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Chapter 4

Climate Science, Rational Basis Analysis and Endangerment

Contents

4.1 Climate Science ................................................................................................................... 2

4.2 Legal Comments Regarding Endangerment Finding and Rational Basis Analysis........... 27

4.3 Calculating "Contribution" ................................................................................................ 30

4.4 Social Cost of Carbon ........................................................................................................ 35

4.4.1 Methodology.................................................................................................................... 35

4.4.2 Climate Science Components of the Modeling Underlying SC-CO2 .............................. 47

4.4.3 Global vs. Domestic Value .............................................................................................. 61

4.4.4 Uncertainty....................................................................................................................... 70

4.4.5 Process-related Concerns................................................................................................. 75

Carbon dioxide fertilization .................................................................................................. 91

Discount rate ......................................................................................................................... 93

Application and aggregation ................................................................................................. 99

4.5 Miscellaneous .................................................................................................................. 112
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4.1 CLIMATE SCIENCE

Comment 4.1-1: Commenters 9685 and 10966 assert that there are flaws with the major lines of 

evidence that are referenced in EPA’s 2009 Endangerment Finding, and that therefore the basis 

for the Endangerment Finding should be brought into question. Commenter 10966 notes that 

each of the three lines of evidence are invalidated by the failure of real-world data to support 

each line of evidence. 

Response 4.1-1: EPA has previously responded to comments that took issue with the general 

three lines of evidence that EPA referenced from the assessment literature in its 2009 

Endangerment Finding. EPA, referencing the assessment literature, described the three lines of 

evidence attributing observed climate change to anthropogenic activities in its 2009 

Endangerment Finding as such: The first line of evidence arises from our basic physical 

understanding of the effects of changing concentrations of greenhouse gases, natural factors, and 

other human impacts on the climate system. The second line of evidence arises from indirect, 

historical estimates of past climate changes that suggest that the changes in global surface 

temperature over the last several decades are unusual. The third line of evidence arises from the 

use of computer-based climate models to simulate the likely patterns of response of the climate 

system to different forcing mechanisms (both natural and anthropogenic). 

Comments on the first line of evidence (our basic physical understanding of the effects of 

changing concentrations of greenhouse gases) were responded to in the RTC document 

accompanying the 2009 Endangerment Finding (see, for example, section 3.2.2 of volume 3). 

More recent evidence, such as from the 2013-14 IPCC Fifth Assessment Report (AR5), 

continues to support the line of evidence that the anthropogenic buildup of greenhouse gases is a

major driver of climate change compared to natural factors such as changes in solar radiation 

(see Figure SPM.5 of the Summary for Policymakers of the IPCC AR5, Working Group I). 

Previous comments on the second line of evidence (that recent climate changes stand out as 

unusual compared to estimates of past climates) were also addressed in the RTC, volume 2, 

which accompanied the 2009 Endangerment Finding and Volume 1 of the Response to Petitions. 

More recent conclusions in the IPCC AR5 state that current levels of the two most important 

greenhouse gases, CO2 and CH4, are at higher levels now compared to at least the last 800,000 

years, whereas this statement could only be made relative to the past 650,000 years based on 

evidence available at the time of the 2009 Endangerment Finding. Furthermore, numerous 

comments questioning the validity of the historic data, such as past records of global temperature 

change, were addressed at length in 2009 (see, for example, Response 2-29 of the RTC where, in 

response to numerous comments raising concerns about the global surface records, EPA states it 

“has concluded that the three primary global surface temperature records (NOAA, NASA, and 

HadCRUT) are reliable and credible.”). The more recent IPCC AR5 stated that, “Warming of the 

climate system is unequivocal, and since the 1950s, many of the observed changes are 

unprecedented over decades to millennia.”

Comments regarding the third line of evidence (the capability of climate models to simulate 

expected patterns of human-induced climate change) were also addressed in the RTC in 2009 

(volumes 3 and 4). More recently, IPCC AR5 stated, “Climate models have improved since the 

AR4. Models reproduce observed continental-scale surface temperature patterns and trends over 
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many decades, including the more rapid warming since the mid-20th century and the cooling 

immediately following large volcanic eruptions.” 

EPA’s 2010 Denial of Petitions and accompanying response to petitions document addressed 

similar critiques of the three lines of evidence. To note one part of EPA’s 2010 Denial (74 FR 

49572): “Petitioners’ evidence does not materially change or warrant any less reliance on the 

other important lines of evidence linking greenhouse gases and climate change: Our basic 

physical understanding of the effects of changing greenhouse gas concentrations and other 

factors; the broad, qualitative consistency between observed changes in climate and the computer 

model simulations of how climate would be expected to change in response to anthropogenic 

emissions of greenhouse gases (and aerosols); as well as other important evidence of an 

anthropogenic fingerprint in the observed warming.” With several more years of research, the 

IPCC AR5 actually strengthened their conclusion that humans have contributed to most of the 

recent warming, finding that it is extremely likely (>95 percent confidence) that “more than half 

of the observed increase in global average surface temperature from 1951 to 2010 was caused by 

the anthropogenic increase in greenhouse gas concentrations and other anthropogenic forcings 

together.”

In sum, the general three lines of evidence attributing human activities to observed climate 

change, as originally described in EPA’s 2009 Endangerment Finding, were sufficiently 

supported in that original record, and remain well supported by more recent evidence.

Comment 4.1-2: Commenter 10091 argued that climate change does not result in negative 

human health impacts, and may result in positive health outcomes. This commenter cites 

improvements in general health statistics to argue that climate change has not resulted in 

negative health outcomes and to suggest that continued climate changes could result in continued 

improvements in these health metrics. For example, the commenter suggests that human health 

in the United States has improved due to climate change, as evidenced by an increase in the life 

span of Americans. The commenter also argues that climate change does not result in negative 

health impacts from changes in the frequency or severity of extreme events, as evidenced by a 

decrease in deaths from extreme events. The commenter contends that heat-related mortality risk 

has declined over time in the US despite a rise in temperature and an increase in the magnitude 

and frequency of heat events, suggesting that adaptation measures to decrease the US 

population’s sensitivity to extreme heat are a health benefit that will continue under continued 

climate change. In addition, commenter 10662 states that EPA does not directly demonstrate 

adverse health effects of greenhouse gas emissions, relying instead on “conjectures” regarding 

the relationship of ozone and PM2.5 with heat waves and drought. The commenter argues that, 

because these pollutants are already required to meet health-based standards through the 

NAAQS, that any further reductions in these pollutants cannot be considered to be justifications 

for regulation. The commenter also argues that the EPA would have to regulate GHGs as ozone 

pollutant precursors under NAAQS if they do directly affect ground-level ozone or PM2.5. 

Finally, the commenter claims that the EPA has not identified any concentration or emissions 

level of CO2 that would significantly decrease purported climate change effects.

Response 4.1-2: The EPA continues to rely on the best available science in order to make its 

determinations. See also Coalition for Responsible Regulation v. EPA, 684 F. 3d at 120 holding 

both that “[t]he body of scientific evidence marshaled by EPA in support of the Endangerment 
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Finding is substantial” and that EPA reasonably considered by major assessments in the field in 

making its determination (“EPA simply did here what it and other decision-makers often must do 

to make a science-based judgment: it sought out and reviewed existing scientific evidence to 

determine whether a particular finding was warranted, it makes no difference that much of the 

scientific evidence in large part consisted of ‘syntheses’ of individual studies and research. Even 

individual studies and research papers often synthesize past work in an area and then build upon 

it. This is how science works”; see also id. characterizing petitioners’ arguments regarding 

consideration of the assessments as “little more than a semantic trick”). The EPA relies on major 

assessment reports, including the US Global Change Research Program’s National Climate 

Assessments (NCA), which consider the entire literature in context rather than selecting a small 

number of individual studies. The third and most recent NCA (2014) states that: 

“Climate change threatens human health and well-being in many ways, including impacts 

from increased extreme weather events, wildfire, decreased air quality, and illnesses 

transmitted by food, water, and diseases carriers such as mosquitoes and ticks. Some of 

these health impacts are already underway in the United States.”

Improvements in some health metrics in recent decades, such as an increase in life expectancy or 

a decrease in deaths due to extreme events, does not provide evidence to support a claim that 

climate change is or will be beneficial to health. Improvements in broad health metrics can be a 

result of changes in medical care, diet, income, or other factors. As noted in EPA’s Response to 

Comments on the 2009 Endangerment Finding (RTC 5.5), the single metric of life expectancy

does not convey or provide information on the risks associated with changes in climate and 

whether or not they are increasing, either in the past or in the future.

EPA does not dispute the findings of Davis et al. (2003a and 2003b) or Kalkstein et al. (2009) 

that heat-related mortality in major U.S. cities declined in the second half of the 20th century and 

that adaptive measures contributed to the decline. However, these findings do not support a 

conclusion that climate change does not present a risk to human health. In fact, the 3rd NCA 

(2014) states:

“Some of the risks of heat-related sickness and death have diminished in recent decades, 

possibly due to better forecasting, heat-health early warning systems, and/or increased 

access to air conditioning for the U.S. population. However, extreme heat events remain a 

cause of preventable death nationwide.”

Commenter 10091 mischaracterizes the results of Bobb et al. (2014), which demonstrated a 

decrease in heat-related mortality and sensitivity to extreme heat events in the United States, by

suggesting that this increase in acclimatization represents an increase in health benefits 

associated with climate change. In fact, the conclusion of the Bobb et al., 2014 study states:

“The population has become more resilient to heat over time. Yet even with this 

increased resilience, substantial risks of heat-related mortality remain. Based on 2005 

estimates, an increase in average temperatures by 5°F (central climate projection) would 

lead to an additional 1,907 deaths per summer across all cities.”
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As noted in EPA’s Response to Comments on the 2009 Endangerment Finding (RTC 5-5, 5-7 

and 5-36), risks to human health can be reduced by technology and adaptive measures, but heat 

presently causes substantial mortality in the Unites States and adaptive measures do not 

eliminate risk and are rather a response to that risk. In fact, decreased sensitivity or decline in 

heat-related mortality may not be as pronounced in the future since access to air conditioning is 

already high in most regions (Ebi et al., 2008). (See also RTC 5-45, 5-48, 5-51) The major 

scientific assessments that EPA relies on, including the NCA, IPCC AR5, and the IPCC SREX, 

all project negative impacts of climate change, and the subsequent increase in frequency or 

severity of extreme events, on human health.

Commenter 10662 criticized EPA’s demonstration of the linkage between climate change and 

health. First, it is important to note that the only facet of this linkage that the commenter 

addressed was the connection between climate change and air quality. The commenter did not 

present any arguments regarding the impacts of climate change on human health through heat 

waves, fires, extreme weather events, or food, water, or vectorborne illnesses. Regarding the 

criticism of the linkage between air quality and climate change, it is also important to note that 

the commenter did not provide any evidence or citations to research that contradict such a 

linkage. In the Endangerment Finding, EPA cited EPA’s Interim Assessment stating that there 

“is now consistent evidence from models and observations that 21st century climate change will 

worsen summertime surface ozone in polluted regions of North America compared to a future 

with no climate change.” The 2014 National Climate Assessment cited estimates that climatechange induced increases in ozone and particulate matter, absent changes in human emissions, 

are projected to lead to “1,000 to 4,300 additional premature deaths nationally per year by 

2050.” The commenter did not provide any evidence counter to these conclusions. The EPA 

specifically addressed the argument by the commenter that the NAAQS are protective in the 

Endangerment Finding, (Federal Register Vol 74, No 239, pg. 66530). EPA stated first that 

despite the existence of a NAAQS, not all areas are in attainment, and climate change can 

worsen air quality in those areas. EPA stated second that even in areas that are in attainment, 

because ozone and PM have no threshold below with no effects can be observed, increases in 

concentration in those areas would still likely result in additional adverse health effects for 

some individuals. The EPA concluded that, “[t]he clear risk to the public from ozone increases 

in nonattainment areas, in combination with the risk to some individuals in attainment areas, 

supports the finding that overall the public health is endangered by increases in ozone resulting 

from climate change.” Despite the connection between climate change and ozone levels, 

greenhouse gases do not qualify as “ozone precursors” which is a term for compounds that react 

in the atmosphere to form ozone locally, whereas greenhouse gases cause increased ozone 

concentration through the mechanism of changing the climate globally. Finally, the EPA has 

stated that any decrease of greenhouse gas emissions or concentrations will reduce climate 

change. 

Therefore, EPA has considered these comments, and finds that they do not provide credible 

evidence of flaws in the EPA’s approach of relying upon the best estimates of the major 

assessments, nor do they demonstrate that climate change does not represent a threat to human 

health. 

Comment 4.1-3: Commenter 10951 submitted a review of the so-called Climategate 2.0 e-mails 

claiming that “the second installment of Climategate e-mails provides a strong basis for renewed 
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scrutiny of the Endangerment Finding.” The commenter identifies 5 themes within the e-mails 

that they claim demonstrate that the IPCC produced flawed scientific work, and that therefore the 

endangerment finding is similarly flawed. The five themes identified by the commenter include:

 The Divergence Problem with historical temperature proxies based on tree-ring data.

 Leading climate scientists’ evasion of freedom of information act requests and 

destruction of responsive material.

 Internal expressions of doubt among the leading climate scientists as to the validity 

and accuracy of their work.

 Concerted efforts to downplay the Medieval Warming Period as natural analogue to 

20th Century warming.

 Shortcomings in the peer review process.

The commenter claims, “Considered together, the foregoing themes significantly undermine the

prevailing theory of climate change and unprecedented warmth in the late 20th Century as 

reported in the Fourth Assessment Report of United Nations Intergovernmental Panel on Climate 

Change, and as reflected in the motor vehicle endangerment finding. The Climategate 2.0 

material makes abundantly clear that the leading proponents of this theory, who were key IPCC 

authors, were biased and that their approach to science was, in fact, highly unscientific and 

results-oriented. In short, climate science must be rigorously re-evaluated in light of these 

systemic problems.”

Response 4.1-3: This comment should be considered in the context of an extensive record 

including the Endangerment Finding, the Response to Comments document, the Denial and 

Response to Petitions, and the recent Court ruling. The Administrator considered the full body of 

scientific evidence in making the Endangerment Finding, and this body of evidence is 

voluminous and well documented. 

The e-mails that Commenter 10951 has highlighted are a second batch of e-mails from the 

incident in 2009 when a server at the University of East Anglia was hacked and a number of e -

mail communications between scientists at the Climatic Research Unit (CRU) from 1999 to 2009 

were copied from that server. The first batch of e-mails from the 2009 incident was analyzed and 

responded to in great detail in the EPA Denial and Response to Petitions. The conclusion of the 

EPA, upheld by the Court, was that the contents of the original set of e-mails did not undermine 

the Endangerment Finding, as stated in the Denial:

“As EPA’s review and analysis shows, the petitioners routinely take these private e-mail 

communications out of context and assert they are ‘‘smoking gun’’ evidence of 

wrongdoing and scientific manipulation of data. EPA’s careful examination of the emails and their context shows that the petitioners’ claims are exaggerated, are often 

contradicted by other evidence, and are not a material or reliable basis to question the 

validity and credibility of the body of science underlying the Administrator’s 

Endangerment Finding or the Administrator’s decision process articulated in the Findings 

themselves. Petitioners’ assumptions and subjective assertions regarding what the e-mails 

purport to show about the state of climate change science are clearly inadequate pieces of 
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evidence to challenge the voluminous and well documented body of science that is the 

technical foundation of the Administrator’s Endangerment Finding.1”

Similar conclusions have been reached independently by a number of other bodies, including the 

UK House of Commons, Science and Technology Committee, the University of East Anglia, 

Oxburgh Panel, the Pennsylvania State University, and the University of East Anglia, Russell 

Panel. The outcomes of each of these independent panels are also in the existing record.

The commenters’ arguments regarding the hacked e mails have also been held by the D.C. 

Circuit to be of insufficient import to justify reconsidering the endangerment finding because 

they do not provide a basis for questioning the correctness of that determination. See Coalition 

for Responsible Regulation v. EPA, 684 F. 3d at 124-25 (e mails not of “’central relevance to the 

outcome of [the Endangerment Finding]... and do not “’provide substantial support for the 

argument that the regulation should be revised’”).

EPA has reviewed all of the new e-mails provided by Commenter 10951. There is nothing in the 

e-mails that would cause EPA to come to a different conclusion than it came to in 2009 or 2010. 

Commenter 10951 repeats all the same errors, misunderstandings, faulty conclusions, acts of 

hyperbole, and “cherry-picking” that the Petitioners did in 2010. The 2010 Denial of Petitions 

and its more technical supplemental Response to Petitions already addressed the bulk of the 

Commenter’s arguments, and the Commenter asserts but does not demonstrate that EPA’s Denial 

or Response to Petitions mischaracterized the original e-mails in any way. 

Regarding the five themes identified by the commenter, the EPA has previously addressed each 

of these themes, and the commenter does not demonstrate that they are raising any new issues. 

Regarding the so-called “divergence problem” and the related issue of downplaying the medieval 

warm period, the EPA addressed these issues in Volume 1.1 of the Response to Petitions, finding 

that all the relevant uncertainties in attempts to determine historical temperatures through 

indirect measures such as tree rings were appropriately discussed in the assessment reports, and 

thus already considered in the Endangerment determination. The commenter does not 

demonstrate that these uncertainties were mischaracterized, or how these uncertainties would 

undermine the conclusions of the Endangerment Finding. Regarding freedom of information 

(FOI) issues, the commenter fails to link the e-mails regarding FOI to any substantive scientific 

errors or to any data that has not been made publically available in the period since the emails 

were written. Regarding internal expressions of doubt among climate researchers, the commenter 

does not recognize that these discussions of uncertainty parallel discussions of uncertainty in the 

published literature and the assessment reports. Finally, regarding assertions of shortcomings in 

the peer review process, the commenter does not show why the emails they provide, which 

highlight scientists criticizing the work of other scientists, are improper. As stated in Volume 3.3 

of the Response to Petitions, “the petitioners make broad leaps in logic to impugn the overall 

integrity of the peer-reviewed climate change literature based on very limited examples and 

largely speculative assertions.” 

 

1

EPA’s Denial of the Petitions to Reconsider the Endangerment and Cause or Contribute Findings for Greenhouse 

Gases, http://www.epa.gov/climatechange/Downloads/endangerment/response-decision.pdf, 49557.
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An identical comment was submitted to the docket for the 2012 proposal. The EPA also 

reviewed the comment at that time, and discussed the emails in questions in the preamble of the 

2013 proposal:

“One commenter submitted emails between climate change researchers from the period 

1999 to 2009 that were surreptitiously obtained from a University of East Anglia server 

in 2009 and publicly released in 2011. According to the commenter, these emails showed 

that the climatologists distorted their research results to prove that climate change causes 

adverse effects. The EPA reviewed these emails and found that they raised no issues that 

Petitioners had not already raised concerning other emails from the same incident, 

released in 2009. The commenter's unsubstantiated assumptions and subjective assertions 

regarding what the emails purport to show about the state of climate change science is not 

adequate evidence to challenge the voluminous and well-documented body of science 

that underpins the Administrator's Endangerment Finding.”

The commenter did not acknowledge EPA’s discussion of this issue, and the EPA’s conclusion 

still holds that these emails do not provide a reliable basis to question the validity and credibility 

of the body of climate science. 

Comment 4.1-4: Commenters 9733 and 10045 argue that EPA should exclude biogenic CO2

emissions from this rule because they are carbon neutral. The commenters begin by arguing that 

EPA’s 2009 Endangerment Finding only identified as the cause of endangerment emissions from 

fossil fuels, and specifically omitted biomass from national GHG emission totals upon which it 

relied. Therefore, the commenters argue that the rational basis upon which the EPA relies for 

regulating CO2 cannot be relied upon for biogenic carbon, and that it would therefore be arbitrary

and capricious for EPA to regulate biogenic CO2 before it has finalized its scientific review and 

Accounting Framework which will determine whether these sources should be regulated under 

the Clean Air Act. Commenter 9733 argues that language in the EPA 2009 Inventory of 

Greenhouse Gas Emissions and Sinks admits that carbon “release during the consumption of 

biomass is recycled as U.S. forests and crops regenerated, causing no net addition of CO2 to the 

atmosphere.” Commenter 10045 also notes that the 2006 IPCC Guidelines recommend that 

inventories place emissions of CO2 from combustion of biomass in the section devoted to 

forestry and land-use changes as opposed to the section devoted to energy production, and states 

the RFS2 program excludes emissions of crop-derived CO2 from combustion and fermentation in 

comparisons of the lifecycle GHG emissions of newly-proposed biofuels. Commenter 9733 

provides additional data regarding carbon sequestration from forests. Commenter 9733 argues 

that the use of forest product manufacturing residuals for combined heat and power facilities is 

preferable to letting the residuals decay, potentially leading to release of methane, citing a study 

which calculated that the lifecycle emissions from decay will exceed that from burning the 

residuals, on average, for any time period greater than 2.4 years. Commenter 10045 argues 

specifically that indirect emissions of CO2 associated with production and gathering of cropderived fuels are also harmless. Commenter 10045 also disagrees with EPA’s 2009 

Endangerment Finding Response to Comments response 9-9, stating that the author of the 

response failed to recognize that the definitional foundation of the 2009 Findings contained a 

science-based determination that crop-derived CO2 is inconsequential to global warming. 

