On November 1, 2013, the White House released updated values for the “social cost of carbon” (SCC) to be used by various agencies when evaluating the benefits of emissions regulations, energy efficiency standards, renewable fuel mandates, technology subsidies, and other policies intended to mitigate global warming. Use of a uniform SCC reflects an effort to bring some consistency to a vast portfolio of different policies aimed at reducing carbon emissions from sources ranging from power plants, to cars, to household products.

Perhaps more significant than the updated SCC values themselves is the administration’s commitment to seeking public comment on them. Until now, despite President Obama’s commitment to “creating an unprecedented level of openness in Government,” the administration has rebuffed requests to subject the SCC and its underlying models and assumptions to public scrutiny.

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President Obama has publicly committed to addressing climate change through an ambitious regulatory agenda, to be undertaken by multiple federal agencies using a wide range of existing statutory authorities. While the merits of this climate agenda as a whole are debatable, the use of a unified SCC makes sense. The SCC summarizes into a single number (more properly, a range of numbers) a vast array of information derived from scientific and economic research and modeling. All of this information is subject to disagreement and the relationships embedded in the calculation of the SCC are extraordinarily complex, presenting a daunting challenge to anyone trying to arrive at a consensus figure. (See “Pricing Carbon When We Don’t Know the Right Price,” Summer 2013.) Nonetheless, it is worthwhile to try. To the climate, all carbon dioxide molecules look alike, so any cost‐​effective collection of carbon‐​reduction policies must have the same implicit marginal cost. The use of a consistent set of SCC values government‐​wide can discourage government agencies from trying to outbid each other in their efforts to save the planet, resulting in inefficient policy choices.

Need for comment / The influential nature of the SCC value for a variety of future policies, as well as the difficulties and uncertainties of calculating the SCC, demand conscientious attention—including public comment and peer review—to the task of getting it right. Should benefits to other nations be included in the value? What is the appropriate discount rate for considering effects that may occur far in the future? What effects do different economic models and assumptions have on SCC values?

Rather than encouraging a robust discussion of these many important questions, last May the Obama administration quietly released a revised SCC as a “technical support document” (SCC-TSD) produced by an interagency working group. The Department of Energy relied on this revised SCC a month later to support a final regulation setting standards for microwave ovens. The May 2013 SCC of $41.1 per metric ton of carbon dioxide, which is almost double the value of $22.3 per metric ton that the DOE had used in its proposed rule, caused the department’s estimate of the standard’s benefits to increase by $438 million. The Landmark Legal Foundation petitioned for reconsideration, objecting that by making this change without providing the public an opportunity for comment, the DOE violated the Administrative Procedure Act, which has governed regulatory practice for over 65 years. The DOE subsequently sought comment on how it should respond to the petition.

We filed a comment with the DOE encouraging the government to solicit public comment and peer review on the updated SCC before incorporating it into rulemaking. Both the SCC-TSD and the DOE’s decision to incorporate this highly influential scientific finding into its final microwave rule without the benefit of public comment lacked not only the transparency urged by the president, but procedures required by longstanding legislative and administrative directives.

President Obama has “committed to creating an unprecedented level of openness in Government” and identified three principles to achieve that commitment: transparency (which “promotes accountability by providing the public with information about what the Government is doing”), participation (which “allows members of the public to contribute ideas and expertise”), and collaboration. By releasing the SCC as a final decision in a “technical support document” and incorporating it in a final rulemaking without the opportunity for public comment, many objected that the administration not only disregarded those principles and undermined the president’s commitment to open government, but violated the Administrative Procedure Act and established administrative policies.

The May SCC revision raised the estimated social cost of U.S. carbon dioxide emissions by about $100 billion per year. If the United States were using a carbon tax to address climate change, this would amount to a trillion‐​dollar tax increase over the next decade. Instead, that trillion dollars will be placed on the scale of cost‐​benefit analysis, weighing in favor of expanded regulation by the DOE, the Department of Transportation, the Environmental Protection Agency, and all of the other federal agencies engaged directly or indirectly in climate policy. The implications for the economy are troubling, particularly since—assuming they are real—few, if any, of those climate benefits will accrue to the United States.