraph notes “This approach was developed over several years through robust scientific and peer-reviewed analyses and public processes, and represents the best available science on this issue”.  While this sounds impressive and scientific the reality is different.  In 2016, when the IWG was preparing their analyses, they noted that “new estimates of the social cost of non-CO2 GHG emissions have been developed in the scientific literature, and a recent study by Marten et al. (2015) provided the first set of published estimates for the social cost of CH4 and N2O emissions that are consistent with the methodology and modeling assumptions underlying the IWG SC-CO2 estimates”.

During the earlier iteration of the IWG work the US Environmental Protection Agency (EPA) realized that a social cost of gases other than CO2 were needed and found that there was a “paucity of peer-reviewed estimates of the social cost of non-CO2 gases in the literature”.  In response the EPA National Center for Environmental Economics developed estimates of the social cost of methane and nitrous oxide consistent with the methodology and modeling assumptions underlying the IWG SCC estimates.  Their work was published in two papers: Marten, A.L., and S.C. Newbold. 2012. Estimating the social cost of non-CO2 GHG emissions: methane and nitrous oxide Energy Policy 51: 957-972 (paywalled) and Marten, A.L., Kopits, E.A., Griffiths, C.W., Newbold, S.C., and A. Wolverton. 2015. Incremental CH4 and N2O Mitigation Benefits Consistent with the U.S. Government’s SC-CO2 Estimates. Climate Policy. 15(2): 272-298 (published online, 2014). (Paywalled)

I suspect that I am not the only one suspicious when an agency prepares a study that forms the basis of the regulatory metric proposed by other agencies.  I question the independence of the results in that approach.  Ultimately, the work and findings of agency work go through political appointees before they are released and there is no question that process motivates particular outcomes.  In anticipation of such cynicism the Addendum states:

“The methodology and estimates described in this addendum have undergone multiple stages of peer review and their use in regulatory analysis has been subject to public comment. With regard to peer review, the study by Marten et al. (2015) was subjected to a standard double-blind peer review process prior to journal publication. In addition, the application of these estimates to federal regulatory analysis was designated as Influential Scientific Information (ISI), and its external peer review was added to the EPA Peer Review Agenda for Fiscal Year 2015 in November 2014. The public was invited to provide comment on the peer review plan, though EPA did not receive any comments. The external peer reviewers agreed with EPA’s interpretation of Marten et al.’s estimates; generally found the estimates to be consistent with the approach taken in the IWG SC-CO2 estimates; and concurred with the limitations of the GWP approach, finding directly modeled estimates to be more appropriate. All documents pertaining to the external peer review, including a white paper summarizing the methodology, the charge questions, and each reviewer’s full response is available on the EPA Science Inventory website.”

I had no idea that the EPA Science Inventory website existed so I looked up this reference. According to the peer review plan: a contractor picked three reviewers, the public, including scientific or professional societies was not asked to nominate peer reviewers, no public nominations were allowed through the Peer Review Agenda, the Agency did not provide significant and relevant public comments to the peer reviewers before they conducted their review, the review was not a public panel, and public comments were not allowed at the panel review.  The fact that no comments were received from the public suggests that this was not well publicized and I am annoyed that the papers are paywalled when my tax dollars paid for the work.  Having to pay for the privilege to review their work is not inclusive.

EPA asked the three external reviewers recommended by a contractor to provide comments: Karen Fisher-Vanden, Professor of Environmental and Resource Economics, Director, Institute for Sustainable Agricultural, Food, and Environmental Science (SAFES), and Co-Director, Program on Coupled Human and Earth Systems (PCHES) at Penn State College of Agricultural Sciences; John Reilly, Senior Lecturer, Sloan School of Management and Co-Director, MIT Joint Program on the Science and Policy of Global Change at the Massachusetts Institute of Technology; and Steven Rose, Energy and Environmental Analysis Research Group, Electric Power Research Institute.  All three are well-qualified to review the work but I have this nagging concern that the reviewers from academia would be reluctant to provide negative feedback lest it affect review of future funding.