Commenter 10045 concludes by arguing that, even if EPA did have the authority to regulate 
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crop-derived CO2, it should exclude it on de minimis grounds, and that when EPA finishes its 

Biogenic Accounting Framework it should set a default of zero for crop-derived CO2 emissions. 

Response 4.1-4: Regarding the 2009 Finding, the commenters have pointed to the fact that some 

of the inventories relied upon by the EPA have excluded biogenic emissions. However, the 

inventories, and the Endangerment TSD, have been clear that land use, land-use change, and 

forestry emissions are not included in the gross national totals but rather in net emission totals. 

This is not a statement on whether these emissions endanger. The Endangerment arises from the 

elevated concentrations of greenhouse gases: while fossil fuel emissions may be the cause of the 

majority of the increase in concentrations of carbon dioxide, land use, land-use change, and 

forestry have also contributed to that increase (the “air pollution” at issue), as noted in the 

Endangerment TSD, and therefore there was no intent to exclude biogenic sources from the 

Endangerment decision.

EPA developed the revised draft report, Framework for Assessing Biogenic CO2 Emissions from 

Stationary Sources, to continue advancing our understanding of the role the use of biomass can 

play in strategies to address greenhouse gas emissions. Specifically, the Framework was 

developed as a policy-neutral framework for assessing biogenic CO2 emissions from stationary

sources—it was not developed as technical guidance in conjunction with any specific policy or 

program. The EPA is engaging in a second round of targeted peer review of the revised draft 

Framework with the SAB in 2015. In November 2014, the agency released a second draft of the 

technical report, Framework for Assessing Biogenic Carbon Dioxide for Stationary Sources. The 

revised Framework, and the EPA’s Science Advisory Board (SAB) peer review of the 2011 

Draft Framework, finds that it is not scientifically valid to assume that all biogenic feedstocks 

are “carbon neutral” and that the net biogenic CO2 atmospheric contribution of different biogenic 

feedstocks generally depends on various factors related to feedstock characteristics, production, 

processing and combustion practices, and, in some cases, what would happen to that feedstock 

and the related biogenic emissions if not used for energy production. For more information 

regarding the revised Framework.

2

Comment 4.1-5: Commenter 3593 notes that the EPA endangerment finding for greenhouse 

gases did not rely on any analysis done within EPA and instead erred in using science 

assessments developed by others. Commenter 10951 states the assessments produced by the 

Intergovernmental Panel on Climate Change (IPCC) are scientifically flawed due to how the 

reports are developed. One commenter argues that the NRC assessment report process is not 

transparent, and that the reports are not independent because they rely on previous assessments 

developed by IPCC and USGCRP. Commenter 10046 argues that by placing lesser weight on

individual studies than on major scientific assessments, EPA introduces timing and data-bias 

issues. Commenter 10046 first points out that the next partial IPCC assessment was due in 

March, with the final document due October of 2014, and further states that EPA timed its 

proposal by not waiting for the full and formal review of that assessment, and that EPA is 

therefore systematically refusing to consider the most recent evidence on these issues.

 

2

see: http://epa.gov/climatechange/ghgemissions/biogenic-emissions.html
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Response 4.1-5: Commenters repeat the argument already rejected by the D.C. Circuit as “little 

more than a semantic trick”. See Coalition for Responsible Regulation, 684 F. 3d at 120. As

outlined in Section VIII.A. of the 2009 Endangerment and Cause or Contribute Findings for 

Greenhouse Gases under Section 202(a) of the Clean Air Act (Endangerment Finding), EPA’s 

approach to providing the technical and scientific information to inform the Administrator’s 

judgment regarding the endangerment question was to rely primarily upon the recent, major 

assessments by the U.S. Global Change Research Program (USGCRP), the Intergovernmental 

Panel on Climate Change (IPCC), and the National Research Council (NRC) of the National 

Academies. In brief, these assessments addressed the scientific issues that the EPA was required 

to examine, were comprehensive in their coverage of the greenhouse gas (GHG) and climate 

change problem, and underwent rigorous and exacting peer review by the expert community, as 

well as rigorous levels of U.S. government review and acceptance, of which EPA took part. 

Primary reliance on the major assessments provided EPA greater assurance that it was basing its 

judgment on the breadth of well-vetted science that reflected the consensus of the scientific 

community. The major findings of the USGCRP, IPCC, and NRC assessments supported the 

finding that GHGs threaten the public health and welfare of current and future generations. EPA 

demonstrated this scientific support at length in the Endangerment Finding itself, in its Technical 

Support Document (which summarized the findings of USGCRP, IPCC and NRC), and in its 

RTC document. Use of IPCC, CCSP, USGCRP, and NRC Reports as the primary scientific 

basis is addressed in Response to Comment (RTC) Volume 1 Section 1, with specific comments 

on EPA’s use of IPCC reports addressed in Section 1.1.1. The IPCC Principles and Procedures 

are outlined in EPA’s Response to Comments Volume I Appendix A. 

On June 26, 2012, the United States Court of Appeals for the District of Columbia Circuit ) 

confirmed the appropriateness of using scientific assessment literature, stating that the EPA had 

based its decision on “substantial scientific evidence” 3and noting that EPA’s reliance on 

assessments was consistent with what decision-makers often must do to make a science-based 

judgment4. 

In addition to the above description of EPA’s rationale for relying on the major assessments as 

the primary scientific basis for the endangerment determination, Section III.A of the 

Endangerment Finding, “The Science on Which the Decisions Are Based,” describes that it was 

not necessary nor logical for EPA to conduct an additional and separate review of the underlying 

climate data and research. Section III.A states: “EPA has no reason to believe that the 

assessment reports do not represent the best source material to determine the state of science and 

the consensus view of the world’s scientific experts on the issues central to making an 

endangerment decision with respect to greenhouse gases. EPA also has no reason to believe that 

putting this significant body of work aside and attempting to develop a new and separate 

assessment would provide any better basis for making the endangerment decision, especially 

because any such new assessment by EPA would still have to give proper weight to these same 

consensus assessment reports.” 

 

3 Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 102, 120 (D.C. Cir. 2012).

4 Id. at 120; see also id. (“EPA is not required to re-prove the existence of the atom every time it approaches a 

scientific question”).
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In response to the comment regarding IPCC’s assessment report development process, we note 

that this comment has been previously raised during the public comment and reconsideration 

processes for the Endangerment Finding (see Section 1.1.1 of Volume 1 the Response to 

Comment document, and Section 2.2 of Volume 2 of the Response to Petitions document). 

Response to Comment 1-14 in Volume 1 of the Response to Comment document addresses IPCC 

processes for ensuring information quality, objectivity, and transparency, and clearly states that 

EPA and the U.S. Government approve the rigorous IPCC review process and the legitimacy of 

its scientific content: 

“EPA has both evaluated and participated in the development and review of IPCC 

reports, and the IPCC process is transparent and rigorous. The IPCC ensures scientific 

credibility and legitimacy of its reports by fairly representing the range of scientific 

opinions on climate change, and the IPCC provides multiple opportunities for input from 

experts along the entire spectrum of opinions...

...The evidence is clear that the IPCC’s procedures are sufficient and effective for 

ensuring quality, transparency, and consideration of multiple and diverse perspectives. 

Because the assessment reports EPA used in developing the TSD represent the best 

available science, and because supporting studies were conducted in accordance with 

sound and objective scientific practices, were peer reviewed, and adhered to standards of 

quality based on objectivity, utility, and integrity, we find that IPCC’s information 

quality process is consistent with EPA’s Guidelines for Ensuring and Maximizing the 

Quality, Objectivity, Utility and Integrity of Information Disseminated by the 

Environmental Protection Agency.

The U.S. Government participated fully in the development, review, and ultimate 

acceptance and approval of IPCC (2007). As stated on the USGCRP’s Web site: “When 

governments accept the IPCC reports and approve their Summary for Policymakers, they

acknowledge the legitimacy of their scientific content”.”

In response to the comment regarding the NRC assessments and the procedures employed during 

their development, we note that this comment was already responded to following the public 

comment process for the Endangerment Finding5. In short, we disagree with the commenter that 

the NRC reports are not transparent. The NRC assessment reports cited in the Endangerment 

Finding record were prepared following rigorous and transparent processes addressing such 

issues as the nomination and selection of authors, the caliber of literature reflected in the 

assessment, and the processes for review and revision of reports. We also disagree with the 

comment that the reports are not independent. Just because the NRC reports reference findings 

from previous scientific assessments produced by others does not signify that the conclusions of 

the NRC report were not independently reached. Instead, previous findings that are reassessed in 

light of the most recent scientific literature and subsequently reaffirmed, helps to demonstrate 

increased confidence in those findings. In fact, in its ruling, the DC Circuit Court stated “EPA is 

not required to re-prove the existence of the atom every time it approaches a scientific question:” 

similarly, scientific assessments do not need to ignore the existence of all previous assessments. 

 

5

See Section 1.1 of Volume 1 of the Response to Comments document “Use of IPCC, CCSP, USGCRP, and NRC 

Reports as the Primary Scientific Basis” and Appendix C of Volume 1 “NRC Report Development Procedures” 
4-12

In response to the comment regarding the use of individual studies and the timing of new 

assessments, we note that EPA gave careful consideration to all of the scientific and technical 

information received during the public comment processes. As stated above, the Agency 

primarily relied on the major assessments because these documents provided EPA with greater 

assurance that it was basing its judgment on well-vetted science that reflected the consensus of 

the scientific community. On the other hand, less weight was placed on the much smaller 

number of individual studies that were not considered or reflected in the major assessments—

often the case when the study was published after some cut-off date to be incorporated into the 

larger assessments. EPA reviewed the individual studies submitted to the Agency largely to see 

if they would lead EPA to change its interpretation of, or place less weight on, the major findings 

reflected in the assessment reports. From its review of individual studies submitted to the 

Agency, EPA has concluded that these individual studies do not change the various conclusions 

or judgments EPA would draw based on the more comprehensive assessment reports. EPA also 

reviewed the most recent science assessments, such as IPCC’s Fifth Assessment Report, that 

have been published since the proposed action was released. The Agency found that the findings 

of these most recent assessments are consistent with the conclusions previously relied upon by 

the Agency, and in some cases strengthen the scientific understanding of how GHGs endanger 

public health and welfare. One of the primary goals of reviewing the individual studies 

submitted to the Agency and the latest scientific assessments was to address the data and timing 

biases raised by the commenters. EPA plans to continue relying primarily on the major 

assessments by the IPCC, the USGCRP, and the NRC. Studies from these bodies address the 

scientific issues that the Administrator must examine, represent the current state of knowledge on 

the key elements for the endangerment analysis, comprehensively cover and synthesize 

thousands of individual studies to obtain the majority conclusions from the body of scientific 

literature and undergo a rigorous and exacting standard of review by the peer expert community 

and U.S. government.

Therefore, EPA has considered these comments, and finds that they do not provide credible 

evidence of flaws in EPA’s approach of relying and placing primary weight on the major 

scientific assessments.

Comment 4.1-6: A number of commenters use three general, somewhat related, arguments to 

claim that recent science suggests that the sensitivity of the climate system to increased 

concentrations of greenhouse gases is lower than was previously assumed. The first is that 

commenters claim that there has been a recent pause in observed global warming that has lasted 

since 1998. One commenter claims that this pause makes the causal connection between 

greenhouse gases and climate change uncertain (commenter 10046). Another commenter 

suggests that estimates of future warming should be lowered because climate models did not 

predict this pause and a historical over-prediction of warming implies faulty models (commenter 

10951). The second argument for a lower climate sensitivity estimate is based on studies by

Loehle (2014), Spencer and Braswell (2013), or on a review of 18 recent studies that all show a 

best estimate of climate sensitivity lower than the mean of the IPCC models (commenter 3953). 

The third argument is that the EPA should take into account changes in how the 5th IPCC 

Assessment (AR5) characterized climate sensitivity. In this regard, one commenter claims that 

the IPCC decision not to present a “best estimate” of climate sensitivity completely undermines 
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its findings (10966) while another commenter claims that the IPCC presented evidence from 

several studies showing a climate sensitivity range of 1.5 to 2 degrees. 

Response 4.1-6: The EPA continues to rely on the best available science. In the case of climate 

sensitivity, the EPA relies on the major assessment reports, including the recent IPCC 5 th

Assessment Report. These assessment reports consider the entire literature in context, rather than 

selecting a small number of individual studies. The likely range for the climate system response 

to a doubling of carbon dioxide concentrations (i.e., the climate sensitivity) described by the 

IPCC AR5 assessment of 1.5 to 4.5 degrees represents a sound judgment of the literature, and the 

appropriate range on which to base EPA decisions. The commenters compare reported climate 

sensitivity from a set of studies to the reported climate sensitivity of the climate models assessed 

by the IPCC. The studies selected by the commenters may present a lower climate sensitivity

than included in most climate models, but the estimated likely (>90%) climate sensitivity range 

made by the IPCC assessment itself is broader than the range found in climate models, and 

encompasses all but one of the studies presented by the commenters. 

The commenters’ characterization of the available evidence is limited. For example, commenters 

discuss a recent 16 year pause in the rate of global surface temperature rise, but mischaracterize 

or do not consider a number of important factors that put this “pause” in context within observed, 

long term climatological trends. The first factor is that this is not actually a pause but rather a 

reduction in the rate of surface temperature rise. The second is that observations of the slower 

rate during this pause depends on which dataset is chosen, but, according to the IPCC, all global 

surface temperature datasets do exhibit a warming trend over the period 1998-2012;. The third is 

that this reduction in rate is mostly evident only in atmospheric temperatures, and that ocean heat 

content and sea level rise (which can be a proxy for ocean heat content) both continue to increase 

rapidly. Other measures of climate change, such as Arctic sea ice retreat and glacial melt, 

similarly show no pause or even demonstrate an acceleration during this time period. A final 

important factor is that trends based on short time periods such as a 16 year period often do not 

reflect long-term climate trends. 

As with the issue of climate sensitivity, the EPA relies on the major assessment reports, 

including the recent IPCC 5th Assessment Report when considering the characterization of the 

recent slowdown in the rate of rise of global surface temperatures. The IPCC AR5 assessment 

discussed the recent reduction in surface temperature rate at length, noting several of the above 

issues. They also note that models generally did not capture the reduction in rate in large part 

because they do not reflect a recent increase in observed heat uptake by the oceans which has 

been a result of natural variability. 

Estimating the climate sensitivity is an area of ongoing research. Many of the studies cited by 

commenters are based on a method of using simple models and recent observed temperatures. It 

is important to also give appropriate weight to other methodologies, such as paleoclimate and 

theoretical approaches, as in done in the IPCC assessment process. Many of the studies cited by 

the commenters were considered by the IPCC, and a number of authors of the cited studies were 

also IPCC authors. Therefore, EPA finds the IPCC process to have appropriately accounted for 

not only the research highlighted by the commenters but the full spectrum of the literature that 

relates to climate sensitivity estimation. The IPCC range does include the possibility that the 
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sensitivity is below 3 degrees, but also shows that there is a possibility that the climate sensitivity

is higher than 3 degrees. 

The IPCC AR5 provided a best estimate of a likely range of climate sensitivity of 1.5 to 4.5 

degrees of warming for a doubling of CO2, compared to a range of 2 to 4.5 degrees in AR4. 

While such an expansion in the range of best estimates of climate sensitivity to include lower 

sensitivity values would likely lower estimates of future damages, the reduction in the best 

estimate would have to be extreme in order to reduce the damages to the point where they would 

no longer endanger public health or welfare. In contrast, this is a relatively small change to the 

previous uncertainty range. 

EPA previously responded to a number of similar comments in 2009, in Section 4.3 of the EPA’s 

Response to Comments on the 2009 Endangerment Finding. In those responses, EPA also 

showed how the approach of the major assessments to determine the Earth’s climate sensitivity

was sound, and considered the entire body of science in context, rather than relying on individual 

studies that were often sensitive to a choice of specific temperature dataset or single 

methodology. 

Therefore, EPA has considered these comments, and finds that they do not provide credible 

evidence of flaws in the EPA’s approach of relying upon the best estimates of the major 

assessments, or that the assessments did not take into account the new literature, nor do they 

demonstrate that a lower best estimate of climate sensitivity would eliminate endangerment 

rather than merely slightly reducing the danger.

Comment 4.1-7: Commenter 10951 states that the IPCC Fifth Assessment Report (IPCC AR5) 

includes greater doubts about surface temperature data quality than was admitted in previous 

IPCC assessments, and that the IPCC acknowledges that its earlier dismissal of the problem of 

surface data contamination was made without supporting evidence. The commenter provides as 

support a document by Ross McKitrick which provides several quotes from the IPCC AR4 and 

AR5 assessments regarding the urban heat island and a discussion of a 2004 paper by McKitrick 

and Michaels along with several subsequent papers. The commenter claims that the 

endangerment finding relied on claims of the previous IPCC report, and that since, according to 

the commenter, this new language overturns that claim, the endangerment finding should be 

revised.

Response 4.1-7: The EPA continues to rely on the best technical and scientific information,

primarily based upon the recent, major assessments by the U.S. Global Change Research 

Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National 

Research Council (NRC) of the National Academies. While the final version of the IPCC AR5 

assessment was not available at the time of proposal, the EPA has since reviewed the AR5 

assessment, along with other new assessments of the USGCRP and the NAS, and found that the 

improved understanding of the climate system they present strengthens the case that GHGs 

endanger public health and welfare. Particularly relevant for discussions of surface temperature, 

confidence in attributing recent warming to human causes has increased since the publication of 

the 4th Assessment Report: the IPCC stated that it is extremely likely (>95 percent confidence) 

that human influences have been the dominant cause of recent warming, compared to the 

previous Fourth Assessment Report conclusion that most of the recent warming was very likely 
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(>90 percent confidence) due to the observed increase in human-produced greenhouse gases. 

Moreover, the IPCC found that the last 30 years were likely (>66 percent confidence) the 

warmest 30 year period in the Northern Hemisphere of the past 1400 years.

The evidence is clear that the Earth has warmed. A number of metrics are clear indicators of a 

warming planet, including increases in ocean heat content, sea level rise, glacial melt, and 

satellite observations of a warming atmosphere. These indicators add to the evidence provided by 

the surface temperature record. However, we also disagree that there are major flaws in the 

surface temperature record. Similar comments were submitted in 2009, and were extensively

discussed in the Response to Petitions, Volume 1. The Response to Petitions described how a 

number of different methods by different research groups all conclude that there has been recent 

warming, regardless of whether they accounted for heat island effects by using nightlights, or 

more stations, or, in the US, a Climate Reference Network designed specifically to be used for 

monitoring climate change. As in most of climate science, there is ongoing research on 

methodology improvements (whether to adjust for urban heat islands or for lack of coverage of 

rapidly warming regions such as the Arctic), but the major conclusions remain robust. 

Regarding the commenter’s discussion of the change in IPCC reports, we find that the 

commenter has mischaracterized the conclusions of the 5th Assessment report. The commenter 

claims that “[t]he IPCC now acknowledges that its earlier dismissal of the problem of surface 

data contamination was made without supporting evidence”. While the IPCC did note that 

“explicit” evidence had not been included in the original assessment regarding a lack of 

statistically significant correlation between socioeconomic development and warming (where 

such a correlation would be potential evidence of temperature station bias), this does not imply

that the previous conclusions were wrong. In fact, the IPCC cites a newer publication (Schmidt, 

2009) that “supported AR4 conclusions”, though the IPCC also cites a pair of publications by

McKitrick that “still yielded significant evidence for such contamination of the record”. While 

this paragraph in isolation does not provide a clear determination about the accuracy of the 

surface temperature record overall, in context of Section 2.4.1.3, it is clear that the overall 

conclusion of the IPCC was that the urban heat island effects are small compared to the global 

trend. This conclusion was based on a variety of methodologies, ranging from using satellites to 

classify stations and determine that there is little difference between warming at urban and rural 

sites (Wickham et al. 2013, Hansen et al. 2010), to reanalysis methods that compare surface 

warming from models constrained by observed sea surface temperatures (such as Parker, 2011). 

