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DOE’s Social Cost of Carbon Mischief (My Comment Letter in Support of Landmark Legal Foundation’s Petition)

by Marlo Lewis on September 17, 2013

in Features

Yesterday on behalf of the Competitive Enterprise Institute, I submitted a comment letter to the Department of Energy in support of the Landmark Legal Foundation’s petition to rescind or redo DOE’s final rule establishing first-ever conservation standards for microwave ovens in off and standby mode.

Maybe you didn’t know your microwave oven is destroying the planet when you’re not even using it! The only permanent cure for this problem would be to ban microwave ovens — along with dish washers, automobiles, and other appurtenances of modern life. But since DOE can’t do that, it will do the next best thing — put your appliances on a diet.

The energy savings from the standards will be HUGE! According to DOE (p. 36356), the standards will save 0.72 quads (quadrillion Btus) of energy during 2016-2045. For perspective, the U.S. consumes more than 97 quads annually. So over 30 years, DOE’s rule will save a whopping 75 thousandths of the energy the U.S. consumes each year. Don’t you feel better now? I do. When it comes to saving the planet, our government will leave no flyspeck unturned.

Why bother petitioning to rescind such small potatoes? Why bother submitting a comment letter on the petition?

The microwave rule sets a mischievous precedent. DOE inserted into the final rule the government’s new, higher social cost of carbon (SCC) estimates, and did so without subjecting those estimates to proper notice and public comment.

My comment letter develops the following points:

  • Inserting the administration’s revised SCC estimates into the final microwave rule without subjecting them to public notice and comment during the rulemaking was improper. 
  • SCC analysis all-too-easily becomes a pretext or excuse for expanding regulatory activism and increasing regulatory stringency. Indeed, that is its primary purpose.
  • Carbon’s alleged social cost is highly subjective, deriving from assumptions about inherently speculative issues such as climate sensitivity, how global warming will affect weather patterns, how climate changes will affect economic activity, and how adaptive capabilities will develop as climate changes. Uncertainties multiply through each stage of the analysis, enabling modelers to get pretty much whatever results they want.
  • Contrary to the popular “worse than we thought” mantra, the state of the climate is better than we’ve been told. Catastrophic scenarios are implausible; climate models predict more warming than is actually observed; the science on the key variable – climate sensitivity – is increasingly unsettled; there has been no long-term trend in hurricanes, droughts, floods, or tornadoes, or in properly-adjusted weather-related damages; and since the 1920s, global deaths and death rates related to extreme weather have declined 93% and 98%, respectively. The government’s SCC estimates should be going down, not up.
  • Flouting OMB best practices, the Inter-Agency Working Group inflated its SCC estimates by excluding calculations based on a 7% discount rate, and by estimating only the global SCC rather than the domestic SCC. 
  • Even if the Inter-Agency Working Group got the science and technical economics exactly right, its SCC analysis would still be one-sided (partisan), because it ignores the social cost of carbon mitigation. 
  • For all the foregoing reasons, DOE should re-propose the rule and invite specific comment on the revised SCC estimates and, more broadly, the appropriateness of using SCC estimates in regulatory development and benefit assessment.





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