The White House last week tweaked its Social Cost of Carbon (SCC) metric, asking federal agencies to factor in a price per ton of CO2 of $36 when making regulatory decisions involving GHG reductions.
The SCC – a range of price estimates the Obama Administration puts on the long-term damage of GHGs – has been in use since 2009, and in that time its base case price has ranged between $24 and $38.
In a July 2 blog post, the Office of Management and Budget said that to ensure the next update to the SCC “keeps up with the latest available science and economics”, it will seek independent expert advice on how to improve the estimates.
This will include many of the approaches suggested during a recent public consultation on the metric, it added.
“Specifically, we are asking the National Academies of Sciences, Engineering, and Medicine to provide advice on the pros and cons of potential approaches to future updates.”
The OMB in Nov. 2013 issued a request for comment on a set of updated SCC estimates and the methodology used to develop them. It received around 150 “substantive comments”, as well as some 39,000 letters expressing support for its efforts to establish a harmonised SCC.
In its report published last week, the OMB’s central case estimate for the SCC – calculated in 2007 dollars and based on a 3% average discount rate – was seen at $42 in 2020, $50 in 2030, and $69 in 2050.
This is the second straight reduction in the SCC. The White House in 2014 trimmed the price to $37/ton from its peak of $38.
Federal agencies previously developed their own SCC estimates using a plethora of methodologies, before the process was centralised in 2009.
US government auditors last year put their stamp of approval on the calculation method used by the OMB following a review.
By Mike Szabo – email@example.com