The Administration to Reconsider Flawed Carbon Policy

The Heritage Foundation’s Kevin Dayaratna and David Kreutzer report some good news on environmental policy.

The White House has stated that it will open its estimate of the social cost of carbon (SCC) for public comment. Administration officials who are responsible for this decision should be commended for recognizing the need to revisit this issue.

We at Heritage are proud to say that we contributed to this discussion. In particular, we closely examined the Environmental Protection Agency’s (EPA) statistical models for estimating SCC by rigorously examining their underlying assumptions as well as identifying a fundamental misspecification.

The SCC is used by some federal agencies to quantify the alleged economic impact of carbon dioxide emissions. To be clear, the models used to calculate the SCC are essentially useless, and any proposed and implemented policies and regulatory actions using the SCC are completely unjustified.

There are fundamental flaws with the “social cost of carbon” concept, which is based on flawed models and lends itself to harmful solutions, Heritage’s Nicolas Loris explained in a September comment to the Department of Energy.

The EPA analysts were very open to discussing the flaws in their models, Dayaratna and Kreutzer report, which is good news for those interested in factual analysis of environmental issues:

“There is no reason to think the misspecification in the EPA’s analysis was intentional or that it was an unprecedented or unconscionable error. In fact, the EPA modelers have been very open, collegial, and helpful. We have even used their models at Heritage.

Nonetheless, improperly specified models can mislead the public and misinform policymakers. A rigorous, public examination of such models helps inform everyone and leads to better decisions on potentially costly policies.“

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