The request for peer review focused on the mechanics of vetting the Addendum.  The Science Inventory includes a peer review report that describes the process.  EPA developed a white paper, Valuing Methane Emissions Changes in Regulatory Benefit-Cost Analysis, that described the problem, the two different approaches for estimating societal valuation of impacts, the limitations of the global warming potential approach (GWP), and then developed its estimate of the direct estimation social costs.  The reviewers were asked seven questions about the white paper and the primary Marten et al. reference.  The peer review report includes the responses from the three reviewers and concludes with a summary and response description: 

“EPA recently conducted a peer review of the application of the Marten et al. (2014) non-CO2 social cost estimates in regulatory impact analysis (RIA). Three reviewers considered seven charge questions that covered issues related to the EPA’s interpretation of the estimates, the consistency of the estimates with the social cost of carbo estimates used in RIAs, EPA’s characterization of the limits of the alternative GWP approach to approximate the social cost of non-CO2 GHGs, and the appropriateness of using the Marten et al. estimates in RIAs. The reviewers agreed with EPA’s interpretation of Marten et al.’s estimates; generally found the estimates to be consistent with the social cost of carbon estimates; and concurred with the limitations of the global warming potential approach, finding directly modeled estimates to be more appropriate.”

Judge Rogers claimed that the approach used was “developed over several years through robust scientific and peer-reviewed analyses and public processes”.  I do not accept that the social cost of methane developed by one group, published in two papers, and peer-reviewed by three people is robust science. 

If you are interested in the social cost of GHG emissions metric, the peer review report is a worthwhile read.  It explains the metric and problems well and the comments from the experts indicate that there are significant issues that need to be resolved. 

Conclusion

When judges make decisions based on the “science”, the results generally reflect more their biases than the science itself.   The opinion by Judge Rogers reversed the recission because it “failed to consider scientific findings and institutions relied upon by both prior Republican and Democratic administrations” and “In its zeal, BLM simply engineered a process to ensure a preordained conclusion.”  Based on a review of the specific scientific findings used to develop the social cost of methane the same conclusions could be said for the metric developed by the IWG.

The bigger problem in my opinion, is an inappropriate reliance on peer review in the regulatory process.  Peer review focuses on the veracity of a specific scientific problem.  Even if the validity of the analysis is not subject to the value judgements of the use of certain parameters and assumptions, peer review does not address the needs of the public affected by the regulation.

The social cost of greenhouse gas emissions is a particularly important metric for any emission reduction program related to global warming.  Although there have been some attempts to describe the parameter and how it is used, the thing that is missing is an explanation of the impacts of the input parameters for the layman.  Consider the choice whether the benefits should be considered globally or nationally.  While climate change is a global problem, I am sure the public generally does not understand that the money that they have to spend for emission reductions provide minimal direct benefits to themselves or their families because most of the benefits are elsewhere on the globe.  I am positive that they don’t understand that the calculations of the benefits extend out 300 years and that the majority of expected benefits occur in the later years.  Surely there is a limit to how much they would be willing to pay for such a low payback on their investments?

Roger Caiazza blogs on New York energy and environmental issues at Pragmatic Environmentalist of New York.  This represents his opinion and not the opinion of any of his previous employers or any other company he has been associated with. 

36 thoughts on “Court Decision: Interim Social Cost of Greenhouse Gas Metric

  1. Water vapor 17,000ppm
    Methane 1.7ppm
    Because the wavelengths reflected by water vapor and methane are almost identical, an increase in methane makes almost no difference.

    • These judges are a real embodiment of science. All funding for science should be diverted to the judicial branch.

      While science by its very definition fosters doubt, judicial decisions leave no room for doubt. Or else …

  2. The “social cost of methane” or indeed the social cost of any GHG is a total fantasy based on a Big Lie.
    The social cost of CAGW Alarmism, on the other hand, is very real, and very high.

    • “The “social cost of methane” or indeed the social cost of any GHG is a total fantasy based on a Big Lie.”

      That’s the heart of the matter.

      From the article: “The Social Cost of Carbon (SCC) is the metric most commonly used and represents the long-term net economic damages associated with an incremental increase in carbon dioxide or other greenhouse gas emissions in a given year.”

      What damages? That’s the fantasy and the Big Lie. There is no evidence for damages from greenhouse gases, now or in the future. This is completely made up out of thin air as a justification for regulating greenhouse gases. No science involved whatsoever. It’s pure science fiction.

      Show me some damage caused by greenhouse gases, other than the damage done to society from the demonization of greenhouse gases.

      • Remember, the SCC is whatever you want it to be. Just turn that control knob labeled “Discount Rate.”

        • Exactly – something pointed our clearly and early when Monckton brought the SCC to the attention of readers here.

          “In its zeal, BLM simply engineered a process to ensure a preordained conclusion”

          Ya think? Where have we seen that before?

          As I recall, the SCC value was first proposed by a paper originating inside the EPA with little to no supporting evidence – a broad set of speculations. There followed a second paper from the EPA citing the first as if it’s speculations were real, giving a positive and definitive view if it was acceptable. Thereafter multiple papers cited the second EPA paper citing the obscure and unjustified first paper and presto: the social cost of carbon was established as $43 per ton of CO2. Not a ton of carbon, you understand, it was just mis-named.

