Social Cost of Carbon

Social Cost of Carbon: Identifying a Federal Entity to Address the National Academies’ Recommendations Could Strengthen Regulatory Analysis (Government Accountability Office, July 14th 2020, 88p)

The GAO,  a nonpartisan investigative office of the Congress’s, conducted this report in response to the Trump administration’s  move to assume substantially lower social costs of carbon emissions as the basis for relaxed environmental regulations. “To address climate change, some countries develop monetary estimates to assess the costs and benefits of government actions to reduce greenhouse gas emissions, including carbon dioxide.”

Goals of examinations:

  1.  How the federal government’s current estimates compare to its prior estimates and
  2. How the federal government plans to address the recommendations of the National Academies

The old and new calculated estimates for the social cost of carbon are using the same economic models. The “current federal estimates, based on domestic climate damages, are about 7 times lower than the prior federal estimates.” (former estimates under the Obama Administration)
The differences come down two changes in two key assumptions:

  1. The usage of domestic rather than global climate change damages
  2. Different discount rates (3 and 7 percent rather than 2.5, 3, and 5 percent).
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