The IPCC also found that regression-based results such as the McKitrick papers were less 

convincing than other approaches, stating that they were “inconsistent with many other 

components of the global observing system.” So when the IPCC considered all the available 

approaches to assessing surface temperature biases and urban heat island effects, it determined 

with high confidence that based on the totality of the evidence, that it was unlikely that 

uncorrected effects would have causes an error or more than 10%.

The commenter also mischaracterizes the change between IPCC AR5 assessment and the 

previous Fourth Assessment, stating that “Rather than saying categorically that no such bias 

exists [resulting from urban heat islands], they say only that it is unlikely the effects are greater 

than 10% of the observed global average trend”. However, the IPCC never categorically claimed 

that the urban heat island effect did not exist: in fact, the AR4 report (Trenberth et al., 2007) 

states: “Studies that have looked at hemispheric and global scales conclude that any urban-
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related trend is an order of magnitude smaller than decadal and long-scale trends evident in the 

series.” The “order of magnitude smaller” conclusion from AR4 is consistent with the “10%” 

conclusion in AR5. 

Therefore, EPA has considered these comments, and finds that they do not provide credible 

evidence that the surface temperature record has major flaws, or that any flaws that may exist 

would materially change the conclusions that greenhouse gases endanger public health and 

welfare.

Comment 4.1-8: Comments 9664 and 10961 describe that greenhouse gas emissions, including 

CO2, seriously endanger public health and welfare. Comment 1871 states that the expected 

negative health impacts of climate change have been well studied and include: increased 

malnutrition and infectious disease, injury, heat stress, respiratory disease, reproductive and 

developmental disorders, cancer, physical and psychological trauma from extreme weather 

disasters, and increases in insect-borne disease. Commenter 9514 states that scientific and 

analytical assessments issued since the 2009 Endangerment Finding indicate that climate change 

is a more serious threat than previously realized, and that CO2 emissions are more, not less, 

likely to endanger the public health and welfare. 

Commenter 10090 states the standards to be set by EPA should ensure that new power plants use 

the most efficient, lowest-emitting technology available, strongly supports EPA's limits on new 

coal power plants and supports requirements that would mandate that any new coal plants use 

technology to capture carbon emissions to ensure these plants meet emission limits set by EPA 

because addressing carbon pollution from coal fired power plants tackles one of America's 

dirtiest fuel sources and is an immense step forward Commenter 9514 similarly states that a 

strong NSPS for fossil fuel-fired power plants is critical to achieving the emissions reductions 

necessary to mitigate the dangers of climate change.

Response 4.1-8: In 2009, the EPA Administrator found that the current and projected 

concentrations of the six key well-mixed greenhouse gases — carbon dioxide (CO2), methane 

(CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur 

hexafluoride (SF6) — in the atmosphere threaten the public health and welfare of current and 

future generations. The full scientific record supporting the Endangerment Finding, in particular 

the scientific assessment literature as summarized in the TSD, support the Administrator’s 

determination. We therefore agree with the comments that greenhouse gases, including CO2, 

endanger public health and welfare.

Regarding the adverse health effects of climate change, we note that the EPA evaluated and 

considered scientific information on observed and projected health impacts during the 

development of the 2009 Endangerment Finding. The specific health effects mentioned by the 

commenter have been described in the scientific assessments that the Agency relied upon in 

making the Endangerment Finding and include direct (temperature effects) and indirect (e.g., 

changes in climate-sensitive diseases) impacts on human health. For more specific information 

regarding EPA’s consideration of these health effects, see Volume 5 of the Response to 

Comments document supporting the 2009 Endangerment Finding.
4-17

In response to the comment regarding assessments released since the 2009 Endangerment 

Finding, we agree that these reports, in general, show stronger evidence that climate change 

poses risks to human health and welfare. The preamble summarizes many of these findings. For 

example, recent assessments provide new evidence that reaffirms the linkages between climate 

change and certain extreme weather events such as increases in heavy rainfall in some areas and 

greater extent of wildfire in others; estimates of greater sea level rise than previously projected; 

more evidence of the threats of ocean acidification; impacts of climate change on air quality;

more confidence in the role of human emissions of greenhouse gases in recent global climate 

change; and many other examples. 

Comment 4.1-9: Some commenters (9685, 10091, 10951) argue that the EPA has not 

adequately considered the benefits of CO2 fertilization on plants, especially agricultural crops. 

Commenters rely primarily on NIPCC (2009) and Idso (2013) when stating that increased 

atmospheric CO2 concentrations can increase crop yields, reduce the amount of water plants 

need, and improve plants’ ability to respond to environmental stresses. Another commenter states 

that, “more than 40 recent peer-reviewed academic journals articles have appeared, supporting 

the benefits of increased atmospheric CO2 on plant life.” Further, they note that higher crop 

yields can increase food availability and lower food prices. In contrast, a different commenter 

(9681) expressed concern that CO2 fertilization benefits have been overstated and may be 

cancelled out by negative climate change impacts on agriculture, such as extreme heat, pests, and 

weeds.

Response 4.1-9: The EPA has never disputed that CO2 is a required ingredient for plant growth 

and survival, or that CO2 can stimulate plant growth. This comment was put forth previously and 

responded to in the Response to Public Comments Document of the Endangerment Finding. The 

2009 Endangerment Finding Technical Support Document (TSD) summarizes the scientific 

assessment literature on the stimulatory, or fertilization effect of CO2 on plant growth and 

productivity. For example, Section 3 states that CO2, “can have a stimulatory or fertilization 

effect on plant growth” and “studies have demonstrated increases in CO2 affects water use and 

water use efficiency in plants” (EPA 2009). Section 9 focuses specifically on U.S. agriculture 

and shows that for grain and oilseed crops, increased CO2 and temperature will likely speed plant 

growth in the near-term future (USDA CCSP 2008). The IPCC (2007) also confirms that 

experimental studies of elevated CO2 on crops increases yields. 

However, the EPA considers the stimulatory effects or beneficial influences of elevated CO2 on 

plants alongside other climate change impacts. Many aspects of climate change can negatively 

affect plant growth and crop yields and can outweigh the benefits of CO2 fertilization, as 

suggested by commenter 9681. For instance, the USCGRP found that high temperatures, extreme 

weather events (i.e., heavy downpours, droughts), enhanced pest and weed growth, and ozone 

exposure can significantly limit the benefits of the direct stimulatory CO2 response on plant 

growth. The UGCRP also concluded that as temperature rises beyond a certain threshold in the 

future, grain and oilseed crops will increasingly begin to experience failure, especially if climate 

variability increases and precipitation lessens or becomes more variable. The IPCC (2007) 

concluded that the global price of cereals may decrease with warming below 2oC, but above this 

temperature, prices could increase by 30%. Further, USGCRP concludes that the marketable 

yield of many horticultural crops (e.g., tomatoes, onions, fruits) is very likely to be more 

sensitive to climate change than grain and oilseed crops. More recent assessments (not available 
4-18

at the time of the 111(b) proposal) released by the IPCC (AR5) in 2013, and the USGCRP in 

2014, reaffirm these findings. For instance, the IPCC states, “based on many studies covering a 

wide range of regions and crops, negative impacts of climate change on crop yields have been 

more common than positive impacts”.

EPA has considered the comments regarding the effects of elevated CO2 concentrations on 

plants, and determined that they do not provide credible evidence of flaws in the EPA’s approach 

of relying upon the characterization of CO2 fertilization in the assessment literature in making its 

determination. In particular, the commenters did not recognize that EPA had already considered 

the effects of CO2 fertilization when originally finding that greenhouse gases endanger public 

health and welfare, and had responded to a number of related comments. The commenters 

generally rely on individual studies showing benefits of elevated CO2 in the absence of any other 

climate changes: therefore, the commenters neither present a comprehensive picture of impacts 

of CO2 on the agricultural sector in specific, or on the broader issues of public health and 

welfare. In contrast, EPA relies on the assessment literature, which demonstrates that the net 

impacts of elevated GHG concentrations on agriculture will likely be negative, when considering 

relevant factors such as temperature, precipitation, weather variability, and ground level ozone, 

and that in the broader context of all climate impacts, it is even more clear that climate change 

represents a threat to public health and welfare.

Comment 4.1-10: Multiple commenters highlight the need to protect children from the negative 

impacts of climate change (commenters 10025, 1871, 6358, 6318, 6351, 3984, 6292, 5608). 

Several commenters note that climate change have already negatively affected children’s health 

and are projected to further exacerbate health impacts, such as asthma and other respiratory

illness, infectious disease, malnutrition, heat stress, and mental health disorders (commenters 

1871, 6318, 6351, 3984). These commenters state that there exists an obligation to protect future 

generations from the effects of climate change.

Response 4.1-10: The EPA continues to rely on the best technical and scientific information, 

primarily based upon the recent, major assessments by the U.S. Global Change Research 

Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National 

Research Council (NRC) of the National Academies. These assessment reports consider the 

entire peer-reviewed literature in context to draw conclusions based on the entire body of

findings from the literature. 

The preamble summarizes many new assessment reports published since the 2009 Endangerment 

Finding, including the recent USGCRP’s 2014 Third National Climate Assessment (NCA3), the 

IPCC’s 2013-4 Fifth Assessment Report (AR5) and IPCC’s 2012 “Special Report on Managing 

the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation” (SREX). 

These new assessments provide further evidence supporting the 2009 Endangerment Finding that 

climate change will have a negative impact on human health and welfare, including children’s 

health.

EPA has considered the information provided by the commenters and finds that it is generally

consistent with the findings of the major scientific assessments. We agree with commenters that 

children are a population of concern with respect to health impacts from climate change. As 

noted in EPA’s Response to Comments on the 2009 Endangerment Finding (RTC 5-21), children 
4-19

are particularly vulnerable to illness and death from heat waves and acute and chronic illnesses 

of the respiratory system from particulate matter emissions during forest fires. The most recent 

National Climate Assessment (2014) found that children, primarily because of physiological and 

developmental factors, will disproportionately suffer from the effects of heat waves, air 

pollution, infectious illness, and trauma resulting from extreme weather events. 

Overall, the EPA finds that the information provided by the commenter is generally consistent 

with and does not alter the 2009 Endangerment Finding that climate change will have a negative 

impact on human health and welfare.

Comment 4.1-11: Commenter 3593 refers to a document written by Alan Carlin at the EPA 

criticizing the science used in the Endangerment Finding. The commenter argues that EPA 

violated due process by ordering Alan Carlin not to discuss the report. The commenter alleges 

that after Alan Carlin’s report was forwarded to the endangerment finding workgroup that it was 

dismissed without consideration or response due to a predetermined decision by the EPA, and 

that the EPA never analyzed the underlying scientific issues raised by Dr. Carlin. The commenter 

states that the appropriate remedy for the due process violations under the Fifth Amendment, 

including violation of the rights of protected classes of individuals, that EPA cannot promulgate 

the rule as written. The commenter alleges that the Agency cannot appropriately address the 

mischief involved, and that therefore it must withdraw the proposal in its entirety. 

Response 4.1-11: The document written by Alan Carlin was not ignored. EPA reviewed and 

addressed the comments submitted by Alan Carlin in the record for the Endangerment Finding in 

2009. At the time, Alan Carlin’s document was a collection of various statements; it was not a 

publication nor a new analysis. In Volume 1 of EPA’s responses to public comments (RTC) in 

support of the Endangerment Finding, we stated: “EPA has reviewed new and additional 

scientific literature [in addition to the major scientific assessments on which EPA placed primary 

weight] received through public comment. This review includes the Carlin document.”6In other 

volumes of the RTC there are numerous examples where EPA responds directly to statements 

made in the Carlin document. In volume 2 of the RTC7, numerous commenters used statements 

from the Carlin document and these were responded to in detail. For example, several 

commenters submitted a comment from Alan Carlin claiming that the most reliable sets of global 

temperature data available, using satellite microwave sounding units, show no appreciable 

temperature increases during the time from 1978 to 1997. EPA provided a detailed response 

(Response 2-48), concluding it was “unclear how the Carlin comment reached this conclusion, 

because our review of the two satellite temperature datasets...show temperature increases for the 

period from 1979 (when annual data became available) to 1997.” In volume 4 of the RTC 

(available at: http://epa.gov/climatechange/endangerment/comments/volume4.html), several 

commenters referred to the Carlin document to state that the IPCC ignored the possibility that 

there may be other significant natural effects on global temperatures that we do not yet 

understand, and that therefore this possibility invalidates IPCC statements implying that one 

must assume anthropogenic sources in order to duplicate the temperature record. EPA’s response 

(4-14) addresses the comment in detail, including the statements that “EPA has reviewed Alan 

 

6 Response 1-13; available at: http://epa.gov/climatechange/endangerment/comments/volume1.html.

7 http://epa.gov/climatechange/endangerment/comments/volume2.html.
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Carlin’s document”, that “the assessment literature clearly demonstrates that the historical 

pattern of global temperature change is due to a combination of natural and anthropogenic 

factors,” and that “we find that the evidence that the Carlin document relies on for this analysis 

of recent temperature trends is very weak.” In sum, Alan Carlin’s comments were considered, 

reviewed, and responded to by EPA, and these comments did not warrant calling into question 

the fundamental science relied upon that supported EPA’s 2009 Endangerment Finding.

Comment 4.1-12: Some commenters have argued that the EPA relies too heavily on the 2009 

Endangerment Finding and that the agency has inadequately considered the most up-to-date 

science in moving forward with the 111(b) rulemaking. One commenter (9201) asserts that the 

fact that the Endangerment Finding (and subsequent petition denials) has been upheld in the 

courts does not preclude the agency from reconsidering the endangerment determination in light 

of the most up-to-date climate science. The commenter also notes that the science relied upon 

was current in 2006 and will be nearly a decade old when states submit plants for the upcoming 

111(d) rulemaking. Another commenter (10951) notes that the 2007 IPCC report (AR4) and the 

2009 USGCRP report, both of which the EPA relied upon in making the Endangerment 

determination, provide the scientific knowledge only up to 2006 and 2008, respectively. This 

commenter asserts that current scientific knowledge does not fully support the scientific 

conclusions that underpin the Endangerment finding, focusing on their interpretation of the most 

recent IPCC report (AR5), NRC reports, and on the so-called “Climategate.” 

Response 4.1-12: The EPA recognizes that climate change is a very active area of scientific 

research and that multiple assessments have been released since the 2009 Endangerment Finding. 

Accordingly, the EPA has and continues to review all new relevant assessments and use this 

updated information to inform rule development. This continued scientific review began 

following the Endangerment determination and is ongoing. As discussed in the preamble, new 

assessments since the 2009 Endangerment Finding were considered and evaluated, and informed 

this 111(b) rule. These recent assessments include several NRC reports of the National Academy 

of Sciences, the IPCC Fifth Assessment Report (AR5), the 2014 National Climate Assessment, 

and the IPCC’s 2012 “Special Report on Managing the Risks of Extreme Events and Disasters to 

Advance Climate Change Adaptation” (SREX). 

Based on our review of the more recent scientific assessments, we disagree with the assertion 

that recent reports summarizing climate change research contradict the body of science that 

underpinned EPA’s 2009 Endangerment Finding. In fact, these assessments show stronger 

evidence to support the determination that GHGs are reasonably anticipated to endanger public 

health and welfare. The preamble summarizes the findings of many of these reports. For 

example, recent assessments provide even stronger evidence attributing the human-induced 

buildup of GHGs in the atmosphere to recently observed climate change, as well as new 

evidence reaffirming the linkages between human-induced climate change and extreme weather, 

increases in heavy rainfall in some areas and greater extent of wildfire in others, increased loss of 

sea ice in the arctic, and greater projected sea level rise than previously documented. 

Recently released assessments that were not available prior to the 111(b) rulemaking further 

strengthen the determination that GHGs threaten human health and welfare. Both the IPCC 

(2013) and the National Climate Assessment (USGCRP 2014) document widespread impacts on 

heath and numerous sectors important to human well-being. For instance, the IPCC Fifth 
4-21

Assessment Report states that, “Impacts from recent climate-related extremes, such as heat 

waves, droughts, floods, cyclones, and wildfires, reveal significant vulnerability and exposure of 

some ecosystems and many human systems to current climate variability”. These include 

disruption of food production and water supply, damage to infrastructure, morbidity and 

mortality, and consequences for human well-being, among others. Additional impacts include 

increased air pollution and exposure to allergens, as well as greater emergence of diseases such 

as lyme (USGCRP 2014). In sum, it is our view that consideration of more up-to-date climate 

science would only serve to reaffirm EPA’s judgment that led to the original Endangerment 

Finding.

Comment 4.1-13: Commenter 10091 states that there has been an overall long-term decline in 

mortality from extreme weather events (hurricanes, floods, lightning, tornadoes) in the United 

States, adjusted for population changes. The commenter cites Goklany, I.M. (2011). Wealth and 

Safety: The Amazing Decline in Deaths from Extreme Weather in an Era of Global Warming, 

1900–2010. Policy Study 393, Reason Foundation. Based on this study, the commenter 

concludes that anthropogenic climate change will not cause adverse human health impacts from 

extreme weather events. 

Response 4.1-13: The EPA continues to rely on the best technical and scientific information, 

primarily based upon the recent, major assessments by the U.S. Global Change Research 

Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National 

Research Council (NRC) of the National Academies. These assessment reports consider the 

entire peer-reviewed literature in context to draw synthesis conclusions based on the body of 

findings from the literature. In contrast, the commenter draws a conclusion from one individual, 

non-peer-reviewed study.

The preamble summarizes many new assessment reports published since the 2009 Endangerment 

Finding, including the recent USGCRP’s 2014 Third National Climate Assessment (NCA3), the 

IPCC’s 2013-4 Fifth Assessment Report (AR5) and IPCC’s 2012 “Special Report on Managing 

the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation” (SREX). 

These new assessments provide additional evidence to support the 2009 Endangerment Finding 

that climate change will have a negative impact on human health and welfare, including 

reaffirming the linkages between climate change, extreme weather, and human health. The 

assessment literature comprehensively discusses mortality, morbidity, and future projected 

impacts via various climate-health exposure pathways. 

The commenter, on the other hand, focuses solely on whether there is an observed national 

mortality trend from hurricanes, floods, lightning, and tornadoes. The commenter ignores three 

key aspects of the assessment literature’s synthesis of the current state of scientific 

understanding: (1) that the discussion of health impacts focuses on those types of extreme 

weather events with appropriate links to climate change; (2) that in the U.S., the health impacts 

of extreme weather will manifest differently according to region and population affected; and 

(3) that health impacts of extreme weather include morbidity, not just mortality. 

Regarding these three key aspects, the NCA3 concludes the following: 
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Certain types of extreme weather events with links to climate change have 

become more frequent and/or intense, including prolonged periods of heat, 

heavy downpours, and, in some regions, floods and droughts (NCA3 

Highlights pg x). 

Extreme weather events often lead to fatalities and a variety of health impacts 

on vulnerable populations, including impacts on mental health, such as 

anxiety and post-traumatic stress disorder. Large-scale changes in the 

environment due to climate change and extreme weather events are increasing 

the risk of the emergence or reemergence of health threats that are currently 

uncommon in the United States, such as dengue fever [NCA3, pg 34].

The effects of temperature extremes on human health have been well 

documented for increased heat waves, which cause more deaths, hospital 

admissions and population vulnerability. [...] The effects of weather extremes 

on human health have been well documented, particularly for increased heavy

precipitation, which has contributed to increases in severe flooding events in 

certain regions. Floods are the second deadliest of all weather-related hazards 

in the United States. Elevated waterborne disease outbreaks have been 

reported in the weeks following heavy rainfall, although other variables may 

affect these associations. Populations living in damp indoor environments 

experience increased prevalence of asthma and other upper respiratory tract 

symptoms. [...]The effects of extreme weather on mental health have been 

extensively studied. Studies have shown the impacts of mental health 

problems after disasters, with extreme events like Hurricane Katrina, floods, 

heat waves, and wildfires having led to mental health problems. Further work 

has shown that some people with mental illnesses are especially vulnerable to 

heat. Suicide rates vary with weather, dementia is a risk factor for 

hospitalization and death during heat waves, and medications for 

schizophrenia may interfere with temperature regulation or even directly

cause hyperthermia. Additional potential mental health impacts include 

distress associated with environmental degradation, displacement, and the 

knowledge of climate change [NCA3, pgs 252-253]

In addition, the IPCC AR5 states that

Extreme heat events currently result in increases in mortality and morbidity in 

North America (very high confidence), with impacts that vary by age, location, 

and socioeconomic factors (high confidence). [...] Extreme coastal storm events 

can cause excess mortality and morbidity, particularly along the East Coast of the 

USA, and the Gulf Coast of both Mexico and the USA [...] Further climate 

warming in North America will impose stresses on the health sector through more 

severe extreme events such as heat waves and coastal storms [...]

