My latest at IER. How do you guys feel about my demonstration below? I think it’s pretty decisive, but then again, I’m presumably biased to like my own argument.
To avoid confusion, I’m not going to use indenting etc. The italicized block quote below is from Cass Sunstein, and then the rest is my reaction.
First established by the Barack Obama administration in 2010, the central value for the social cost of carbon, last updated in 2015, is now $36. That figure is set within a range from $11 to $105, meant to acknowledge scientific and economic uncertainty. (Disclosure: As administrator of the White House Office of Information and Regulatory Affairs, I was involved in the process.) The $36 figure has international resonance; many nations are paying attention to it. It also plays a large role in discussions about the size of any possible carbon tax.
Although Sunstein doesn’t seem to realize it, the above statements contain a shocking admission. The “scientific and economic uncertainty” surrounding the concept mean that the Obama Administration was reporting a range for the “social cost of carbon” going from $11 to $105. When journalists or others cite the point estimate of $36, that is simply the “central value” in the broader range. As Sunstein himself admits later in his article: “Any particular number will of course be highly controversial.”
That range is enormous if the “social cost of carbon” (SCC) is going to be the foundation of the cost/benefit analyses of regulations involving greenhouse gas emissions. What would the world need to look like for Sunstein (or the circuit judges) to agree with the petitioners, that the SCC is an arbitrary concept?
Things that are actually settled science do not exhibit such controversy. For example, this NASA page reports that the (equatorial) radius of the moon is 1,738.1 kilometers. Now that’s just a rounded estimate, of course. If we polled various astronomers and physicists, they might disagree slightly on the best figure to report for “the radius of the moon.” However, no reputable scientists would say, “Any particular moon radius reported is controversial, but we are confident the range of the true figure is between 531 kilometers and 5,069 kilometers.” Would that make you confident that the scientists had a good idea of how big the moon was? Note that I used the same ratio of lower and upper bounds to the “central value” that Sunstein used for the social cost of carbon.
Or take human population. Nobody knows for certain how many people are on planet earth right now, but surely the proper experts have a pretty good idea. This website for example says the figure is some 7.4 billion people. To repeat, this is obviously just an estimate, and various scientists might disagree with each other and the best figure to report. But surely they wouldn’t say, “To account for the uncertainty in our analysis, we will report a range for the total global population between 2.3 billion and 21.6 billion. This is settled science—we are really confident the human population is somewhere in that range.”
If a government agency issued that kind of statement—saying the global population was somewhere between 2.3 billion and 21.6 billion—after studying the matter, and then issued regulations and taxes costing trillions of dollars on the basis of these calculations, would you feel good about the process?
Of course not. Such huge disparities in the bounds would indicate that scientistsdon’t really have a handle on these issues. And by the same token, when Cass Sunstein proudly tells us that the Obama Administration thinks the social cost of carbon is $36 per ton, but that it issued a range of $11 to $105 because of the “scientific and economic uncertainty” (his phrase, not mine), that should be Exhibit A in the petitioners’ case.