          This is science by assumptions and cite-o-ology as a form of policy development.

  3. The ‘social cost of Methane emissions’ is in the same catagory as ‘how many pixies fit on a pinhead’.

  4. Thanks very much for the post Mr. Caiazza. I appreciated your clear writing and particularly the logical progression.

  5. This fantasy is way beyond the capacity of Orwell, Carroll, Swift … These perpetrators have disappeared up their respective fundaments most spectacularly.

  6. Idiots. The social benefits of fossil fuels outweigh the social costs of fossil fuels by orders of magnitude.

    If you are willing to reduce the population of the planet by billions and go back to a middle ages lifestyle, you can get rid of fossil fuels. The vast majority of humanity would be much much worse off. The environment would not even benefit.

    Most people can’t even imagine the crushing drudgery of a third world lifestyle. Squatting over a dung fire and breathing toxic fumes every day of their adult life, just to be able to eat enough to barely survive.

    • “Willing”? They are eager for us to go back to the Middle Ages lifestyle. For us to go back, I mean, not for them.

      • That is the classic stupidity of the current situation, there is no way China or Russia are ever going to do that and there people have no say. Yet we have activist groups utilizing freedoms and legal rights only granted to them in western democracies to attempt to weaken and destroy that same system.

    • But if being “… willing to reduce the population of the planet by billions and go back to a middle ages lifestyle …” is the object of the exercise, what then?

      • Soon they have to include in the “benefits column” the human activities that keep the next ice age at bay. Ice ages are no doubt aggravated by the positions of the continents. Perhaps a cure for all ice ages would be to tilt the whole lithosphere 20 degrees and have the poles permanently warmed by tropical ocean currents. Then we can put an end to trying to balance the distribution of solar energy to provide white Christmases at 50 degrees North. Oh wait, that’s racist. Snow, I mean.

        Did y’all know that there is an international body called the International Cryosphere and Climate Initiative (ICCI) devoted to ending the emission of Black Carbon (BC) because it deposits on snow making it black? They are intent on exterminating black snow from the face of the earth. I met them in Poland. Fanatics. I am wearing a new T-shirt: Black Snow Matters: black letters on a white background.

        [Shouts: “Will someone please find a non-racist name for Black Carbon!]

        As for methane, when a proper inventory is produced, including the seeps off the E coast of the USA, the piddling % contributions from the oil and gas sector will pale into insignificance. The social cost is nil and the net cost is negative.

  7. And I notice they never so much as even mention the social cost of space alien abductions and experimentation. Hmmmm……

  8. the thing that is missing is an explanation of the impacts of the input parameters for the layman.

    Yes, exactly how much is methane on course to run up global temperatures?

    The other day on these pages there was this link:
    METHANE AND CLIMATE by W. A. van Wijngaarden and W. Happer
    http://co2coalition.org/wp-content/uploads/2019/11/MethaneClimate_WijnGaardenHapper.pdf

    From the abstract:

    The net forcing from CH4 and CO2 increases is about 0.05 W m−2 year−1. Other things being equal, this will cause a temperature increase of about 0.012 C year−1. Proposals to place harsh restrictions on methane emissions because of warming fears are not justified by facts.

  9. An off-topic question for Roger Caiazza. What is your assessment of the near-term, the mid-term, and the long term impacts of shutting down the two Indian Point reactors?

    My own opinion is that New York can get by for now without Indian Point. However, the situation in a decade or so won’t be nearly so rosy unless power can be imported from Pennsylvania and from Canada.

  10. Beta Blocker

    For a Governor that believes that climate change is an “existential” threat the closure of 2000 MW of CO2-free generation close to New York City has to be one of the most hypocritical acts of his administration. In my latest post, Indian Point Closure Update – May 2020, on the implications of Indian Point shutdown I showed that the plant provided 12% of the state’s power!

    I agree with you that the state can get by without it for a while. I think it is pure fantasy to think that the replacement power is carbon-free as was claimed by the activists who supported the closure. The bigger problem, of course, is just getting the power and I agree this will be interesting to watch over the next decade.
    The ultimate problem is that there are limits to how much power can be imported to the New York City load pocket without risking reliability issues. No one has shown how diffuse and intermittent renewables can meet the in-city generation criteria for reliability which were implemented after the 1977 blackout.

    My guess in the near-term is optimistic for power supply but GHG emissions will increase, in the next ten years I am not optimistic about cost-effective power supply, and in 2040, when all of he electric power is supposed to be GHG emission free, I am confident that it won’t work without tremendous costs and maybe not even then.