In light of these conclusions, EPA has considered the information provided by the commenter 

and finds that it does not provide credible evidence of flaws in the EPA’s approach of relying 
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upon the synthesis conclusions of the major assessments, nor does it demonstrate that there are 

no health impacts associated with extreme weather events related to climate change.

Comment 4.1-14: Commenter 10091 states that there is no definitive scientific evidence 

regarding the direction or magnitude of changes in extreme weather events due to climate 

change. Commenter 10046-6983 states that no observational evidence exists to support a global 

increase in extreme weather events. 

Response 4.1-14: The EPA continues to rely on the best technical and scientific information, 

primarily based upon the recent, major assessments by the U.S. Global Change Research 

Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National 

Research Council (NRC) of the National Academies. These assessment reports consider the 

entire peer-reviewed literature in context to draw synthesis conclusions based on the body of 

findings from the literature. In contrast, the commenters do not cite the basis of their conclusion.

The preamble summarizes many new assessment reports published since the 2009 Endangerment 

Finding, including the recent USGCRP’s 2014 Third National Climate Assessment (NCA3), the 

IPCC’s 2013-4 Fifth Assessment Report (AR5) and IPCC’s 2012 “Special Report on Managing 

the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation” (SREX). 

These new assessments provide additional evidence to support the 2009 Endangerment Finding 

and reaffirm the linkages between climate change, extreme weather, and human health. 

The NCA3 concludes that “Certain types of extreme weather events with links to climate change 

have become more frequent and/or intense, including prolonged periods of heat, heavy 

downpours, and, in some regions, floods and droughts” (NCA3 Highlights pg x). In contrast to 

the commenter’s argument regarding lack of observational evidence of extreme weather trends, 

additional findings of the NCA3 state:

Some extreme weather and climate events have increased in recent decades, and new and 

stronger evidence confirms that some of these increases are related to human activities. 

Changes in extreme weather events are the primary way that most people experience 

climate change. Human-induced climate change has already increased the number and 

strength of some of these extreme events. Over the last 50 years, much of the United 

States has seen an increase in prolonged periods of excessively high temperatures, more 

heavy downpours, and in some regions, more severe droughts (NCA3 pg 24).

The IPCC also finds observed changes in climate extremes related to temperature, precipitation, 

tropical cyclones, and sea level. As noted in the TSD for the 2009 Endangerment Finding, these 

changes “apply generally to all parts of the globe, including the United States, although there are 

some regional and local exceptions due to patterns of natural climate variability” [4(k) pg43]. 

The IPCC SREX assessment report (IPCC 2012) further supports the Administrator’s finding 

regarding extreme weather and climate events: 

A changing climate leads to changes in the frequency, intensity, spatial extent, duration, 

and timing of extreme weather and climate events, and can result in unprecedented 

extreme weather and climate events. [...] There is evidence that some extremes have 
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changed as a result of anthropogenic influences, including increases in atmospheric 

concentrations of greenhouse gases. [...] Extreme events will have greater impacts on 

sectors with closer links to climate, such as water, agriculture and food security, forestry, 

health, and tourism.

In light of these conclusions, EPA has considered the information provided by the commenter 

and finds that it does not provide credible evidence of flaws in the EPA’s approach of relying 

upon the synthesis conclusions of the major assessments, nor does it demonstrate that no 

observational evidence exists to support a global increase in extreme weather events.

Comment 4.1-15: Commenter 1871 concludes that there are many studies regarding the 

expected negative health impacts of climate change, which includes “physical and psychological 

trauma from extreme weather disasters.” Commenter 9681-5964 states that climate change is 

making coastal flooding, drought, and impacts from extreme weather worse, citing Peterson, T. 

C., M. P. Hoerling, P. A. Stott and S. Herring, Eds., 2013: Explaining Extreme Events of 2012 

from a Climate Perspective. Bull. Amer. Meteor. Soc., 94 (9), S1–S74.

Response 4.1-15: The EPA continues to rely on the best technical and scientific information, 

primarily based upon the recent, major assessments by the U.S. Global Change Research 

Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National 

Research Council (NRC) of the National Academies. These assessment reports consider the 

entire peer-reviewed literature in context to draw synthesis conclusions based on the body of 

findings from the literature. 

The preamble Section II.A.3 summarizes many new assessment reports published since the 2009 

Endangerment Finding, including the recent USGCRP’s 2014 Third National Climate 

Assessment (NCA3), the IPCC’s 2013-4 Fifth Assessment Report (AR5) and IPCC’s 2012 

“Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate 

Change Adaptation” (SREX). These new assessments provide additional evidence to support the 

2009 Endangerment Finding that climate change will have a negative impact on human health 

and welfare, including reaffirming the linkages between climate change, extreme weather, and 

human health.

EPA has considered the information provided by the commenters and finds that it is generally

consistent with the conclusions of the assessment literature. The NCA3 concluded that “certain 

types of extreme weather events with links to climate change have become more frequent and/or 

intense, including prolonged periods of heat, heavy downpours, and, in some regions, floods and 

droughts” (NCA3 Highlights pg x). The Peterson (2013) study was not available at the time 

when NCA3 was being developed, but an earlier edition was assessed and cited in NCA3.

8

The NCA3 also discusses various health impacts of extreme weather associated with climate 

change—including deaths, hospital admissions, elevated waterborne disease outbreaks, increased 

prevalence of asthma and other upper respiratory tract symptoms, and mental health problems 

 

8

Peterson, T. C., P. A. Stott, and S. Herring, 2012: Explaining extreme events of 2011 from a climate perspective. 

Bulletin of the American Meteorological Society, 93, 1041-1067, doi:10.1175/BAMS-D-12-00021.1.
4-25

after extreme weather disasters—that are consistent with the commenter’s description of 

“physical and psychological trauma from extreme weather disasters.”

Overall, the EPA finds that the information provided by the commenter is generally consistent 

with and does not alter the 2009 Endangerment Finding that climate change will have a negative 

impact on human health and welfare.

Comment 4.1-16: Commenter 10618 states EPA presents calculations using a benefit per ton 

reduced for NOx and SO2 that suffer from additional flaws. National Ambient Air Quality 

Standards are designed to protect the human and ecological health with an adequate margin of 

safety. Additional reductions of these pollutants well below these standard levels should not have

any quantifiable health benefit. Additionally, the modeling and calculations presented by EPA 

ignore the projected impacts of the MATS Rule on air quality, which in many cases will drive 

emissions below the Lowest Measured Levels in the studies used to support the health claims, 

thus invalidating the applicability of the studies to a benefit calculation. Furthermore, the 

Krewski et al. and Lepeule et al. studies which underpin the health benefit calculations that EPA 

estimates (see, e.g., RIA at 5-42) use data from the 1980s and 1990s that do not take into account 

current air quality emission levels or trends. For example, air emissions post-MATS 

implementation are going to be significantly lower than the years used in these studies. 

Additionally, these studies fail to differentiate health response between various components of 

particulate matter even though more recent studies show associations between locally produced 

carbonaceous compounds but NO associations between utility produced SO2 and NOx emissions. 

There is also concern with EPA's continued use of the Value of a Statistical Life calculated from 

willingness to pay survey results as these results do not appropriately value premature mortality 

that could be measured in days. A more robust measure needs to be developed that appropriately 

values premature mortality with consideration to temporality. 

Commenter 10618 states EPA should not include any discussion of health benefits within the 

RIA as any such benefits are indirect and speculative. Furthermore, EPA should update its 

calculations of health benefits to include use of a broader range of scientific literature, including 

peer-reviewed studies showing no association with PM and mortality and significant issues with 

health benefit calculation methodologies. 

Commenter 9687 states EPA's own data shows that PM2.5 concentrations are well below the 

national standard and are continuing to decrease, yet EPA claims a co-benefit for PM reductions 

under the proposed rule. Air Quality Trends: EPA creates air quality trends using measurements 

from monitors located across the country. The table below shows that air quality based on 

concentrations of the common pollutants has improved nationally since 1980. EPA data shows 

that annual PM2.5 concentrations have been reduced by 33% from 2000 to 2012. The 24-hour 

PM2.5 concentration has been reduced even more: 37%. The PM trends graphic shows that the 

national average concentration of PM2.5 fell below the EPA standard in 2007. By 2012 the 

average was roughly 20% below the national standard and the band showed that ninety percent 

of sites have concentrations below the national standard. Commenter concludes that EPA is 

claiming harm from concentrations that are BELOW the national standard.

Response 4.1-16: The benefit-cost analysis included in the RIA accompanying the proposed and 

final rules was conducted in compliance with Executive Order 12866. While the primary 
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conclusion of the analysis was that there would be no costs or benefits associated with these 

standards, because all new generating units built in the period of analysis would be compliant 

with these standards in the baseline. However, the EPA conducted two illustrative analyses that 

considered the costs and benefits if key assumptions were to change. Consistent with OMB9and 

EPA guidance10, when conducting a cost-benefit analysis to meet the requirements of EO 12866, 

the EPA estimates all of the anticipated costs and benefits associated with a regulatory action to 

the extent feasible, including benefits anticipated to occur from reducing air pollution to below 

the NAAQS levels. As EPA has consistently stated, the NAAQS are not risk free, and as a 

result, consistent with scientific evidence and CASAC review. 

The EPA disagrees that it has double-counted the benefits for this rule, as all of the estimated 

health benefits are attributable to the emissions reductions associated with this proposed rule. 

The EPA notes that NAAQS are set at a level deemed by the EPA Administrator to be protective 

of public health within an adequate margin of safety and are not set at a level of zero risk. 

Therefore, there would still be health benefits that occur at the lower concentrations, even if we 

have less confidence in the magnitude of those benefits. The EPA believes that the best estimate 

of benefits includes benefits both above and below the levels of the NAAQS and maintains it is 

not double-counting benefits simply because the magnitude of the health benefits that occur at 

lower concentrations are more uncertain. 

The EPA’s standard practice for its rules is to estimate, to the extent data and time allow, all 

benefits of the emissions reductions achieved by a rule beyond control requirements for other 

rules, i.e., establish a baseline. While it can be difficult to account for concurrent rulemakings in 

a baseline, the EPA clearly identifies what is and what is not in the baseline for each analysis. If 

this proposed rule was duplicative of other rules, then there would be no additional costs or 

benefits attributable to this proposed rule. Prior to estimating the health benefits of this proposed 

rule (and any other rule), we simulated what PM2.5 concentrations would be in the future to 

account for the air quality benefits that would occur due to other regulations (e.g., MATS) or 

economic factors in this baseline. Any emissions changes expected as a result of this proposed 

rule are additional emissions reductions beyond the other regulations included in the baseline 

(e.g., MATS). Therefore, the benefits from particle reductions are not double-counted – they are 

real health benefits from emissions reductions anticipated to be achieved by this proposed rule. 

Further, the PM2.5 and ozone health co-benefits expected from this proposed rule are not doublecounted with benefits estimated in the NAAQS RIAs. NAAQS RIAs illustrate, but do not 

predict, the emissions reductions strategies that States may choose to enact when implementing a 

revised NAAQS. Subsequent Federal and State implementation rules will be reflected in future 

baselines for PM and ozone NAAQS reviews. Also, because it is not possible to accurately 

account for rules that have not yet been promulgated, RIAs prepared for a future rulemaking will 

 

9 Office of Management and Budget (OMB). 2003. Circular A-4: Regulatory Analysis. Washington, DC. Available 

on the Internet at http://www.whitehouse.gov/omb/circulars/a004/a-4.html.

10 U.S. Environmental Protection Agency (U.S. EPA). 2010a. Guidelines for Preparing Economic Analyses. EPA 

240-R-10-001. National Center for Environmental Economics, Office of Policy Economics and Innovation. 

Washington, DC. December. Available on the Internet at <http://yosemite.epa.gov/ee/epa/eerm.nsf/vwAN/EE-0568-

50.pdf/$file/EE-0568- 50.pdf>. 
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likely include any additional rulemakings in the baseline. For example, the baseline in this RIA 

reflects many recently promulgated rulemakings, including MATS, CSAPR, and CCR. 

The U.S. EPA follows a highly structured, transparent and peer-reviewed process for estimating 

the human health impacts attributable to poor air quality. As a first step, the Agency identifies 

the health endpoints to quantify by consulting the Integrated Science Assessment, a systematic 

review of the clinical, toxicological and epidemiological literature. This document is reviewed by 

the independent Clean Air Scientific Advisory Committee. The Agency quantifies those 

endpoints classified by the ISA as being causal or likely causal, selecting concentration-response 

relationships from studies that satisfy a host of criteria—most notably whether the population 

characteristics match those affected by the regulation, thus excluding studies performed outside 

of the U.S. and Canada. The Agency’s approach for characterizing the benefits of air quality 

changes has been extensively reviewed by independent scientific bodies including the National 

Academies of Sciences and the U.S. EPA Science Advisory Board. 

Consistent with the findings of the PM ISA, which found that the log-linear no-threshold model 

best estimates PM-related premature death, the Agency quantifies PM impacts resulting from 

changes in ambient concentrations at all levels.

4.2 LEGAL COMMENTS REGARDING ENDANGERMENT FINDING 

AND RATIONAL BASIS ANALYSIS

Comment 4.2-1: Multiple commenters submitted comments on whether EPA is required to do 

an endangerment finding for this rule. Some commenters supported EPA’s view that section 

111(b) only requires an endangerment finding when a source category is listed and that no 

additional endangerment finding is needed to set standards for additional pollutants emitted from 

a listed source category. Other commenters argued that EPA must make a pollutant-specific 

endangerment finding for any pollutant that it regulates under section 111(b), and so here must 

make a pollutant-specific endangerment finding for CO2. 

Response 4.2-1: An endangerment finding is only required when EPA lists a source category

under section 111(b)(1)(A). Nothing in section 111 requires that EPA make further 

endangerment findings with respect to each pollutant that it regulates under section 111(b)(1)(B). 

EPA’s views on these issues are discussed in detail in Section III.A. of the preamble. 

Comment 4.2-2: One commenter argued that EPA could not base this rule on the 1971 listing 

decision of EGUs because the statutory listing criteria in effect at that time required only a 

“cause or contribute” finding and not that the source category “contribute significantly,” as is 

currently required for listing under section 111(b)(1)(A).

Response 4.2-2: EPA disagrees that the the 1971 listing decision must be redone – with a new 

endangerment finding -- in light of the revision to the listing provision in section 111(b)(1)(A). 

Nothing in the statute requires that. Source categories that were listed under the previous listing 

provisions continue to be listed.

Comment 4.2-3: Some commenters state that Section 111(b)(1)(A) establishes that the purpose 

of the NSPS program is to regulate and reduce emissions of significant "air pollution" that 
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"endanger public health or welfare" and that EPA cannot reasonably interpret Section 111 such 

that the endangerment determination is separated from the subject of regulation. These 

commenters state that EPA’s interpretation that it does not need to do an endangerment finding 

means there is no assurance that regulations would serve to mitigate an actual and significant 

endangerment of public health or welfare, and thus this interpretation of Section 111(b)(1)(A) 

would allow EPA to impose standards for air pollutants that do not contribute significantly to an 

endangerment of public health or welfare. Similarly, other commenters state that EPA’s 

interpretation would allow it to regulate any air pollutant, no matter how insignificant, from a 

source category that was listed based on significant contributions of other pollutants.

Response 4.2-3: These comments ignore the role that EPA’s rationale basis analysis plays in 

deciding what pollutants will be regulated under section 111(b)(1)(B). As discussed in Section 

III.A of the preamble, EPA has applied the rational basis analysis in the past to conclude that it 

would not regulate certain pollutants that are emitted from the source category. By considering 

whether there is a rational basis to regulate a given pollutant from a listed source category, EPA 

ensures that it regulates pollutants that warrant regulation.

Comment 4.2-4: Commenters stated that EPA’s interpretation that it should apply a rational 

basis analysis when it decides what pollutants to regulate under section 111(b)(1)(B) is not a 

reasonable interpretation because EPA’s rational basis analysis considers the same issues as an 

endangerment finding under section 111(b)(1)(A): the health and welfare impacts of the pollutant 

and the amount of the pollutant emitted by the source category. EPA should instead conduct an 

endangerment finding.

Response 4.2-4: EPA disagrees with this comment. EPA’s interpretation to look to the same 

factors as an endangerment finding is both true to the statute and common sense. First, EPA 

believes that looking to the same considerations that Congress identified for the endangerment 

finding in section 111(b)(1)(A) when it applies the rational basis analysis under section 

111(b)(1)(B) supports, rather than contradicts, the reasonableness of EPA’s approach. Second, 

EPA’s view is that the harm imposed by a pollutant and the amount of emissions of a pollutant 

are common-sense considerations in determining which pollutants should be regulated. Finally, 

commenters’ position here is internally inconsistent in that their criticism of EPA’s approach is 

that it is too similar to the analysis that commenters contend is required.

Comment 4.2-5: Multiple commenters submitted comments on whether EPA has a rational basis 

for regulating CO2 emissions from power plants under section 111(b). Some commenters 

supported the conclusion that the information and discussion in the record provided a rational 

basis for EPA to regulate CO2 emissions from power plants under section 111(b). Other 

commenters state that EPA has not shown that it has a rational basis.

Response 4.2-5: As discussed in detail in Section III.A. of the preamble, EPA has concluded that 

it has a rational basis for regulating CO2 emissions from EGUs under section 111. The 

information and analysis in Sections II.A and B. of the preamble, as well as EPA’s responses to 

comments and elsewhere in the record, demonstrate that CO2 endangers human health and 

welfare and that EGU CO2 emissions contribute significantly to CO2 levels in the atmosphere.
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Comment 4.2-6: Some commenters stated that EPA cannot rationally find that CO2 emissions 

from the new power plants that will be covered by the new source rule contributes significantly 

to emissions of CO2 that endanger public health and welfare because EPA expects few, if any, 

such facilities to be built. Similarly, some commenters stated that EPA cannot consider the CO2

emissions from existing sources that would be regulated under section 111(d) in deciding 

whether to regulate new sources under section 111(b). They contend that, even if it is rational to 

regulate existing sources, EPA must show that it is rational to regulate new sources. Finally, 

some commenters stated that any endangerment finding has to be based on the significant 

contribution of sources that will be regulated under section 111(b) and cannot include the 

contribution of existing sources that would be regulated under section 111(d).

Response 4.2-6: These comments mistakenly focus on the emissions and resulting 

endangerment arising only from sources that will become subject to the new source standard. 

EPA disagrees that the proper analysis under either a rational basis analysis or for an 

endangerment finding is based on subsets of the sources in the source category. First, the 

rational basis analysis is appropriately done with respect to the source category as a whole, 

because the issue is whether it is rational to regulate the emissions of a given pollutant from that 

source category and that encompasses both regulation of new sources under 111(b) and of 

existing sources under 111(d). It is important to remember that the pollutants regulated under 

section 111(b) limits the scope of what pollutants can be regulated under 111(d), see section 

111(d)(1)(A)(ii), and thus the consideration of what pollutants should be regulated under section 

111(b)(1)(B) also implicates what pollutants can be regulated under section 111(d). Further, 

where (as here, with CO2) the pollutant at issue is not a criteria pollutant or a HAP, regulation 

under section 111(d) is where emissions from existing sources will be covered. For these 

reasons, EPA reasonably considers emissions from both new and existing sources in determining 

what pollutants should be regulated under section 111 from listed source categories. Since 

endangerment determinations under section 111 (b) must be made on the basis of the source 

category (“[h]e shall include a category of sources in such list if in his judgment it causes, or 

contributes to, air pollution which may reasonably be anticipated to endanger public health or 

welfare”), it is rational to do so.

With respect to an endangerment finding (if one were required here), Section 111(b)(1)(A) 

clearly requires that the finding will be made with respect to the source category as a whole and 

says nothing that would support the argument that limits the analysis to new sources. 

