- population, bearing in mind potential correlation between economic and population projections. Then using expert elicitation, guided by information on historical trends and emissions consistent with different climate outcomes, project emissions for each forcing agent of interest conditional on population and income scenarios. Additional recommendations were offered for improving the socioeconomic module centered on four broad criteria: time horizon, future policies, disaggregation, and feedbacks.
- Climate science: Adopt or develop a simple Earth system model (such as the Finite Amplitude Impulse Response (FaIR) model) to capture relationships between CO2 emissions, atmospheric CO2 concentrations, and global mean surface temperature change over time while accounting for non-CO2 forcing and allowing for the evaluation of uncertainty. It also recommended the IWG adopt or develop a sea level rise component in the climate module that: (1) accounts for uncertainty in the translation of global mean temperature to global mean sea level rise and (2) is consistent with sea level rise projections available in the literature for similar forcing and temperature pathways. It also noted the importance of generating spatially and temporally disaggregated climate information as inputs into damage estimation. It recommended the use of linear pattern scaling (which estimates linear relationships between global mean temperature and local climate variables) to achieve this goal in the near-term.
- Economic damages: Improve and update existing formulations of individual sectoral damage functions when feasible; characterize damage function calibrations quantitatively and transparently; present spatially disaggregated damage projections and discuss how they scale with temperature, income, and population; and recognize any correlations between formulations when multiple damage functions are used.
- Discounting: Account for the relationship between economic growth and discounting; explicitly recognize uncertainty surrounding discount rates over long time horizons using a Ramsey-like approach; select parameters to implement this approach that are consistent with theory and evidence to produce certainty-equivalent discount rates consistent with near-term consumption rates of interest; use three sets of Ramsey parameters to generate a low, central, and high certainty-equivalent near-term discount rate, and three means and ranges of SC-CO2 estimates; discuss how the SC-CO2 estimates should be combined with other cost and benefit estimates that may use different discount rates in regulatory analysis.
Additional details on each of these recommendations as well as longer term research needs are provided in the National Academies’ final report (National Academies 2017).
1.3Executive Order 13990
On January 20, 2021, President Biden issued E.O. 13990, “Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis.” Echoing one of the general principles of E.O. 12866 that an Agency “shall base its decisions on the best reasonably obtainable scientific, technical, economic, and other information”, E.O. 13990 states that it is essential for Agencies to account for the benefits of reducing GHG emissions as accurately as possible. It emphasizes that a full global accounting of the costs of GHG emissions “facilitates sound decision-making, recognizes the breadth of climate impacts, and supports the international leadership of the United States on climate issues” (E.O. 13990 2021). Specifically, E.O. 13990 reinstates the IWG as the Interagency Working Group on the Social Cost of Greenhouse Gases, names the Chair of the CEA, Director of OMB, and Director of the Office of Science