    • Thanks for the response. I have close relatives in both New York City and in the Bay Area of California. They’ve all been bamboozled by the wind/solar/battery hype and they support the closure of Indian Point and Diablo Canyon, respectively.

      Cognitive dissonance is all powerful among them. Being somewhat pessimistic here, it’s not even certain that a series of 1977-like power blackouts in both cities could force them to confront their tightly held delusional beliefs about the renewables.

      • Not one of my industry contacts thinks that the delusional beliefs will be changed by anything other than a catastrophe. But as you say, it is not clear that a blackout catastrophe would be enough to make them change. One thing though is a blackout in New York City is not the same as a loss of power anywhere else in the state. Even a job in energy costs may not be enough but I hope that when that happens that the residents will rebel and vote the clowns who passed this legislation out.

  11. I had to look up what field actually created the a thing called “social cost” … answer Neoclassical economics.
    The interesting thing that struck me when walking thru it and the implementation into the legal system was the underlying problem of how do you cost it which leads to that exact discussion on wikipedia.
    https://en.wikipedia.org/wiki/The_Problem_of_Social_Cost

    The interesting observation “hence courts should be guided by the most efficient solution”.

    Now there is no way Emission Control is not the most efficient solution to CO2 emissions it is just the one preferred by the green and lefttards because it brings about wealth re-distribution. Even building a pile of nuclear reactors has to be more cost effective then emission control. So in the unlikely event emission control ever did become more than a lefty wet dream it would be interesting to see challenges on it for exactly that reason.

  12. Thanks for the fine post Roger Caiazza.

    Not sure if these imbeciles ever learned basic accounting.

    They calculate SCC (Social Cost of Carbon), but they also need to add SBC (Social Benefits of Carbon), which is most prevalent within forestry and agriculture.

  13. It seems to me that to be really fair, judge Yvonne Gonzalez Rogers, needs to vacate her recent ruling and order a reanalysis of the Social Cost of Carbon (SCC), particularly as relates to methane emissions that are key to this litigation, based on the recent worldwide impacts of the COVID-19 pandemic on fossil fuel use, emissions and associated “costs” of such.

    You see, a given study’s economic conclusions can become invalid quite rapidly as the world’s economies evolve. Just look at recent wild swings in the price of commodities, such as oil, in the international markets.

    Of course, I have no reason to believe that judge Rodgers would have cause to be this objective and fair.

  14. Here cum da judge! It’s just like tobacco. Sorry, but this time leftists have hijacked science to attack the fossil fuel industry for nothing. Tobacco smoke is indeed carcinogenic, but atmospheric CO2 is harmless. Get off out backs!

    How many millions of tons of CO2 are being pumped into the atmosphere annually? Just imagine the cost! You must pay up!

    I don’t need to imagine it. It’s ZERO. CO2’s absorption/emission wavelength of 15 microns is composed of -80C photons, which are way outside the range of Earth’s surface temperatures (-50C to +50C). Every photon has an energy that’s inversely proportional to its wavelength. When it is absorbed by a material, it imparts that energy to the material as kinetic energy, which is also known as temperature. 15 micron photons can’t raise the temperature of a material higher than -80C, no matter their concentration. In contrast, photons from the Sun are at 5800K (5500C). Usually the Earth’s surface has so many cooling processes that sunlight can’t raise the temperature higher than +50C, but a large field of mirrors collecting sunlight and concentrating it to a single point might reach a temperature near 5500C. -80C is about the temperature of dry ice, and no matter how big a field of dry ice, it can’t raise the temperature of anything above -80C.

    So CO2 emissions are no threat to global temperatures. Cold isn’t heat. Cold can’t heat anything. Even if the current atmospheric CO2 concentration of 0.04% were 0.4% or 4% it can’t cause global heating. If a new ice age comes, hold onto your dry ice. Only zany leftists can turn cold hot and hot cold to get their hands on cold cash.

    It’s really that simple. Tell your friends about my killer essay disproving CO2 global warming with pure physics:

