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twitter essay on Trump Executive Order related to the Social Cost of Carbon

posted Mar 29, 2017, 2:35 PM by Joel Wood   [ updated Mar 29, 2017, 2:36 PM ]

I am not sure why my google site won't let me embed the tweets properly. But here is my best Cass Sunstein impression from yesterday:


1/ Here is the text of the EO on Energy Independence & Econ Growth. Disbands IWG on Social Cost of Carbon & all their reports withdrawn https://t.co/nHxuRckjtt

— Joel Wood (@JoelWWood) March 28, 2017

2/ "...when monetizing the value of changes in GHG emissions resulting from regulations" instructed to be consistent w/ OMB Circular A-4

— Joel Wood (@JoelWWood) March 28, 2017

3/ I am currently reading OMB circular A-4 from 2003, available here: https://t.co/QMRHucU3wK

— Joel Wood (@JoelWWood) March 28, 2017

4/ OMBCircularA4 p15: "analysis shld focus on benefits & costs that accrue to citizens&residents of the US". SCC low w/ national standing

— Joel Wood (@JoelWWood) March 28, 2017

5/ "..choose to evaluate a regulation that is likely to have effects beyond the borders of the US these effects shld be reported separately"

— Joel Wood (@JoelWWood) March 28, 2017

6/ So in reference to the EO: Use US SCC in BCA, & then report results w/ global SCC separately in the BCA. Now on to discount rates...

— Joel Wood (@JoelWWood) March 28, 2017

7/ OMBCircularA4 p34: "For regulatory analysis...provide estimates of net benefits using both 3% and 7%" IWG estimates SCC @ 2.5%, 3% & 5%

— Joel Wood (@JoelWWood) March 28, 2017


8/ But: "If..important intergenerational benefits or costs...consider a further sensitivity analysis using a lower but (+)'ve discount rate"

— Joel Wood (@JoelWWood) March 28, 2017


9/ So in OMBCircularA4 there is clear justification for calculating SCC at 2.5% & 3% as IWG did; but wld also req using 7% rather than 5%

— Joel Wood (@JoelWWood) March 28, 2017


10/ It also indicates that national standing (US only SCC) shld be used for the main BCA calc: IWG made normative choice to calc global SCC

— Joel Wood (@JoelWWood) March 28, 2017


11/ Result: A US-only SocialCostofCarbon is a small fraction of the global SCC, & calculated at a 7% discount rate will be very very small

— Joel Wood (@JoelWWood) March 28, 2017
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