Comment 4.2-7: Multiple commenters submitted comments on whether, if an endangerment 

finding is necessary, the information and discussion in the record demonstrate that power plants 

contribute significantly to emissions of CO2 that endangers public health and welfare. Some 

commenters supported EPA’s view that, if an endangerment finding is necessary, the information 

and discussion in the record provide a basis for EPA to conclude that emissions of CO2 endanger 

public health and welfare. Other commenters assert that EPA’s 2009 endangerment finding 

cannot be used as the endangerment finding here and that EPA’s information and analysis here is 

not adequate to support an endangerment finding. Further, some commenters argue that EPA 

cannot rely on the 2009 endangerment finding for the cause-or-contributes-significantly 

component of the endangerment finding because it was made with respect to motor vehicle 

emissions and because the relevant CAA provision at issue there (CAA section 202(a)) requires 

no finding of significance.
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Response 4.2-7: EPA’s explanation of the basis for an endangerment finding, if required, is in 

Section III of the preamble. The information and analysis supporting the conclusions that CO2

endangers public health and welfare, and that EGUs significantly contribute to that 

endangerment, are discussed in Section II of the preamble. The arguments that, if an 

endangerment finding is necessary here, EPA cannot use the 2009 endangerment finding as the 

necessary finding are based on a misunderstanding of the role of the 2009 endangerment finding 

in EPA’s analysis in this rule. EPA is not saying that the 2009 finding is the requisite finding 

here. Instead, if an endangerment finding is required, then the information and analysis in that 

finding, coupled with the more recent information that confirms and expands on that finding, 

support a finding that CO2 endangers human health and welfare. Finally, the comments that state 

that the 2009 endangerment finding cannot support the “cause-or-contribute significantly” 

finding here attack a position that EPA is not taking. EPA’s discussion of the 2009 

endangerment finding relates to the issue of whether CO2 endangers public health and welfare, 

not whether EGUs contribute significantly to CO2 emissions. In short, as discussed in detail in 

Section III.A. of the preamble, if EPA is required to make an endangerment finding here, the 

information and analysis support both that CO2 endangers human health and welfare and EGU 

CO2 emissions contribute significantly to CO2 levels in the atmosphere.

Comment 4.2-8: Some commenters stated that EPA cannot determine whether a source category

meets the “significantly contributes” component of an endangerment finding without 

determining a minimum threshold for what is “significant.” Other commentors agreed with EPA 

that the agency can determine that a given contribution is significant without determining the 

smallest contribution that would be considered significant.

Response 4.2-8: EPA’s view is that it does not need to set a minimum threshold for what is 

“significant” when it considers the “contributes significantly” component in making an 

endangerment finding. Here, if an endangerment finding is required, the information 

demonstrates that the emissions from EGUs constitutes a “significant contribution.” 

Comment 4.2-9: Commenters state that EPA’s logic is flawed in that the agency assumes that 

because a listed source category has been found to contribute significantly to emissions of one 

pollutant, that source category must cause or contribute significantly to an endangerment of 

public health and welfare for a different pollutants.

Response 4.2-9: These comments misstate EPA’s position. EPA’s view is not that a source 

category that was listed under section 111(b)(1)(A) for one pollutant necessarily causes or 

significantly contributes to an endangerment of public health and welfare for a different 

pollutant. EPA’s view is that once a source category is listed under section 111(b)(1)(A), the 

CAA requires no further endangerment finding for that source category when EPA sets standards 

for the pollutants that it emits under section 111. Instead, EPA determines which pollutants 

emitted by the listed source category should be regulated based on a rational basis analysis.

4.3 CALCULATING "CONTRIBUTION"

Comment 4.3-1: Commenter 9682 states the NSPS provisions must be interpreted in pari 

materia with the NAAQS standard setting provisions and, in particular, the NSPS provisions, 

like the NAAQS provisions, must be construed as limited to preventing exposures to localized 
4-31

pollutants-that is, pollutants whose concentrations vary by locality as opposed to dispersing 

throughout the globe as do GHG emissions.

Response 4.3-1: The comment is misplaced. There is no reference to the NAAQS in section 

111 (a), section 111 (a) and (b) set technology-based NSPS unlike the purely health-based 

ambient standards, there is no language in the text of section 111 (a) limiting consideration to 

localized air pollution effects (and of course, PM, PM precursors, and ozone precursors are all 

pollutants with regional as well as local effects, and are routinely the subject of NSPS), and 

section 111 (a) and (b) do not limit standards under these provisions to criteria pollutants. EPA, 

in fact, has routinely issued section 111 (b) standards of performance for non-criteria pollutants 

since the inception of implementation of these provisions. See, e.g. 40 CFR part 60.192 

(standards for fluorides emitted by primary aluminum facilities, first issued in June 1980).

Comment 4.3-2: Commenter 9514 states the courts (including Coal. for Responsible Regulation, 

Inc. v. EPA, 684 F.3d 102, 116-27 (D.C. Cir. 2012) and Util. Air Regulatory Grp. v. EPA, 134 S. 

Ct. 418, 2013 U.S. LEXIS 7380 (Oct. 15, 2013)) found that the Endangerment Finding was 

procedurally sound, consistent with Supreme Court case law, and amply supported by the 

administrative record, observing that "[t]he body of scientific evidence marshaled by EPA in 

support of the Endangerment Finding is substantial." 

Response 4.3-2: EPA agrees with this comment, and notes that this decisive judicial precedent 

has not dissuaded commenters from presenting identical or nearly identical arguments to EPA 

again in this rulemaking. See section 4.1 above.

Comment 4.3-3: Commenter 10025 supplies documents that address the effects of climate 

change in humans, especially in children.

Commenter 9589 states it is our obligation to put people before polluters and protect our children 

and future generations from the effects of climate change. This historic standard is a game 

changer for the climate and health in America and around the world.

Response 4.3-3: EPA acknowledges these commenters’ general support for the proposed 

standards.

Comment 4.3-4: Commenter 9514 states the Regulatory Impact Analysis (RIA) provides an 

overview of the pressing threats posed by greenhouse gas emissions and ably canvasses the 

dangers that the New Source Performance Review (NSPS) must combat. Commenter provided 

extended discussion of the harms associated with climate change, and provided extensive 

citations; discussed new research, reports and assessments showing the increasing severity of 

harm.

Response 4.3-4: This comment is consistent with EPA’s own reading and interpretation of the 

scientific evidence. See section 4.2 above.

Comment 4.3-5: Commenter 10025 states EPA should explain the specific goal of the proposed 

rule, what it means for our children and posterity in terms of global heating, and how much the 

economic interests of the fossil fuel industry have played a role in this proposed rule versus 

atmospheric health. Commenter calls for EPA to disclose to the public how this rule compares to 
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the science-based emission reduction levels needed from power plants. Commenter adds nothing 

in this proposed rule says that the rule is aimed at adequately reducing carbon emissions from 

these sources at levels that are in line with a national plan to achieve atmospheric health and 

climate recovery according to the best available science. 

Commenter 5605 states agreement that carbon dioxide and other global warming pollutants that 

endanger public health and welfare should be limited and that we have an obligation to protect 

our children and future generations from these effects by addressing these causes and impacts, 

including carbon pollution.

Response 4.3-5: EPA is addressing GHG emissions. The agency has issued standards for GHG 

emissions from all cars, SUVs, light trucks, pickups and vans, vocational vehicles, and 

combination tractors, in some instances up to model year 2025. The agency recently proposed 

further GHG standards for heavy duty vehicles and engines (including trailers attached to 

combination tractors) through the 2027 model year. In this proceeding EPA is addressing CO2

emissions from the largest stationary source emitting source category. In doing so, of course, 

EPA can only act within the limits of its delegated statutory authority, and so lacks legal 

authority to adopt some of the more wide-ranging actions urged by this and other of the 

commenters on this issue.

Comment 4.3-6: Commenter 10119- states EPA must "tak[e] into account . . . any nonair quality 

health and environmental impact and energy requirements" of the standard11 stating that EPA did 

not undertake such an analysis in the 2012 Proposed Rule and in the new Proposed Rule. 

Commenter adds hydraulic fracturing and other unconventional gas drilling and production 

techniques have a wide array of adverse effects on public health and the environment, citing 

additional studies have been published since the 2012 Proposed Rule comments. Commenters 

10087, 10087 state using CCS for EOR would result in a net increase in CO2 emissions. 

Commenter 10087 states that using the CO2 captured from CCS for EOR will likely lead to an 

increase in net CO2 emissions because the CO2 from the power plant may be stored, but only by 

aiding in the production of oil.12 Much of the oil will be turned into fuel with resulting CO2

emissions, and thus, the CO2 emissions from the oil would be greater than the stored CO2

emissions. 

Commenter 9396 states EPA's assertion that non-air impacts of Section 111(b) NSPS standards 

are not within the scope of the rulemaking seems at odds with legal standards. In Sierra Club, the 

court noted that "crucial issues such as waste disposal...which may continue to limit overall 

acceptability of this technology remain to be answered."13 This, coupled with the direct 

description of Congressional intent that the Administrator must "consider non-air quality health 

and environmental impacts in making [a 111 NSPS] determination"14 suggests that waste stream 

analysis is indeed a required component of an NSPS determination. As part of the waste stream 

 

11 CAA Section 111(a)(1); 42 U.S.C. Section 7411(a)(1).

12 William Yeatman, EPA's Carbon Pollution Standard May INCREASE CO2 Emissions!, GlobalWarming.org, 

Sept. 25, 2013, http://www.globalwarming.org/2013/09/25/epas-carbon-pollution-standard-may-increase-co2-

emissions.

13 Sierra Club v. Costle, 657 F.2d at 341, fn157.

14 H.R. 95-294. 95th Cong., 2 Leg. His.2478 (1977).
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evaluation, EPA must consider where disposal is appropriate and not cost prohibitive. The record 

does not support that this evaluation was adequately undertaken. Based on the SAB letter to the 

Administrator, while the SAB has deferred to EPA's erroneous assertion that waste streams are 

not subject to analysis, the SAB has concluded that the concern regarding "unintended multimedia consequences" warrant a review of the underlying science by the National Research 

Council or the SAB.15 This assertion should serve as a clear warning to EPA that it has failed to 

sufficiently review and establish the efficacy of sequestration for the purposes of establishing 

CCS as NSPS.

Commenters 9201 states there are many other environmental effects related to the proposed 

NSPS that EPA fails to examine. Several include: Groundwater quantity and quality from 

increased shale gas development; Air Quality impacts from shale development: Impacts from 

building out natural gas infrastructure to meet power sector demand for natural gas; Impacts of 

new CO2 pipelines; Water Use; and Impacts on Wildlife.

Response 4.3-6: The EPA agrees, emphatically, that it must consider nonair quality health and 

environmental impact as part of the process of assessing whether a system of emission reduction 

is “best” and is “adequately demonstrated”. EPA’s consideration of these issues with respect to 

the standard of performance for new coal-fired steam electric generating units is set out in 

preamble section V.O. We further disagree with the commenters’ statement that EPA failed to 

consider either the efficacy or cost of disposal of captured CO2. See preamble section V.I.5 and 

V.N. The comment urging the EPA to account from the rule’s impacts on hydraulic fracturing 

are misplaced. Natural gas use is increasing, but is doing so for reasons unrelated to this 

rulemaking. See RIA chapter 4. The commenter also evidently assumes CH4 emissions 

associated with natural gas production and transport are uncontrollable, which the EPA does not 

believe to be the case.

The commenters also do not fully represent the facts regarding SAB consideration of issues 

relating to geologic sequestration. In developing the rules for injection of CO2 for permanent 

disposal – the Class VI rules -- EPA engaged with the SAB, providing detailed information on 

key issues relating to geologic sequestration – including monitoring schemes; methods to predict 

and verify capacity, injectivity, and effectiveness of subsurface CO2 storage; and characterization 

and management of risks associated with plume migration and pressure increases in the 

subsurface.16 In addition, EPA developed a peer reviewed Vulnerability Evaluation Framework, 

which served as a technical support document for both the Class VI and Subpart RR rules. 17 This 

extensive interaction preceded the present rulemaking. 

In the section 111 (b) rulemaking here, the SAB Work Group, in a letter endorsed by the full 

SAB Committee, found that “while the scientific and technical basis for carbon storage 

 

15 Letter to Regina McCarthy from EPA Science Advisory Board. January 29, 2014. EPA-SAB-14-03 p. 3.

16 See: http://yosemite.epa.gov/sab/sabproduct.nsf/0/AD09B42B75D9E36D85257704004882CF?OpenDocument.

17 See: http://www.epa.gov/climatechange/Downloads/ghgemissions/VEF-Technical_Document_072408.pdf. 
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provisions is new and emerging science, the agency is using the best available science and has 

conducted peer review at a level required by agency guidance.” 18

Comment 4.3-7: Commenter 10951 states the policies EPA is promoting have been proven to 

drive up electricity prices everywhere those policies have been tested. These economic impacts 

will in turn impair public health and welfare because the effect will be felt by those least able to 

afford them. Dollars spent on higher energy bills will in turn crowd out dollars that would 

otherwise be available to pay for good nutrition and health care. Jobs lost because of higher 

electricity costs means less money for health insurance. It is a truism that wealth equals health, 

and it is equally true that health will deteriorate as electricity costs rise, particularly for lower 

income people and those living on fixed incomes. Commenter continues That in a report 

prepared for the American Coalition for Clean Coal Electricity entitled Energy Cost Impacts on 

American Families, 2001-2012, attorney and economist Eugene Trisko reported that electricity

cost increases fall disproportionately on those least able to afford them. These effects were also 

described in the attached report, The Social Costs of Carbon No, the Social Benefits of Carbon 

and are graphically displayed in the following chart. Further, Commenter 10951-6171 states 

energy poverty is the great global challenge of the future. 3.5 billion people, including 1.2 billion 

children, do not have access to an adequate supply of energy.8 There can be no improvement in 

living standards in developing societies unless energy poverty is solved. Every single one of the 

United Nations Millennium Development Goals requires access to electricity as a necessary

perquisite.9 (Global Energy Institute, 2008). The U.N. Secretary General has called energy the 

golden thread that connects economic growth, increased social equity and an environment that 

allows the world to thrive.19

As discussed below, every ten-fold increase in electricity is linked to a stunning 10-year increase 

in life spans, and coal is the only sustainable fuel with the scale to meet the primary energy needs 

of the world's rising populations and economies. As a result, coal is the world's fastest growing 

fuel, and coal use expanded nearly 50 percent this past decade. The example the United States 

sets for the rest of the world thus cannot be that electricity should be made scarcer and more 

expensive. The world needs more, not less, electricity, and coal remains the leading global and 

domestic electricity resource.

Response 4.3-7: The EPA is required to consider energy requirements as part of its 

determinations under section 111 (a), and has done so here. See preamble section V.O.3. As 

found there, and in RIA chapter 4, the standards of performance here are not anticipated to have 

significant impact on energy prices because .in the baseline, all projected unplanned capacity --

projected capacity additions that are not under construction. -- affected by this standard during 

the analysis period would already be compliant with the rule’s requirements (e.g., natural gas 

combined cycle units, low capacity factor natural gas combustion turbines, and small amounts of 

coal-fired units with carbon capture and storage (CCS) supported by Federal and State funding).

 

18 Memorandum of Jan. 7, 2014, from SAB Work Group Chair to Members of the Chartered SAB and SAB 

Liaisons, p. 3. The letter was subsequently endorsed by the full SAB. Work Group Letter of Jan. 24, 2014, as edited 

by the full Committee.

19 http://www.un.org/News/Press/docs/2012/sgsm14242.doc.htm
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4.4 SOCIAL COST OF CARBON

4.4.1 Methodology 

Comment 4.4-1: Commenter 9681 states the IWG's use of Integrated Assessment Models 

(IAMs) reflects the best available, peer-reviewed science to tally the benefits and costs of 

specific regulations with impacts on carbon dioxide emissions. The IAMs include benefits and 

costs that have been quantified to date. Other modeling assumptions represent reasonable choices 

on the part of the IWG. For example, cutting off the analysis after around 300 years simply

reflects the fact that any benefits and costs thereafter are de minimis given the strong impact 

discounting has on reducing the value of distant effects in the SCC. The IWG should indeed

periodically update its choice of socio-economic scenarios to reflect major changes in economic 

growth projections and other factors influencing emissions trajectories. However, the long-term 

emissions impact of any one particular energy efficiency or other carbon reduction standard is 

only marginal to the trajectory of socio-economic scenarios, minimizing any risk of double 

counting the regulatory benefits.

Commenter 9194 states multiple experts indicate that the modeling used does not provide a 

sufficient range of accuracy for policy-making purposes. OMB and the IWG failed to use the 

latest science which indicates that the equilibrium climate sensitivity (ECS) distributions used by

the modelers caused the SCC to be over-stated. The models employed and the assumptions used 

were not subjected to peer review nor were the 2010 and 2013 SCC estimates developed by the 

IWG.

Commenter 10501 states that furthermore, the SCC calculation assumes there is only one, and as 

yet unproven, solution to all potential problems that a warming planet might cause, i.e. CO2

emissions control. Clearly there may be other high-confidence approaches to mitigating specific 

problems that global warming may cause, such as building sea walls in the US to prevent coastal 

flooding from sea level rise. Such alternatives may be much less costly than the impact of 

unilateral USA CO2 emissions control regulations that have very little chance of success, given 

the current world political environment and lack of a world-wide CO2 emissions control 

agreement. China, India and other rapidly developing countries will dominate world-wide CO2

emissions for the next several hundred years, rendering unilateral USA CO2 emissions control 

totally ineffective in avoiding the damages purportedly represented by the SCC. Therefore, the 

SCC cannot in any rational, credible argument be considered to be an appropriate economic 

metric that can be used to justify the proposed new EPA rule. The rational decision process 

normally used in US government and industry to weigh cost and benefits of several competing 

alternative solutions to anticipated problems appears to be totally absent from the SCC 

methodology. In our typical research team member's more than 50 years of experience in 

addressing complex problems and critical decisions with life or death consequences for manned 

space mission crew members, we can only view the IWG's rationale and process for computing 

SCC as totally lacking in common sense or any true scientific value. It is unthinkable in our 

experience to expose the entire population of the USA to such economic risks from electrical 

power cost increases expected from this new EPA rule, without a more certain outcome 

regarding avoidance of SCC damages used to justify the regulation.
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Commenter 9401-4769 continues history provides an important lesson on how increased energy

costs have both a direct and indirect impact on reduced employment and GHG leakage. Figure 2 

details the relationship between rising natural gas prices and falling employment in the 

manufacturing sector. According to EIA, electricity prices rose 210 percent from 1999 to 2008. 

During the time period of 2000 to 2008, the manufacturing sector shut down an estimated 54,905 

facilities, decimating the economy of thousands of communities across the country. During that 

same time period, net manufactured goods imports grew by 46 percent, a clear indication of loss 

of US manufacturing competitiveness. A key point that needs to be emphasized is that if 

electricity prices rise because of the EPA GHG rule, manufacturing employment and GHG 

leakage would have the same effect as higher natural gas prices. 

Commenter 3593-7453 states EPA fully recognizes that increased regulatory costs fall more 

heavily on minorities, on women and especially mothers who are single parents, and on the 

elderly, and if they did not before receiving this comment, they do now. EPA acknowledges its 

responsibilities with regard to equal protection of citizens. These considerations were ignored for 

the reason that impacting climate which occurs under no scenario of this rule was not the 

objective. Indeed, research shows that such regulations will create massive job losses and a 

major loss of GDP. These impacts -- both those flowing directly from the higher electricity rates 

and those flowing indirectly therefrom, and flowing directly or indirectly instead from the 

industrial policy which the proposed rule represents -- have human and environmental 

consequences, also not considered. The only rational reason for declining to consider this is that 

this outcome is the objective, which is to say, it was not attained by consideration but 

predetermined. This is particularly troublesome given the failure of the regulation to achieve its 

stated goal, by the admission of senior EPA officials.

Commenter 9650 states EPA uses a flawed methodology in calculating the social cost of carbon 

("SCC") valuation that inflates the costs associated with climate change. Commenter 502 states 

there are too many uncertainties in both the integrated assessment models used to derive SCC 

values to derive values to be useful in regulatory decision making. 

Commenter 9650 states the integrated assessment models ("IAMs") constructed to estimate the 

SCC have flaws (e.g. the discount rate is arbitrary; the model's descriptions of climate change 

impact are ad hoc, and no theoretical or empirical foundation). 

Commenter 9685 states emissions input errors: concentrations generated for the IAMs are 

seriously flawed. The models are based on emissions scenarios that have not been validated. The 

SCC report then raises a major transparency issue: "we decided to rely on the recent Stanford 

Energy Modeling Forum exercise, EMF-22. EMF-22 uses ten well-recognized models to 

evaluate substantial, coordinated global action to meet specific stabilization targets." A key

advantage of relying on these data is that GDP, population, and emission trajectories are 

internally consistent for each model and scenario evaluated. The problem with this approach: the 

Stanford Energy Modeling Forum is not a public process. EPA needs to assure that any

participation by government employees conforms to the DQA requirements. EPA needs to: a. 

Identify the EPA employees who participated in the EMF 22 exercise, b. Post the information 

provided to the EMF 22 exercise, and c. Provide the results of the exercise related to EPA input, 

especially for EPA analysis.
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Commenter 9685 states SCC recognizes the problems with the IPCC standard SRES scenarios as 

"extreme outliers" but then the SCC inexplicably chooses to use even less reliable scenarios but, 

there is no detailed justification for the selection of the models. As can be seen in the table 

above, the divergence in the emissions begins in 2030. And by 2050 the divergence is substantial 

and it grows even larger by 2100. The SCC makes the assumption that the scenarios have equal 

probability. EPA needs to explain this rationale.

