In 2015, as part of the IWG response to the public comments received in the 2013 solicitation, the IWG announced a National Academies of Sciences, Engineering, and Medicine review of the IWG estimates (IWG 2015). Specifically, the IWG asked the National Academies to conduct a multi-discipline, two-phase assessment of the IWG estimates and to offer advice on how to approach future updates to ensure that the estimates continue to reflect the best available science and methodologies. The National Academies’ interim (Phase 1) report (National Academies 2016a) recommended against a near term update of the SC-CO2 estimates within the existing modeling framework. For future revisions, the National Academies recommended the IWG move efforts towards a broader update of the climate system module consistent with the most recent, best available science and offered recommendations for how to enhance the discussion and presentation of uncertainty in the SC-CO2 estimates. In addition to publishing estimates of SC-CH4 and SC-N2O, the IWG’s 2016 TSD revision responded to the National Academies’ Phase 1 report recommendations regarding presentation of uncertainty. The revisions included: an expanded presentation of the SC-GHG estimates that highlights a symmetric range of uncertainty around estimates for each discount rate; new sections that provide a unified discussion of the methodology used to incorporate sources of uncertainty; detailed explanation of the uncertain parameters in both the FUND and PAGE models; and making the full set of SC-CO2 estimates easily accessible to the public on OMB’s website.
In January 2017, the National Academies released their final report, Valuing Climate Damages: Updating Estimation of the Social Cost of Carbon Dioxide, and recommended specific criteria for future updates to the SC-CO2 estimates, a modeling framework to satisfy the specified criteria, and both near-term updates and longer-term research needs pertaining to various components of the estimation process (National Academies 2017). A description of the National Academies’ recommendations for near-term updates are described in Section 1.2 of this document. Shortly thereafter, in March 2017, President Trump issued Executive Order (E.O.) 13783 which called for the rescission and review of several climate-related Presidential and regulatory actions as well as for a review of the SC-GHG estimates used for regulatory impact analysis. E.O. 13783 disbanded the IWG, withdrew the previous TSDs, and directed agencies to ensure SC-GHG estimates used in regulatory analyses are consistent with the guidance contained in OMB’s Circular A-4, “including with respect to the consideration of domestic versus international impacts and the consideration of appropriate discount rates” (E.O. 13783, Section 5(c)). Benefit-cost analyses following E.O. 13783 used SC-GHG estimates that attempted to focus on the domestic impacts of climate change as estimated by the models to occur within U.S. borders and were calculated using two discount rates recommended by OMB’s Circular A-4, 3 percent and 7 percent.[1] All other methodological decisions and model versions used in SC-GHG calculations remained the same as those used by the IWG in 2010 and 2013, respectively.
On January 20, 2021, President Biden issued E.O. 13990, which re-established the IWG and directed it to ensure that USG SC-GHG estimates reflect the best available science and the recommendations of the National Academies (2017). The IWG was tasked with first reviewing the SC-GHG estimates currently used by the USG and publishing interim estimates within 30 days of the E.O. that reflect the full impact of GHG emissions, including by taking global damages into account. The E.O. instructs the IWG to develop final SC-GHG estimates by January 2022. Section 1.3 describes requirements established by E.O. 13990 in greater detail. In addition, the E.O. instructs the IWG to provide recommendations to the President by
- ↑ OMB Circular A-4 (2003) indicates that sensitivity analysis using lower discount rates than 3 percent and 7 percent may be appropriate where intergenerational effects are important. See Section 3 for further discussion.
