Another Useless EPA Regulation That’ll Cost Americans More Money
Regarding the last point, probably the harshest criticism of integrated assessment models comes from MIT professor Robert Pindyck, who wrote:
Our previous analysis of two of the integrated assessment models used by the EPA found that using the more realistic Office of Management and Budget stipulated discount rate (omitted by the EPA) caused estimates of the social cost of carbon to drop by more than 80 percent in one model and to actually go negative in the other.
Note: A negative social cost of carbon implies that there is actually an overall benefit from larger CO2 emissions, not a cost. That conclusion, of course, undermines the whole climate change enterprise, which likely accounts for the EPA’s decision to omit the data.
Our preliminary investigation of the social cost of methane (SCM) reveals impacts and flaws of the same sort as in the social cost of carbon analysis.
- The part of the models relating temperature to CO2 increases is out of date and significantly overstates the impact compared to recent best estimates.
- The EPA underestimates the discount rate (ignoring Office of Management and Budget guidance), which makes an order of magnitude of difference in the modeling results.
- The models do not fully represent the complexity of the real world and use arbitrary values for critical factors.
Regarding the last point, probably the harshest criticism of integrated assessment models comes from MIT professor Robert Pindyck, who wrote:
These models have crucial flaws that make them close to useless as tools for policy analysis: certain inputs (e.g. the discount rate) are arbitrary, but have huge effects on the SCC estimates the models produce; the models’ descriptions of the impact of climate change are completely ad hoc, with no theoretical or empirical foundation; and the models can tell us nothing about the most important driver of the SCC, the possibility of a catastrophic climate outcome. IAM-based analyses of climate policy create a perception of knowledge and precision, but that perception is illusory and misleading.
Our previous analysis of two of the integrated assessment models used by the EPA found that using the more realistic Office of Management and Budget stipulated discount rate (omitted by the EPA) caused estimates of the social cost of carbon to drop by more than 80 percent in one model and to actually go negative in the other.
Note: A negative social cost of carbon implies that there is actually an overall benefit from larger CO2 emissions, not a cost. That conclusion, of course, undermines the whole climate change enterprise, which likely accounts for the EPA’s decision to omit the data.
Our preliminary investigation of the social cost of methane (SCM) reveals impacts and flaws of the same sort as in the social cost of carbon analysis.