Commenter 9685 states that a major question is: why were the four scenarios selected? Since the 

EMF is a secret process, there is no documentation that describes the rationale for the "modelers' 

judgment". Nor do we know who the "modelers" were or whether their "judgment" has ever been 

validated by comparing their projections with data. The IAMs use these scenarios under the 

assumption that the scenarios are equally likely, a highly suspect assumption.

Commenter 9685 states the IWG attempted to justify its selection of emissions scenarios by a 

casual "comparison" to the EIA AEO 2009. However, the selected emissions scenarios are well 

above EIA AEO2013/IEO2013 projections. For some reason the IWG chose to ignore the most 

recent EIA analysis that has projections to 2040. The average of the emissions scenarios is 

roughly 20% above the EIA forecast. The cumulative difference for the 10 years 2010-2020 is 6 

Gigatons CO2 for the U.S. alone and the cumulative difference grows to over 50 Gigatons CO2

by 2040. Since the "damages" are attributed to the atmospheric concentrations (related to 

cumulative emissions) the distortion is egregious. The same problem can be found in comparing 

the scenarios for global emissions. EPA must reject the selected emissions scenarios as "extreme 

outliers" (the same standard that was used to reject the IPCC SRES scenarios). The scenarios 

lead to an significant overestimate of the emissions that are input to the model that lead to a 

significant and growing error in the atmospheric concentration of greenhouse gases. Commenter 

concludes that EPA should discard the SCC 2010 and SCC2013 results on this basis alone.

Commenter 9685-7213 states damage function errors: catastrophic estimates are qualitative 

speculation based on "expert elicitation". The SCC attributes quantitative certainty to qualitative 

speculation that has a major influence on the Damage Function results. As is obvious in the table 

below the range of impacts is highly questionable in terms of timing and impact. OMB should 

have rejected this approach. EPA should expose the details of "expert elicitation" so that the 

public can provide comment. The public needs to know: 1) Who were the "experts" "elicited"? 

and 2) What was the specific data provided? 3. Was all data given the same weight? 

Commenter 9685 states model errors: if the AR4 climate models are wrong, the IAMs are wrong. 

Recent House testimony shows the failure of the models used to define the IAM equilibrium 

climate sensitivity "So it's clear that the IPCC modeling community has known about the 

modeling failure (divergence between the model predictions and real data) for over 20 years. The 

SCC IAMs were constructed on the backs of these same flawed models. EPA must take 

immediate action to correct this abuse of the taxpayer: not one more dime should be spent on the 

US models used in the IPCC AR5. Those responsible should be held accountable." The 

independent analysis conducted by Dr. Christy would have been difficult, if not impossible, to 

document without the contribution to transparency by the Royal Netherlands Meteorological 

Institute (KNMI) Climate Explorer (climexp.knmi.nl). The KNMI provided a comprehensive 

collection of climatic data sets and analysis tools. All of the IPCC AR5 model runs are available 

to the public with a user-friendly interface. Why didn't our own government do the same? What 
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did the modelers have to hide? EPA needs to follow the example of the Dutch government and 

implement a similar requirement for all analysis involved in climate policy, including posting on 

an archive website: 1. Documentation of all models used by EPA, 2. An archive of all versions of 

models used for specific policy or regulations, and 3. An archive of all model runs used for any

policy analysis including the input variables. The IQA guidelines provide for this, but agencies 

appear to routinely disregard their responsibility.

Commenter 9685 stats the IAMs are nested and not transparent and compound major errors at 

every stage. Each IAM progresses through a series of cumulative, compounding errors that result 

in "costs" that bear no resemblance to reality. The emissions scenarios are outliers compared to 

actual data and the EIA projections. The scenarios should have been rejected based on the same 

rationale that the IPCC SRES scenarios were rejected by the IWG. 

Commenter 9685 continues these flawed scenarios are then used in a Monte Carlo analysis that 

cloaks the errors in an opaque process. The pseudo sophistication implied by using a Monte 

Carlo analysis is at best misleading. If the input data is wrong, the output distributions are wrong 

(this is Garbage In, Garbage Out). As discussed below, the greenhouse gas emissions data are 

wrong. Therefore the resulting greenhouse gas concentrations are seriously flawed. The climate 

sensitivity related to the flawed concentrations based on flawed emissions is based on the failed 

IPCC AR4 models that are demonstrated failures. The Equilibrium Climate Sensitivity (ECS) 

probability density functions (PDFs) developed using the AR4 models are fatally flawed. The 

resulting temperatures based on the flawed emissions driving flawed driving flawed 

concentrations driving flawed climate sensitivity are then input to "damage" calculations based 

on fictional un-validated formulations. These results are even more egregiously flawed.

Commenter 10091 states there is a misleading disconnect between climate change and the SCC 

in the IAMs. It is generally acknowledged, the results from IAMs are highly sensitive not only to 

the model input parameters but also to how the models have been developed and what processes 

they try to include. One prominent economist, Robert Pindyck of M.I.T. recently wrote (Pindyck, 

2013) that the sensitivity of the IAMs to these factors renders them useless in a policymaking 

environment: Given all of the effort that has gone into developing and using IAMs, have they

helped us resolve the wide disagreement over the size of the SCC? Is the U.S. government 

estimate of $21 per ton (or the updated estimate of $33 per ton) a reliable or otherwise useful 

number? What have these IAMs (and related models) told us? I will argue that the answer is very

little. As I discuss below, the models are so deeply flawed as to be close to useless as tools for 

policy analysis. Worse yet, precision that is simply illusory, and can be highly misleading. [A]n 

IAM-based analysis suggests a level of knowledge and precision that is nonexistent, and allows 

the modeler to obtain almost any desired result because key inputs can be chosen arbitrarily. 

Nevertheless, the EPA incorporates the IWG2013 determinations of the SCC into this proposed 

regulation ill-advisedly so in our opinion. 

Commenter 10091 continues stating if one considers the following: the social cost of carbon 

should reflect the relative impact on future society that human-induced climate change from 

greenhouse gas emissions would impose. In this way, we (policymakers and regular citizens) can 

decide how much (if at all) we are willing to pay currently to reduce the costs to future society. It 

would seem logical that we would probably be more willing to sacrifice more now if we knew 
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that future society would be impoverished and suffer from extreme climate change than we 

would be willing to sacrifice if we knew that future society would be very well off and be subject 

to more moderate climate change. We would expect that the value of the social cost of carbon 

would reflect the difference between these two hypothetical future worlds - the SCC should be 

far greater in an impoverished future facing a high degree of climate change than an affluent 

future with less climate change. But if you thought this, you would be logically correct, but 

wrong. Instead, the IAMs as run by the IWG2013 produce nearly the opposite result the SCC is 

far lower in the less affluent/high climate change future than it is in the more affluent/low 

climate change future. Such a result is not only counterintuitive but misleading. We illustrate this 

illogical and impractical result using the DICE 2010 model (hereafter just DICE) used by the 

IWG2013 (although the PAGE and the FUND models generally show the same behavior). The 

DICE model was installed and run at the Heritage Foundation by Kevin Dayaratna and David 

Kreutzer using the same model set up and emissions scenarios as prescribed by the IWG2013. 

The projections of future temperature change (and sea level rise, used later in the Comment) 

were provided to us by the Heritage Foundation. The figure below shows the projections of the 

future change in the earth's average surface temperature for the years 2000-2300 produced by 

DICE from the five emissions scenarios employed by the IWG2013. The numerical values on the 

right-hand side of the illustration are the values for the social cost of carbon associated with the 

temperature change resulting from each emissions scenario (the SCC is reported for the year 

2020 using constant $2007 and assuming a 3% discount rate numbers taken directly from Table 

A3 of the IWG2013 report). The temperature change can be considered a good proxy for the 

magnitude of the overall climate change impacts. Notice in the figure above that the value for the 

SCC shows little (if any) correspondence to the magnitude of climate change. The MERGE 

scenario produces the greatest climate change and yet has the smallest SCC associated with it. 

The "5th Scenario" is a scenario that attempts to keep the effective concentration of atmospheric 

carbon dioxide at 550 ppm (far lower than the other scenarios) has a SCC that is more than 20% 

greater than the MERGE scenario. The global temperature change by the year 2300 in the 

MERGE scenario is 9dC while in the "5th Scenario" it is only 3dC. The highest SCC is from the 

IMAGE scenario a scenario with a mid-range climate change. All of this makes absolutely no 

logical sense - and confuses the user. 

Commenter 10091 states if the SCC bears little correspondence to the magnitude of future 

human-caused climate change, then what does it represent? The figure below provides some 

insight. When comparing the future GDP to the SCC, we see, generally, that the scenarios with 

the higher future GDP (most affluent future society) have the higher SCC values, while the 

futures with lower GDP (less affluent society) have, generally, lower SCC values. Combining the 

results from the two figures above thus illustrates the absurdities in the IWG's use of the DICE 

model. The scenario with the richest future society and a modest amount of climate change 

(IMAGE) has the highest value of the SCC associated with it, while the scenario with the poorest 

future society and the greatest degree of climate change (MERGE) has the lowest value of the 

SCC. A logical, thinking person would assume the opposite. While we only directly analyzed 

output data from the DICE model, by comparing Tables 2 and Tables 3 from the IWG2010 

report, it can be ascertained that the FUND and the PAGE models behave in a similar fashion. 

Commenter 10091 states this counterintuitive result occurs because the damage functions in the 

IAMs produce output in terms of a percentage decline in the GDP which is then translated into a 
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dollar amount (which is divided by the total carbon emissions) to produce the SCC. Thus, even a 

small climate change-induced percentage decline in a high GDP future yields greater dollar 

damages (i.e., higher SCC) than a much greater climate change-induced GDP percentage decline 

in a low GDP future. In principle, the way to handle this situation is by allowing the discount 

rate to change over time. In other words, the richer we think people will be in the future (say the 

year 2100), the higher the discount rate we should apply to damages (measured in 2100 dollars) 

they suffer from climate change, in order to decide how much we should be prepared to sacrifice 

today on their behalf. Until (if ever) the current situation is properly rectified, the IWG's 

determination of the SCC is not fit for use in the federal regulatory process, such as this EPA 

regulation, as it is deceitful and misleading.

Commenter 9681 sated that updates to the SCC should also consider other models that are 

similarly peer reviewed and based on the state of the art of climate-economic modeling. One 

such model is Climate and Regional Economics of Development (CRED); another is the World 

Bank's ENVironmental Impact and Sustainability Applied General Equilibrium (ENVISAGE) 

model. CRED borrows its fundamental structure from William Nordhaus's DICE and RICE 

models but also offers significant changes. For one, it uses updated damage functions and 

Marginal Abatement Cost Curves (MACC). Moreover, it uses different global equity weights, 

and uses additional state-of-the-art methodologies. ENVISAGE represents a broader modeling 

effort by the World Bank, where perhaps the largest contribution is a more detailed sectoral 

breakdown, using 57 different sectors. This level of detail allows for a more detailed view of 

agriculture as well as food and energy sectors that are particularly important to any climateeconomy modeling. No model fully captures the costs of climate impacts to society. In fact, 

virtually all uncertainties and current omissions point to a higher SCC value. That makes it 

essential to use the established IWG process, which provides for updating the SCC estimates 

every two to three years in order to capture the advances in physical and social sciences that have 

been incorporated into the models during the intervening period, in order to revisit both the 

choice of models and the key inputs used.

Commenter 9681 continues the IWG's choice of three IAMs was fully justified but should still be 

revisited in its next iteration. In its calculations of the SCC, the IWG relied on the three 

Integrated Assessment Models (IAMs) available at the time, all with a long record of peerreviewed publications that link physical and economic effects: the Dynamic Integrated Model of 

Climate and the Economy (DICE), the Climate Framework for Uncertainty, Negotiation, and 

Distribution (FUND), and Policy Analysis of the Greenhouse Effect (PAGE). The government's 

first SCC estimates, published in 2010, used the then-current versions of the models; the recent 

update employed revised, peer-reviewed versions of the models but maintained the underlying 

assumptions of the 2010 IWG analysis. As stated by the 2010 IWG, the main objective of [the 

2010 IWG modeling] process was to develop a range of SCC values using a defensible set of 

input assumptions grounded in the existing scientific and economic literatures. DICE, FUND, 

and PAGE are well-established, peer-reviewed models. They represent the state-of-the-art IAMs. 

Each of these models has been developed over decades of research, and has been subject to 

rigorous peer review, documented in the published literature. However, updates to the SCC 

should also consider other models that are similarly peer reviewed and based on the state of the 

art of climate-economic modeling. One such model is Climate and Regional Economics of 

Development (CRED); another is the World Bank's ENVironmental Impact and Sustainability
4-41

Applied General Equilibrium (ENVISAGE) model. CRED borrows its fundamental structure 

from William Nordhaus's DICE and RICE models but also offers significant changes. For one, it 

uses updated damage functions and Marginal Abatement Cost Curves (MACC). Moreover, it 

uses different global equity weights, and uses additional state-of-the-art methodologies. 

ENVISAGE represents a broader modeling effort by the World Bank, where perhaps the largest 

contribution is a more detailed sectoral breakdown, using 57 different sectors. This level of detail 

allows for a more detailed view of agriculture as well as food and energy sectors that are 

particularly important to any climate-economy modeling. No model fully captures the costs of 

climate impacts to society. In fact, virtually all uncertainties and current omissions point to a 

higher SCC value. That makes it essential to use the established IWG process, which provides 

for updating the SCC estimates every two to three years in order to capture the advances in 

physical and social sciences that have been incorporated into the models during the intervening 

period, in order to revisit both the choice of models and the key inputs used.

Commenter 9681 states the IWG should update its socio-economic assumptions to reflect the 

latest Shared Socio-economic Pathways (SSPs). One key input is the use of socio-economic 

scenarios reflected in the choice of economic growth rates and emissions trajectories. Current 

IWG socio-economic and emissions scenarios were chosen from the Stanford Energy Modeling 

Forum exercise, EMF-22, and consist of projections for income/consumption, population, and 

emissions (CO2 and non-CO2). The IWG selected five sets of trajectories, four of which 

represent business as usual (BAU) trajectories (MiniCAM, MESSAGE, IMAGE, and MERGE 

models) and a fifth that represents a CO2 emissions pathway with CO2 concentrations stabilizing 

at 550 ppm. Given the possibility of increases in emissions above those expressed by Business 

As Usual Scenarios, a high-CO2 emissions pathway should also be considered. The assumptions 

used in calculating the SCC should be updated regularly to reflect the latest thinking around 

possible scenarios, reflecting the latest Shared Socio-economic Pathways (SSPs). These SSPs 

represent the latest, consistent pathways, feeding, for example, into the latest IPCC report.

Commenter 9514 states the cost of a partial CCS standard, or, indeed, a full CCS standard, is 

small when considering a broad view of costs that accounts for the social costs of carbon. The 

Joint Environmental Commenters maintain that the social cost of carbon is much higher than the 

values in the interagency rule. Commenter 10525 states the financial benefit attributed to avoided 

CO2 pollution is actually greater than estimated by the task force, explaining that other elements 

that should have been considered by the task force but which were not include the effects on 

drought, energy, and water supply; forest fires; temperature extremes on crops and increasing 

food prices; food scarcity; impacts of air pollution from enhanced smog; and the consequences of 

total ecosystem losses.

Commenter 8925 states the 2300 extensions are inconsistent across variables, explaining 

specifically, the land-use CO2 emissions and non-CO2 radiative forcing extensions have no 

relationship to the population, GDP, and fossil and industrial CO2 emissions extensions, as 

well as each other. 

Commenter 8925 states the use of a 550 ppm policy emissions/socioeconomic projection is 

inconsistent with the other scenarios. The current averaging of the results across 

socioeconomic/emissions scenarios requires that (a) the values being averaged are from the same 
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statistical population, and (b) that the values are all equally likely. As for (a), given the 550 ppm 

scenario's assumption of a global climate policy (targeting 550 ppm in 2100), it is difficult to 

claim that it is from the same statistical population of potential futures as scenarios with no 

climate policy. As for (b), the specific 550 ppm scenarios used in the analysis assume immediate 

global cooperation in decarbonizing the global economy in achieving the 550 ppm target in 

2100.20 This is inconsistent with current global mitigation efforts and is therefore not equally 

likely to business-as-usual (BAU) futures. A similar assessment of likelihood would be 

appropriate for all the socioeconomic/emissions scenarios to avoid including scenarios that can 

be reasonably ruled out, or at least to recognize that some scenarios may be less likely. One 

commenter 8925 states the creation of the "average" 550 ppm emissions/socioeconomic scenario 

is problematic because internal consistency is lost when averaging the variables, and the 

resulting set of average socioeconomic and emissions projections do not represent an internally

consistent scenario.

Commenter 9396 The SCC is based on three Integrated Assessment Models (IAMs). The SCC 

ascribes a level of certainty that far exceeds what the IAMs actually deliver. Despite the 

admonition that the level of uncertainty associated with the development of the SCC reduced its 

relevance as a policymaking tool for the purposes of establishing cost-benefit analysis where 

GHG reductions present the predominant benefit, the US EPA is proceeding with regulatory

actions that base significant regulatory burdens on industry based on GHG reductions calculated 

using the SCC. 

Response 4.4-1: The comments mirror those submitted to the Office of Management and 

Budget’s separate comment solicitation on the SCC (78 FR 70586; November 26, 2013). As a 

member of the interagency working group (IWG) on SC-CO2, EPA has carefully examined and 

evaluated comments submitted to OMB’s separate solicitation. EPA has also carefully examined 

and evaluated all comments received regarding SC-CO2 through this rulemaking process and 

determined that the IWG responses to the comments on the OMB solicitation address the 

comments on the SC-CO2 methodology, including the models used to estimate the SC-CO2. 

Specifically, EPA concurs with the IWG’s response to these comments and hereby incorporates 

them by reference.21 The remainder of this section elaborates on these comments in the context 

of this rulemaking. 

EPA appreciates the commenters’ recommendations for potential opportunities to improve the 

SC-CO2 estimates and has considered each one in the context of this rulemaking. EPA and other 

members of the IWG have reconfirmed their commitment to periodic review and update of the 

methodology and estimates to ensure that they continue to reflect the best available science and 

economics. Furthermore, EPA has determined that the SC-CO2 methodological 

recommendations require additional research, review, and public comment before it can apply 

them to a rulemaking context. 

 

20 Clarke, L., J. Edmonds, V. Krey, R. Richels, S. Rose, M. Tavoni, 2009. International climate policy architectures: 

Overview of the EMF 22 International Scenarios. Energy Economics 31 (Supplement 2): S64-S81.

21 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 6 to 11 at 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-final-july-2015.pdf .
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To help synthesize the technical information and input reflected in the comments, and to add 

additional rigor to the next update of the SC-CO2, the EPA and all of the other IWG members 

plan to seek independent expert advice on technical opportunities to improve the SC-CO2

estimates, including the approaches suggested by commenters and summarized in this document. 

Specifically, EPA and all of the other IWG members plan to ask the National Academies of 

Sciences, Engineering, and Medicine (Academies) to examine the technical merits and 

challenges of potential approaches to improving the SC-CO2 estimates in future updates. Input 

from the Academies, informed by the comments submitted to this rulemaking and the peerreviewed literature, will help to ensure that the SC-CO2 estimates used by EPA continue to 

reflect the best available science and methodologies.

After careful evaluation of the full range of comments and associated technical issues described 

in section 4.4, EPA has determined that it will continue to use the current SC-CO2 estimates until 

further updates can be made to reflect forthcoming guidance from the Academies. EPA believes 

that the current estimates continue to represent the best scientific information on the impacts of 

climate change available in a form appropriate for incorporating the damages from incremental 

CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the current SCCO2 estimates in the analysis of illustrative benefit-cost scenarios for new sources in RIA 

Chapter 5.22 EPA will continue to consider these comments and will share the recommendations 

with the IWG as it moves forward with the Academies process.

The remainder of this section provides more detailed responses to the comments and 

recommendations. 

Choice of IAMs used to estimate the SCC.

EPA agrees with the commenters who regard the selection of the three IAMs—DICE, FUND, 

and PAGE—as the most appropriate for the purpose of estimating the SCC. EPA and all of the 

other IWG members made this determination when they began developing the SCC estimates in 

2009-2010. DICE, FUND, and PAGE are the most widely used and widely cited models in the 

economic literature that link physical impacts to economic damages for the purposes of 

estimating the SC-CO2. As stated in the 2010 TSD:

These models are frequently cited in the peer-reviewed literature and used in the IPCC 

assessment. ... These models are useful because they combine climate processes, 

economic growth, and feedbacks between the climate and the global economy into a 

single modeling framework. ... Other IAMs may better reflect the complexity of the 

science in their modeling frameworks but do not link physical impacts to economic 

damages. 

