In November, the Environmental Protection Agency announced the long-awaited release of draft updated values for the social cost of greenhouse gases. The social cost of carbon’s central value was updated from $51-per-ton to $190 (for emissions in 2020), consistent with similar trends in the economics and science literature. The Institute for Policy Integrity’s scholarship and analysis of these issues was cited dozens of times in the Draft Update, and EPA incorporated many of the recommendations that Policy Integrity provided in 2021.
In response to EPA’s request for public input on its Draft Update, we submitted three original comment letters. In a joint comment letter filed with nine other environmental groups, we:
- Commend EPA for faithfully implementing the roadmap laid out in 2017 by the National Academies of Sciences and applying recent advances in science and economics on the costs of climate change;
- Offer additional precedents supporting EPA’s consideration of climate damages on a global basis and its choice of discount rates, and explaining that the increased valuations are consistent with the federal government’s repeated acknowledgment that its existing valuations are underestimated; and
- Highlight that EPA’s draft valuations remain underestimated due to conservative modeling choices and omitted damages, and recommend that EPA further lower its short-term, risk-free discount rates to reflect the best available evidence (using a central rate of 1.5% with a range of 0.5–2.5%).
Policy Integrity filed two additional comment letters providing further detail on key recommendations from the joint letter. In one of those letters, we examine EPA’s economic choices in the Draft Update, providing further support for the use of lower discount rates and recommending that EPA better assess the literature on omitted damages and incorporate modeling updates as they become available. In the other letter, we offer extensive precedent for EPA’s consideration of climate damages on a global basis, explaining that agencies often consider the extraterritorial effects of their actions—including effects on international reciprocity, international cooperation, and transboundary spillovers.