    http://www.historyscoper.com/thebiglieaboutco2.html

  15. Estimating the “social costs” (a term for estimating the costs and benefits) of an action taken by government has been a central part of rational analysis of government decisions for upwards of 50 years. It has been legally required under Executive Order 12866 and predecessors for all major regulations of the executive branch of the federal government since the Reagan Administration. The problem with the “cost of carbon” estimates produced by the Obama Administration is that they are fatally flawed through deliberate biases that were not openly admitted or corrected even after critics pointed them out. They were neither objective nor honest. The Trump Administration should have corrected and replaced them by estimates correcting all their flaws but took the easy path of deciding to make two corrections that many economists would not have agreed were sensible and ignoring the more fundamental problems. Most notable of these were that these estimates did not explicitly allow for the benefits of CO2 emissions in Agriculture or through the “greening” of the planet (with a partial exception for agriculture in one of three models that were averaged to obtain the finished product), used absurd judgmental estimates of massive environmental harms (instead of benefits), used absurd estimates of human health costs, and made absurd assumptions about future economic and world population growth and energy investments that vastly exaggerated future CO2 emissions and resulting harm. The judge’s decision demonstrated her economic illiteracy and ignorance of either the content or biases of these estimates, as well as her own biases. Better estimates of the “cost of carbon” would show those costs to be minor, or possibly even slightly positive when including benefits as well as costs, reasonable estimates, and realistic models . There is a considerable economic literature on the fatal flaws of the Obama estimates as well as the problems involved in creating better estimates. One good starting point is the following article by Robert Pindyck: https://www.heartland.org/_template-assets/documents/publications/regulation-v36n2-1-2.pdf.

  16. The Clean Air Act and amendments doesn’t list methane as a pollutant that the EPA is required to regulate. And the Constitution doesn’t give the Executive Branch authority to make law (“rules and regulations”). That power lies solely with Congress. If Congress didn’t make a law regulating law, the EPA can’t legally regulate it. Case closed.

  17. Roger, please consult the work of Richard Tol, which leads on this topic from the economics field. Generic problem with the others is that it takes output of climate models as well-founded.

    See The Economic Impacts of
    Climate Change
    Richard S. J. Tol*
    Review of Environmental Economics and Policy, volume 12, issue 1, Winter 2018, pp. 4–25
    doi: 10.1093/reep/rex027

  18. Yes, this 2018 Tol article is excellent and balanced–strongly recommended. It is remarkably restrained given the absurdly high estimates of climate damages in most of the reviewed studies. For example, Tol correctly points out that malaria is a disease we can eliminate with current remedies, yet most of the studies of carbon costs assume massive damage to human health from increases in malaria and other tropical diseases. (In fact, we are well on the way to a malaria-free world, with the annual death toll from malaria cut in half in the last two decades.)

    A decade ago and now dated (for example, before the “global greening” from CO2 fertilization was known), Tol’s model estimating the social cost of carbon was the only one of the three averaged by the Obama Administration even to allow for any benefits of any kind from CO2 emissions growth. And even Tol’s estimates assumed that there would be substantial damages in various categories of effects beyond agriculture. That said, Tol is an excellent and neutral economist, with scrupulous attention to the actual science.

    I’d also recommend Bjorn Lomborg’s just-published book “False Alarm.” Lomborg does not estimate the cost of carbon and simply (and cleverly) accepts high estimates while making his broader point that even high estimates of total projected damages are actually quite small compared to future world economic output, but does an excellent job of skewering many of the ridiculous damage claims.

    Both Tol and Lomborg accept uncritically the William Nordhaus estimates of costs, not surprisingly given that Nordhaus won the Nobel prize in Economics for his work on climate change and is the most respected elder in the field. Of the three models used in the Obama Administration estimates, the one by Nordhaus came closer to the Tol estimates than the third (and in my view, ridiculously biased) model’s estimates. That said, Nordhaus’ estimates are largely judgmental rather than science-based, obsolete (no mention of “global greening”, for example), and in my view substantially exaggerate likely costs by accepting uncritically high “guesstimates” of environmental, health, and other cost categories.

    Yet another good source on the topic of likely real-world costs is the newly published “Apocalypse Never” book by Michael Shellenberger. Shellenberger is no scientist but is a good student and like Lomborg has carefully studied a prodigious number of studies on all the key topics. Like Lomborg, he is willing to skewer bad or biased estimates of particular categories of climate costs.

    Both Lomborg and Shellenberger address journalistic errors in mis-reporting and exaggerating or falsifying cost estimates frontally and forcefully. Tol is more restrained and reviews only the academic literature.

  19. This is a terrific post and I very much appreciate the insights provided on the benefits and “hazards” of using SCC and SCM “values” without truly understanding how these are derived and the limits/pitfalls of just applying single numbers created by study team created by political agencies. When Barack Obama and John Holdren chose to reevaluate the 2010 version of the SCC the result was an increase in the SCC of carbon for all cases (discount rates of 2.5%, 3%, 5%, and 3% – 95% percentile) by 60% across the board – a) for all cases b) for all years through 2050. This is a result of expansion of the assumptions to create the desired end result. I wanted to include in this reply but do not know how to insert figures into WUWT post – can someone kindly provide a link that describes how to do this.

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