In addition, the National Academies of Science (NAS) identified these three models as "the most 

widely used impact assessment models" in a 2010 report (NAS, 2010). Furthermore, in a 

comprehensive literature review and meta-analysis conducted in 2008, the vast majority of the 

 

22 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.
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independent impact estimates that appeared in the peer-reviewed literature were derived from 

FUND, DICE, or PAGE (Tol, 2008).

While the development of the DICE, FUND and PAGE models necessarily involved 

assumptions and judgments on the part of the modelers, the damage functions are not simply

arbitrary representations of the modelers’ opinions about climate damages. Rather they are based 

on a review by the modelers of the currently available literature on the effects of climate change 

on society. The conclusions that the modelers draw from the literature, and the bases for these

conclusions are documented, and all three models are continually updated as new information 

becomes available. While EPA recognizes that there are limitations with these models, including 

some of those discussed in Pindyck (2013), nonetheless IAMs provide valuable information for 

regulatory impact analysis. In a recent article in the peer-reviewed literature, Weyant (2014) 

addressed this issue as follows: 

While Pindyck’s observations about the empirical weaknesses of IAMs or calculations of 

the SCC are worthy of careful study, the conclusion that IAMs are therefore useless 

fundamentally misconceives the enterprise. IAMs and the SCC are conceptual 

frameworks for dealing with highly complex, non-linear, dynamic, and uncertain 

systems. The human mind is incapable of solving all the equations simultaneously, and 

modeling allows making “If..., then...” analyses of the impacts of different factors. The 

models have provided important insights into many aspects of climate-change policy.

EPA thus believes that it was appropriate to base the SC-CO2 estimates on the DICE, FUND and 

PAGE models. Moving forward, EPA will continue to follow and evaluate the latest peer 

reviewed literature applying IAMs. As previously noted, EPA and all of the other IWG members 

will seek external expert advice on the technical merits and challenges of using additional 

models (e.g., CRED, ENVISAGE) to estimate the SC-CO2 and/or removing existing models 

from the ensemble (DICE, FUND, and PAGE) used to estimate the SC-CO2.

Improving the IAMs or damage functions

To date, EPA has accepted the models as currently constituted, and omitted any damages or 

beneficial effects that the model developers themselves do not include. EPA recognizes that none 

of the three IAMs fully incorporates all climate change impacts, either positive or negative. 

Some of the effects referenced by commenters (e.g., “catastrophic” effects, disease, and CO2

fertilization) are explicitly modeled in the damage functions of one or more of the current models 

(although the treatment may not be complete), and the model developers continue to update their 

models as new research becomes available. In fact, EPA and all of the other IWG members 

undertook the 2013 revision because of updates to the models, which include new or enhanced 

representation of certain impacts, such as sea level rise damages. In addition, some of the 

categories mentioned by commenters are currently speculative or cannot be incorporated into the 

damage function for lack of appropriate data. Using an ensemble of three different models was 

intended to, at least partially, address the fact that no single model includes all of the impacts. 

EPA recognizes that there may be effects that none of the three selected models addresses (e.g., 

impacts from ocean acidification) or that are likely not fully captured (e.g. catastrophic effects). 
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EPA agrees that it is important to update the SC-CO2 periodically to incorporate improvements 

in the understanding of greenhouse gas emissions impacts and will continue to follow and 

evaluate the latest science on impact categories that are omitted or not fully addressed in the 

IAMs. Also, EPA and all of the other IWG members will seek external expert advice on the 

technical merits and challenges of potential approaches to update the damage functions in future 

revisions to the SCC estimates.

For EPA’s more detailed response to comments on climate sensitivity and other climate science 

components of the IAMs, see 4.4-2, and for treatment of CO2 fertilization in the IAMs, see 4.4-6.

For EPA’s more detailed response to comments on consistency with the OMB Circular A-4, the 

Information Quality Act, and peer review, see 4.4-5.

For EPA’s more detailed response to comments on aggregation issues, see 4.4-8.

Recommendations and comments regarding socioeconomic scenarios.

The rationale for using the EMF-22 scenarios is explained in the 2010 TSD. In addition to the 

fact that they were recent, peer-reviewed, and publicly available, they had the key advantage that 

GDP, population, and emissions trajectories are internally consistent for each model and scenario 

evaluated. As noted in the 2010 TSD, the scenarios used “span a wide range, from the more 

optimistic (e.g. abundant low-cost, low-carbon energy) to more pessimistic (e.g. constraints on 

the availability of nuclear and renewables).”

OMB guidance in Circular A-4 requires benefits and costs to be computed relative to a baseline 

that represents “the best assessment of the way the world would look absent the proposed 

action.” EPA and the other members of the IWG determined that BAU socioeconomic scenarios 

best reflect this approach. While the IWG agrees that, all else equal, the baseline used for the 

SCC calculation should be updated periodically to reflect the latest projections of BAU 

scenarios, the RCP/SSP scenarios used in support of AR5 may not be easily adaptable for use in 

SCC modeling. 

To understand why, it is important to note some key differences between the criteria used by the 

IWG to select socioeconomic-emissions scenarios and what the RCP/SSP scenarios represent 

and how they were developed. Each scenario in the EMF-22 exercise used by the IWG was 

clearly identified as reflecting a reference case BAU or a specific CO2 stabilization scenario. 

Lacking data on the probabilities of specific scenarios, the IWG chose four BAU scenarios and 

one scenario representing stabilization at 550 ppm CO2-e and weighted them equally in its 

analysis. The IWG acknowledges that this is not a precise characterization of the baseline but 

believes it is a reasonable approach at present, in light of data limitations.

Some of the AR5 scenarios differ from these scenarios in ways that make them difficult to adapt 

to the SCC context. An ad-hoc group was formed in anticipation of AR5 to develop new 

scenarios to support climate impacts, adaptation, and vulnerability research. The initial work 

focused on the development of RCPs, which represent a wide range of potential radiative forcing 

pathways over the 21st century. The SSPs are a series of human development pathways that 

could lead to radiative forcing pathways described by the RCPs. The RCPs are not based on a 

fixed future path of key socioeconomic parameters, which means that multiple SSPs are 
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associated with an RCP. No assessment was made as to the likelihood of any particular RCP 

being realized, but some of the scenarios clearly would require large-scale global mitigation 

efforts to be achieved and U.S. involvement in these efforts may be necessary for their success. 

In other words, the developers did not assign likelihoods that the various scenarios would 

achieve the RCPs in the absence of policy interventions, which means that it is not clear which 

scenarios could reasonably serve as BAU projections. Therefore, using the RCP/SSP scenarios 

would require the IWG to conduct an assessment of which RCP/SSPs represent BAU scenarios, 

or of the probability that each scenario occurs in a BAU case. The IWG believes that data are 

currently lacking to conduct such an assessment. 

EPA will continue to follow and evaluate the latest science on socioeconomic-emissions 

scenarios and, along with the members of the IWG, will seek external expert advice on the 

technical merits and challenges of potential approaches to update these scenarios in future 

revisions to the SC-CO2 estimates.

Regarding the inclusion of a scenario associated with stabilization of atmospheric concentrations 

of GHGs at 550 ppm CO2-e, the 2010 TSD clearly notes that this is “not derived from an 

assessment of what policy is optimal from a benefit-cost standpoint. Rather, it is indicative of 

one possible future outcome.” As noted above, OMB guidance in Circular A-4 states that the 

correct baseline for regulatory impact analysis is an agency’s best assessment of the state of the 

world without the regulation, and specifically states that this may include the potential for new 

domestic and foreign policies that would occur absent the regulation. Including a scenario 

representative of future mitigation actions is consistent with this guidance, as long as those future 

policy actions are expected to occur with or without the regulation under examination. As 

explained in the 2010 TSD, the IWG aimed to select scenarios that span most of the plausible 

range of outcomes for the socioeconomic variables. Given the level of uncertainty in these

trajectories, the IWG felt that it was appropriate to consider a trajectory with significant global 

mitigation, assuming that this is a distinct possibility even in the absence of U.S. actions. 

Because there were five scenarios, and each received equal weighting, the stabilization scenario 

received 20% of the total probability weight. 

Regarding potential inconsistencies between scenarios and IAMs, given the nature of estimating 

the SC-CO2 and available data/resources, a full harmonization along all possible dimensions of 

the three IAMs used to estimate the SC-CO2 with the four models used to develop the scenarios 

was not possible. Therefore, the IWG chose to harmonize the models with respect to the scenario 

variables to which SCC estimates are most sensitive (GDP, population, and emissions) using 

common techniques in the literature. The scenarios used were developed by highly respected 

international modeling groups and published in the peer-reviewed literature. In terms of potential 

inconsistencies across scenario variables past 2100, an effort was made to account for some basic 

correlations among scenario variables in the post-2100 extrapolation. For example, 

extrapolations were based on GDP per capita growth, which implicitly correlates population and 

GDP growth, rather than GDP levels or growth alone. Similarly, extrapolations were based on 

CO2 emissions intensity with respect to GDP, which correlates emissions and GDP growth, 

rather than CO2 emissions levels or growth alone. 
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Consistent with historical observations, it is expected that growth rates of rapidly developing 

economies will exceed those of already developed economies in the near term. Scenarios with 

projections of global economic growth that exceed recent trends in developed economies are 

consistent with this expectation.

The chosen scenarios capture a wide range of potential future states of the world, but were not 

intended to represent a comprehensive accounting of the full range of uncertainty, and therefore 

it is possible that future outcomes will fall outside of this range. The IWG acknowledges that the 

projection of the scenarios beyond 2100 has greater uncertainty than shorter-term projections and 

will continue to monitor the literature, including the development of extended RCP/SSP 

scenarios, for ways to improve the estimated trajectories and improve internal consistency.

Other

In addition, EPA disagrees with Commenter 10502’s characterization of the SC-CO2 as a 

rulemaking. The commenter has misunderstood what the SC-CO2 is and how it is used. The 

SC-CO2 itself is not a rulemaking, it is an estimate of the net economic damages resulting from 

CO2 emissions, and therefore is used to estimate the benefit of reducing those emissions. The 

SC-CO2 calculation does not make any assumptions about a “solution to all potential problems 

that a warming planet might cause, i.e. CO2 emissions control.” The SC-CO2 is just one 

component of a larger analysis that includes consideration of many other potential impacts. See 

EPA’s response to comments 4.4-3 for explanation as to why EPA uses global estimates of the 

SC-CO2, response to comments 4.4-6 for details about the treatment of CO2 fertilization in the 

IAMs, response to comments 4.4-8 for details about the application of the SC-CO2 to the 

illustrative cost and benefit scenarios in the RIA. 

4.4.2 Climate Science Components of the Modeling Underlying SC-CO2

Comment 4.4-2: Commenter 9685 states the following climate sensitivity errors: the methane 

contribution to the radiative forcing is severely underestimated resulting in an over-estimate of 

the relative contribution by CO2. Dynamic analysis is required to estimate the radiative forcing 

for atmospheric concentrations of methane. Even worse, EDF claims that using the long term 

GWP100 (lower) for methane is incorrect, the true methane GWP requires a dynamic analysis 

since the emissions occur 24/7. This has the potential for quadrupling the impact of methane 

concentrations and reducing the relative importance of CO2 even more. This is another correction 

that the SCC has not addressed. The impact is substantial and will dramatically affect the model 

results in calculations for CO2 only. The possible adjustment required for the non-CO2 gases 

contribution to radiative forcing: 0.48(86/21) + 0.16 + 0.34 = 2.47(v 0.98) W/m2. The result is a 

major shift in the relative importance on CO2 and a major reduction in the "climate sensitivity" 

for increased CO2. Surely EPA advised the IWG of this major error. Commenter 9685-7210 

continues stating the methane contribution to the radiative forcing is severely underestimated 

resulting in an over-estimate of the relative contribution by CO2. The IPCC has revised upward 

its estimates for the global warming potential (GWP) of methane. The GWP compares the 

amount of heat methane adds to the climate system against the amount of heat that carbon 

dioxide adds. The GWP of CO2 is assumed to be constant, while the GWP of methane varies 

substantially over time. Over a 20-year time frame, methane has a global warming potential 

(GWP20) of 86, up from 72, in the IPCC AR5. Methane is 34 times more potent a greenhouse 
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gas than carbon dioxide on a 100-year time scale (GWP100). It was previously assumed to be 25 

times more potent (EPA uses an out-dated value of 21). The SCC models do not reflect this 

correction. The net effect of this adjustment is lowering the "climate sensitivity" of CO2 because 

the contribution of methane would correspondingly increase, reducing the relative importance of 

CO2. Dynamic analysis is required to estimate the radiative forcing for atmospheric 

concentrations of methane. Also, Commenter 9685-7212 states that the methane contribution to 

the radiative forcing is severely underestimated resulting in an over-estimate of the relative 

contribution by CO2. Also, the AR5 indicates another correction is required: Emissions of CH4

alone have caused an RF of 0.97 [0.74 to 1.20] W m-2. This is very likely much larger than the 

concentration-based estimate of 0.48 [0.38 to 0.58] Wm-2 (unchanged from AR4). This 

difference in estimates is caused by concentration changes in ozone and stratospheric water 

vapor due to CH4 emissions and other emissions indirectly affecting CH4 (see Figure SPM.4). 

These corrections of the methane GWP are another major flaw in the IAMs.

Commenter 10091 states the IWG2010 notes (p.14) that the calibrated Roe and Baker 

distribution better reflects the IPCC judgment that "values substantially higher than 4.5degrees C 

still cannot be excluded." The IWG2010 further notes that "Although the IPCC made no 

quantitative judgment, the 95th percentile of the calibrated Roe & Baker distribution (7.1 dC) is 

much closer to the mean and the median (7.2 dC) of the 95th percentiles of 21 previous studies 

summarized by Newbold and Daigneault (2009). It is also closer to the mean (7.5 dC) and 

median (7.9 dC) of the nine truncated distributions examined by the IPCC (Hegerl, et al., 2006) 

than are the 95th percentiles of the three other calibrated distributions (5.2-6.0 dC)." In other 

words, the IWG2010 turned towards surveys of the scientific literature to determine its 

assessment of an appropriate value for the 95th percentile of the ECS distribution. Now, more 

than three years hence, the scientific literature tells a completely different story. Instead of a

95th percentile value of 7.14 degreesC, as used by the IWG2010, a survey of the recent scientific 

literature suggests a value of 3.5 degreesC-more than 50% lower. And this is very significant and 

important difference because the high end of the ECS distribution has a large impact on the SCC 

determination -a fact frequently commented on by the IWG2010. For example, from IWG2010 

(p.26): "As previously discussed, low probability, high impact events are incorporated into the 

SCC values through explicit consideration of their effects in two of the three models as well as 

the use of a probability density function for equilibrium climate sensitivity. Treating climate 

sensitivity probabilistically results in more high temperature outcomes, which in turn lead to 

higher projections of damages. Although FUND does not include catastrophic damages (in 

contrast to the other two models), its probabilistic treatment of the equilibrium climate sensitivity

parameter will directly affect the non-catastrophic damages that are a function of the rate of 

temperature change." And further (p.30): Uncertainty in extrapolation of damages to high 

temperatures: The damage functions in these IAMs are typically calibrated by estimating 

damages at moderate temperature increases (e.g., DICE was calibrated at 2.5 degreesC) and 

extrapolated to far higher temperatures by assuming that damages increase as some power of the 

temperature change. Hence, estimated damages are far more uncertain under more extreme 

climate change scenarios. And the entirety of Section V [sic] "A Further Discussion of 

Catastrophic Impacts and Damage Functions" of the IWG 2010 report describes "tipping points" 

and "damage functions" that are probabilities assigned to different values of global temperature 

change. Table 6 from the IWG2010 indicated the probabilities of various tipping points. The 

likelihood of occurrence of these low probability, high impact, events ("tipping points") is 

greatly diminished under the new ECS findings. The average 95th percentile value of the new 
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literature survey is only 3.5degrees C indicating a very low probability of a warming reaching 3-

5 degrees C by 2100 as indicated in the 3rd column of the above Table and thus a significantly 

lower probability that such tipping points will be reached. This new information will have a large 

impact on the final SCC determination using the IWG's methodology. The size of this impact has 

been directly investigated. 

Commenter 10091 continues in their Comment on the Landmark Legal Foundation Petition for 

Reconsideration of Final Rule Standards for Standby Mode and Off Mode Microwave Ovens, 

Dayaratna and Kreutzer (2013) ran the DICE model using the distribution of the ECS as 

described by Otto et al. (2013) a paper published in the recent scientific literature which includes 

17 authors, 15 of which were lead authors of chapters in the recent Intergovernmental Panel on 

Climate Change's Fifth Assessment Report. The most likely value of the ECS reported by Otto et 

al. (2013) was described as "2.0degreesC, with a 5-95% confidence interval of 1.2-3.9degreesC." 

Using the Otto et al. (2013) ECS distribution in lieu of the distribution employed by the IWG 

(2013), dropped the SCC by 42 percent, 41 percent, and 35 percent (for the 2.5%, 3.0%, 5.0% 

discount rates, respectively). This is a significant decline. In subsequent research, Dayaratna and 

Kreutzer (2014) examined the performance of the FUND model, and found that it too, produced 

a greatly diminished value for the SCC when run with the Otto et al. distribution of the 

equilibrium climate sensitivity. Using the Otto et al. (2013) ECS distribution in lieu of the 

distribution employed by the IWG (2013), dropped the SCC produced by the FUND model to 

$11, $6, $0 compared with the original $30, $17, $2 (for the 2.5%, 3.0%, 5.0% discount rates, 

respectively). Again, this is a significant decline. The Dayaratna and Kreutzer (2014) results 

using FUND were in line with alternative estimates of the impact of a lower climate sensitivity

on the FUND model SCC determination. Waldhoff et al. (2011) investigated the sensitivity of 

the FUND model to changes in the ECS. Waldhoff et al. (2011) found that changing the ECS 

distribution such that the mean of the distribution was lowered from 3.0 degrees C to 2.0degrees 

C had the effect of lowering the SCC by 60 percent (from a 2010 SCC estimate of $8/ton of CO2

to $3/ton in $1995). While Waldhoff et al. (2011) examined FUNDv3.5, the response of the 

current version (v3.8) of the FUND model should be similar. Additionally, the developer of the 

PAGES model affirmed that the SCC from the PAGES model, too drops by 35% when the Otto 

et al. (2013) climate sensitivity distribution is employed (Hope, 2013). 

Further, Commenter 10091 states these studies make clear that the strong dependence of the 

social cost of carbon on the distribution of the estimates of the equilibrium climate sensitivity

(including the median, and the upper and lower certainty bounds) requires that the periodic 

updates to the IWG SCC determination must include an examination of the scientific literature 

on the topic of the equilibrium climate sensitivity. There is no indication that the IWG undertook 

such an examination. But what is clear, is that the IWG did not alter its probability distribution of 

the ECS between its 2010 and 2013 SCC determination, despite a large and growing body of 

scientific literature that substantially alters and better defines the scientific understanding of the 

earth's ECS. It is unacceptable that a supposed "updated" social cost of carbon does not include 

updates to the science underlying a critical and key aspect of the SCC. Commenter note that 

there has been one prominent scientific study in the recent literature which has argued, on the 

basis of recent observations of lower tropospheric mixing in the tropics, for a rather high climate 

sensitivity (Sherwood et al., 2014). This research, however, suffers from too narrow a focus. 

While noting that climate models which best match the apparent observed behavior of the 

vertical mixing characteristics of the tropical troposphere tend to be the models with high climate 
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sensitivity estimates, the authors fail to make note that these same models are the ones whose 

projections make the worst match to observations of the evolution of global temperature during 

the past several decades. The figure below shows the observed global surface temperature history

from 1951-2013 compared with the temperature evolution projected by the collection of models 

used in the new IPCC 2013 report. We broke the climate models down into two groups-those 

which have a climate sensitivity greater than 3.0 degreesC (as suggested by Sherwood et al., 

2014) and those with a climate sensitivity less than 3.0 degreesC. The Figure shows that while 

neither model subset does a very good job is capturing evolution of global temperature during 

the past 15-20 years (the period with the highest human carbon dioxide emissions), the high 

sensitivity models do substantially worse than the lower sensitivity models. 

Commenter 10091 adds while Sherwood et al. (2014) prefer models that better match their 

observations in one variable, the same models actually do worse in the big picture than do 

models which lack the apparent accuracy in the processes that Sherwood et al. (2014) describe. 

The result can only mean that there must still be even bigger problems with other model 

processes which must more than counteract the effects of the processes described by Sherwood 

et al. After all, the overall model collective is still warming the world much faster than it actually 

is (see Figure below). In fact, for the observed global average temperature evolution for the past 

30 years largely lies below the range which encompasses 95% of all climate model runs an 

indication that the observed trend is statistically different from the trend simulated by climate 

models. And for periods approaching 40 years in length, the observed trend lies outside of 

(below) the range that includes 90% of all climate model simulations and indication that the 

observed trend is marginally inconsistent with climate model simulations. These results argue 

strongly against the reliability of the Sherwood et al. (2014) conclusion and instead provide 

robust observational evidence that the climate sensitivity has been overestimated by both climate 

models, and the IWG alike.

Commenter 10091 states regarding equilibrium climate sensitivity that in May 2013, the 

Interagency Working Group (IWG) produced an updated SCC value by applying updates to the 

underlying three Integrated Assessment Models (IAMs) used in its initial 2010 SCC 

determination, but did not update the equilibrium climate sensitivity (ECS) employed in the 

IAMs. This was not done, despite there having been, since January 1, 2011, at least 11 new 

studies and 17 experiments (involving more than 44 researchers) examining the ECS, each 

lowering the best estimate and tightening the error distribution about that estimate. Instead, the 

IWG wrote in its 2013 report: "It does not revisit other interagency modeling decisions (e.g., 

with regard to the discount rate, reference case socioeconomic and emission scenarios, or 

equilibrium climate sensitivity)." The earth's equilibrium climate sensitivity is defined in the 

Interagency Working Group on Social Cost of Carbon 2010 (hereafter, IWG2010) report as "the 

long-term increase in the annual global-average surface temperature from a doubling of 

atmospheric CO2 concentration relative to pre-industrial levels (or stabilization at a concentration 

of approximately 550 parts per million (ppm))" and is recognized as "a key input parameter" for 

the integrated assessment models used to determine the social cost of carbon. 

Commenter 10091 continues that the IWG2010 report has an entire section (Section III.D) 

dedicated to describing how an estimate of the equilibrium climate sensitivity and the scientific 

uncertainties surrounding its actual value are developed and incorporated in the IWG's analysis. 

The IWG2010, in fact, developed its own probability density function (pdf) for the ECS and used 
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it in each of the three IAMs, superseding the ECS pdfs used by the original IAMs developers. 

The IWG's intent was to develop an ECS pdf which most closely matched the description of the 

ECS as given in the Fourth Assessment Report of the United Nation's Intergovernmental panel 

on Climate Change which was published in 2007. The functional form adopted by the IWG2010 

was a calibrated version of Roe and Baker (2007) distribution. It was described in the IWG2010 

report in the following Table and Figure (from the IWG2010 report): The calibrated Roe and 

Baker functional form used by the IWG2010 is no longer scientifically defensible; neither was it 

at the time of the publication of the IWG 2013 SCC update. The figure below vividly illustrates 

this fact, as it compares the best estimate and 90% confidence range of the earth's ECS as used 

by the IWG2010/2013 (calibrated Roe and Baker) against findings in the scientific literature 

published since January 1, 2011. Whereas the IWG2010/2013 ECS distribution has a median 

value of 3.0 dC and 5th and 95th percentile values of 1.72 dC and 7.14 dC, respectively, the 

corresponding values averaged from the recent scientific literature are 2.0 dC (median), 1.1 dC 

(5th percentile), and 3.5 dC (95th percentile). These differences will have large and significant

impacts on the SCC determination. 

Commenter adds (10091) the IWG2010 report noted that, concerning the low end of the ECS 

distribution, its determination reflected a greater degree of certainty that a low ECS value could 

be excluded than did the IPCC. From the IWG2010 (p. 14): "Finally, we note the IPCC judgment 

that the equilibrium climate sensitivity "is very likely larger than 1.5dC." Although the calibrated 

Roe & Baker distribution, for which the probability of equilibrium climate sensitivity being 

greater than 1.5 degrees C is almost 99 percent, is not inconsistent with the IPCC definition of 

"very likely" as "greater than 90 percent probability," it reflects a greater degree of certainty

about very low values of ECS than was expressed by the IPCC." In other words, the IWG used 

its judgment that the lower bound of the ECS distribution was higher than the IPCC 2007 

assessment indicated. However, the collection of the recent literature on the ECS shows the 

IWG's judgment to be in error. As can be seen in the chart above, the large majority of the 

findings on ECS in the recent literature indicate that the lower bound (i.e., 5th percentile) of the 

ECS distribution is lower than the IPCC 2007 assessment. And, the average value of the 5th 

percentile in the recent literature (1.1dC) is 0.62dC less than that used by the IWG-a sizeable and 

important difference which will influence the SCC determination. In fact, the abundance of 

literature supporting a lower climate sensitivity was at least partially reflected in the new IPCC 

Fifth Assessment Report issued in 2013. In that report, the IPCC reported: Equilibrium climate 

sensitivity is likely in the range 1.5dC to 4.5dC (high confidence), extremely unlikely less than 

1dC (high confidence), and very unlikely greater than 6dC (medium confidence). The lower 

temperature limit of the assessed likely range is thus less than the 2dC in the AR4.... Clearly, the 

IWG's assessment of the low end of the probability density function that best describes the 

current level of scientific understanding of the climate sensitivity is incorrect and indefensible. 

But even more influential in the SCC determination is the upper bound (i.e., 95th percentile) of 

the ECS probability distribution.

Commenter 10502 included a report (BOUNDING GHG CLIMATE SENSITIVITY FOR USE 

IN REGULATORY DECISIONS) published in February 2014 to argue that the computing 

Social Cost of Carbon (SCC) is scientifically flawed. In the Purpose section of the report they

also state that: "We believe that a metric, the Equilibrium Climate Sensitivity (ECS), is being 

misused by the Interagency Working Group (IWG) that developed the SCC calculation process. 

The IWG included participants from a number of US Government agencies in their attempt to 
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justify the economics of CO2 and other "Green House Gas" (GHG) emissions control 

regulations". They explain that: "This report provides rigorous scientific documentation of how 

the ECS metric is being misused in a number of ways as described in the TSDs and proposes a 

more scientifically based metric to replace ECS use in regulatory activity." In the 86 pages report 

they provided the following tables and figures: Table 1.1 (page 15) describing all the metrics 

used and derived in the report. Table 1.2 (page 29) presents the Climate Model TCR/ECR Ratio. 

Table 5.0 (page 72) shows Statistical Distributions for ECS. Figure 1.1 (page 18) which is the 

Dr. John Christy Study - Climate Model Comparison to Actual Physical Data of the midTroposphere Temperature Anomalies. Figure 1.2 (page 30) show the IPCC AR4 Climate Model 

TCR/ECS Trends vs. ECS. Figure 1.3 (page 30) showing the IPCC AR4 Climate Model 

ECS/TCR Trends VS. TCR. Figure 2.1 (page 34) showing the Simple Spring-Mass-Damper 

Dynamic System. Figure 3.1 (page 38) presents Atmospheric CO2 Concentration 1832-2013 and 

Projections to 2100. Figure 4.1 (page 46) shows Comparison of Several Popular Global Average 

Temperature Databases. Figure 4.2 (page 49) presents Ljungqvist Temperature Reconstruction 

for the Northern Hemisphere. Figure 4.3 (page 51) shows HadCRUT4 Global Yearly Average 

Temperature Anomaly. Figure 4.4 (page 53) presents Case 1 HadCRUT4 Data Curve Fit, 

TCSTRF = 1.5 deg. C. Figure 4.5 (page 56) presents HadCRUT4 Data Fit with TCSTRF = 0.8 

deg. C and 1000 Year Climate Cycle. Figure 4.6 (page 58) shows determining an Upper Bound 

for Transient Climate Sensitivity, TCSTRF. Figure 4.7 (page 60) presents Historical 

Reconstruction of TSI by Kopp - (1610 - 2010). Figure 4.8 (page 61) presents Total Solar 

Irradiance (TSI) Variation: 1650 - Present and Beyond. Figure 4.9 (page 65) presents Recent 

Published Trends in ECS Uncertainty Range. Figure 4.10 (page 68) shows Bounding Maximum 

Possible AGW Temperature Rise. Figure 5.1 (page 74) shows the Comparison of ECS 

Probability Density Functions. 

Commenter 10502 states the SCC attempts to weigh possible future damage to the world-wide 

society from US CO2 emissions, against the immediate and certain increases to US energy and 

related economic cost created by issuance of each new regulation. Such unilateral US CO2

emissions regulations imposed on US citizens, without an enforceable world-wide agreement to 

limit CO2 emissions, will have insignificant effect on global warming, and will almost certainly 

cause a migration of US energy intensive manufacturing jobs to other countries that do not 

impose CO2 emission regulations on themselves. Total curtailment of US-only CO2 emissions 

could not prevent the joint statistical probability of high climate sensitivity to CO2 and high 

atmospheric CO2 levels that lead to high computed values of SCC. Such conditions using the 

IWG's scientifically unsupported ECS distribution of Figure 6 <page 11> are related to a 

significant computed probability of high temperatures and high CO2 levels that could melt 

permanent ice sheets on Greenland and West Antarctica and cause rapid sea level rise. There is 

not much scientific agreement on the probability that significant portions of these permanent ice 

sheets will be melted by rising GHG levels. Therefore, the assumptions in the SCC process that 

lead to high values of SCC must be carefully scrutinized. These are key issues that need to be 

reviewed in detail by an independent scientific review team to ensure that no unnecessary harm 

to the US population results from unilateral US CO2 emission regulations. Commenter states 

10502 that the ECS method used to determine the Social Cost of Carbon (SCC) is flawed and 

compared it with other metrics that in their opinion are more appropriate. In the current SCC 

calculation process, temperature rise estimates from present until the year 2300, a key driver of 

SCC damage estimates, are highly corrupted by the inappropriate use of the ECS metric for 
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computing temperature changes due to atmospheric CO2 changes over the next 300 years. The 

"best available science" that the IWG is required to employ in computing SCC should be based 

on a less uncertain transient climate sensitivity metric, such as the IPCC's Transient Climate 

Response (TCR) metric or our research team's Transient Climate Sensitivity (TCS) metric, 

defined and very accurately determined and bounded from actual climate data as documented in 

Ref. 1 (Attached document ending with Docket ID ending with 10502-A1). Commenter says that 

these transient climate sensitivity metrics are much more scientifically appropriate than ECS for 

computing temperature changes over the next 300 years and do not include highly disputed and 

uncertain effects that have been postulated to occur much more than 300 years from now, and 

that have led to so much uncertainty in establishing a confident value for ECS. Both the IPCC 

AR4 report and AR5 report that compute global average temperature rise from slowly increasing 

levels of GHG, inherently use the transient climate sensitivity aspects of climate simulation 

models, as opposed to the much larger effects that develop over 1000's of years in the totally 

inappropriate ECS simulations. However, as we have demonstrated in Ref.1 (Docket ID ending 

with 10502-A1) , it is not necessary to use complex and un-validated climate simulation models 

to accurately estimate and bound global average surface temperature rise due to CO2 emissions 

over the next 300 years. There is ample climate data to accurately determine the TCS metric and 

to use it in an algebraic equation that captures the direct and climate feedback warming effects of 

GHG forcing of the climate as a function of various proposed Representative Concentration 

Pathways (RCP). The IWG's SCC is computed for climate changes they expect only from the 

present until the year 2300. At present, global atmospheric CO2 levels are only about 397 ppm 

and increasing at a rate of about 0.5 percent per year. But, ECS is defined by the IPCC to be the 

climate response that would occur after the atmospheric CO2 level is suddenly doubled from preindustrial levels of about 280 ppm to about 560 ppm and held at that level until the climate 

stabilizes at a new equilibrium condition. Because of long feedback responses of the oceans to 

give up even more CO2 as they gradually warm, and cause amplified GHG warming, the final 

equilibrium state imbedded in the ECS value is not reached until 1000 or more years later after 

the sudden doubling of CO2 levels. It is not clear how, or if, the IWG recognizes this fact in how 

it predicts global temperature rise and related damages for each ton of CO2 emitted between now 

and 2300. Moreover, at the present time, with an actual slowly increasing atmospheric CO2 level, 

not at all like the sudden doubling of atmospheric CO2 required to compute the ECS value in 

climate models, our oceans are cool enough to absorb about half of the CO2 emitted each year, 

leaving only about half of the yearly emissions available to increase atmospheric CO2 levels. 

Since ECS, TCR and TCS are metrics that attempt to describe temperature sensitivity to 

atmospheric CO2 levels, not CO2 emissions, the TSDs have not clearly described how the ECS 

value selected from the assumed statistical distribution for ECS can be used to accurately 

compute global temperature rise due to the slowly rising CO2 levels over the next few hundred 

years. This critical aspect of the SCC calculation process is not based on the best science 

available to the IWG and its member organizations, and indicates the need for an in-depth and 

independent scientific review of the entire SCC process. The commenter included a number of 

Figures, some of which are also included in the attached report document (Docket ID ending 

with 10502-A1). The list of Figures in this document is as follows: Figure 1 (page 6): Dr. John 

Christy Study - IPCC AR5 Report Climate Model Comparison to Actual Physical Data of the 

mid- Troposphere Temperature Anomalies. Figure 2 (page 8): Merged Law Dome and Mauna 

Loa Datasets for Atmospheric CO2 Concentration. Figure 3 (page 9): Extracting Transient 

Climate Sensitivity (TCS) from the HadCRUT4 Data. Figure 4 (page 10): Extracting an Upper 
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Bound for TCS from the HadCRUT4 Data. Figure 5 (page 10): Max Possible GHG Warming 

Forecast, Present - 2300. Figure 6 (page 11): Comparison of TRCS and IWG probability

distributions for ECS.

Commenter 9681 counters, stating IWG's treatment of climate sensitivity is appropriate and 

could go further in highlighting the costs of fundamental uncertainties. In addition to choosing an 

appropriate discount rate and sensitivity analyses around different SSPs, another important 

parameter to which the SCC estimates are sensitive is Equilibrium Climate Sensitivity (ECS) 

how the climate system responds to a constant radiative forcing, which is typically expressed as 

the temperature response to a doubling of CO2 concentration in the atmosphere. In its current 

iteration, the IWG conducted extensive sensitivity analyses over a range of equilibrium climate 

sensitivity estimates. (Specifying the climate sensitivity parameter as a random variable has a 

basis in PAGE02, which species a probability distribution function for the parameter. The IWG 

calibrated the Roe and Baker distribution, a right-skewed distribution, to characterize the 

probability distribution function of this parameter. The 2010 TSD explains the IWG's choice of 

the Roe and Baker distribution. The right-skewed nature of the climate sensitivity parameter's 

probability distribution function is independent of the IWG's choice of the Roe and Baker 

distribution. Rather, this skewness results from the IPCC's finding that values of the climate 

sensitivity parameter above 4.5 degree Celsius cannot be excluded. As a result, all of the 

probability distribution functions fit by the IWG for the climate sensitivity parameter were 

skewed to the right (see Figure 2 in the 2010 TSD), including Roe and Baker. See 2010 TSD, 

supra note 5, at 14, fig. 2.) The assumptions are clearly stated in the TSD. In addition to its 

sensitivity analysis, the IWG conducted a Monte Carlo simulation over the climate sensitivity

parameter and the other random variables specified within the three IAMs.97 (A Monte Carlo 

simulation will run an integrated assessment model thousands of times, each time randomly

picking the value of uncertain parameters from a probability distribution function, i.e. a function 

that assigns a probability to each possible parameter value. In the case of the SCC, the IWG ran 

10,000 Monte Carlo simulations for each of the three IAMs and five socio-economic scenarios, 

randomizing the value of climate sensitivity, i.e., the change in average global temperature 

associated with a doubling of CO2, and all other uncertain parameters in the IAMs by the original 

authors. For each randomly drawn set of values, the IAM estimated the associated damages, with 

the final SCC estimate equaling the average value across all 10,000 runs, five socio-economic 

scenarios, and then across all three models. Therefore, each SCC estimate is calculated using 

150,000 runs.) The range for the Equilibrium Climate Sensitivity (ECS) is derived from a 

combination of methods that constrain the values from measurements in addition to models. 

These include measured ranges from paleoclimate records, observed comparisons with current 

climate, as well as responses to recent climate forcings. The currently agreed likely range for the 

ECS (from both the IPCC TAR and AR5) is 1.5-4.5 degrees Celsius, with a best estimate of 3 

degrees Celsius. Physical constraints make it extremely unlikely that the ECS is less than 1 

degree Celsius and very unlikely greater than 6 degrees Celsius.98 (IPCC, supra note 95, at 14.) 

A host of analyses points to the costs of such uncertainty both for values that go outside the 

likely range and for uncertainty within it: in short, the optimal SCC tends to increase with 

increased uncertainty, sometimes dramatically so. While the current treatment of uncertainty 

around climate sensitivity by the IWG is sufficient to highlight the range of possible 

uncertainties, a reconsideration of the assumptions feeding into the SCC ought to take the latest 

advances highlighting the potentially higher costs of deep uncertainty into account.
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Commenter 9685 continues that Senate testimony comparing model predictions with actual 

observations. The data presented in testimony confirms that all of the models used by the IPCC, 

including the 19 U.S. models, are fatally flawed and cannot be used in any policy analysis, 

including the ECS input to the IAMs used in the SCC.

Commenter 9685 also states estimates of climate sensitivity should be based on data, not flawed 

models. Although most of the IPCC AR5 models incorporate a mean sensitivity of 3.4 degreesC 

(range of 2.1 to 4.7 degreesC), recent studies either ignored by the IPCC or papers available after 

the cut-off date for the AR5 indicate the true sensitivity is much lower as suggested by Dr. 

Spencer. Rather than using the demonstrably flawed IPCC models, these studies use a 

combination of simple climate models bounded by data or use only data. These papers indicate 

the ECS is substantially lower than what was used as input to the IAMs and that the "fat tail" is 

constrained by real data. The consequence: the SCC is as much as 90% lower based on the ECS 

correction alone. Commenter believes that EPA must withdraw SCC2010 and SCC2013 and 

proceed with a wholesale revision of the ECS input to the IAMs using the recent papers that 

document a substantially lower value than used in the SCC reports.

Commenter 9685 states Damage function errors: sea level rise is based on the flawed IPCC 

models. The Sea Level Rise (SLR) treatment in the IAMs is highly suspect. Nordhaus 

announced "changes" in DICE, but provided no data to show the projection of SLR versus time 

or temperature. This is a major problem for the IAMs: there is no data to compare results. 

Dependence on the flawed AR4 and AR5 models for SLR projections is another major problem 

for the IAMs. The public is unable to examine the details because the Damage Function 

aggregates the results. Each element has to be unbundled, this is especially important for SLR. 

EPA must require that each IAM provide the details of each element of the Damage Function. 

Commenter 9685-7221 continues, stating the model does not properly reflect benefits of fossil 

fuel use and CO2 fertilization. The damage functions for the three IAMs are presented in 

SCC2010 Figures 1A and 1B, using the modeler's default scenarios and mean input assumptions. 

There are significant differences between the three models both at lower (figure 1B) and higher 

(figure 1A) increases in global-average temperature. But the results displayed in Figures 1A and 

1B show that the FUND model has negative damages ("benefits") through roughly 2080. Since 

the detailed elements of the "damage" function are not transparent, one can only surmise that the 

"benefits" are dominated by the CO2 fertilization effects. It is apparent that the other two models 

either do not reflect this effect or minimize the effect and are thus seriously deficient. This is a 

substantial flaw in SCC2010, SCC2013, and SCC2013r . Rising amounts of CO2 in the 

atmosphere have the effect of increasing U.S. and global crop yields. Other benefits of CO2

include reducing the amount of fresh water needed to produce any given amount of crop and 

improving the response to environmental stress (NIPCC2009) The amounts of increased yields 

by crop have been calculated for certain elevated levels of CO2 in the atmosphere. The benefits 

manifest themselves in the form of greater availability of food and lower prices which in turn 

contribute to improved health and quality of life. These benefits largely flow to those who 

otherwise struggle to afford an adequate supply of food, in other words, the poor. This effect is 

the dominant "negative damage" from the effects of CO2 emissions. The IAMs do not properly 

account for this effect.

Commenter 10091 continues the determination of the SCC used by the EPA in its cost 

comparison analysis is discordant with the best scientific literature on the equilibrium climate 
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sensitivity and the fertilization effect of carbon dioxide two critically important parameters for 

establishing the net externality of carbon dioxide emissions at odds with existing Office of 

Management and Budget (OMB) guidelines for preparing regulatory analyses, and founded upon 

the output of Integrated Assessment Models (IAMs) which encapsulate such large uncertainties 

as to provide no reliable guidance as to the sign, much less the magnitude of the social cost of 

carbon.

Commenter 10091: Additionally, as run by the Interagency Working Group (IWG) (whose 

results were incorporated by the EPA in this action), the IAMs produce illogical results that 

indicate a misleading disconnect between a climate change and the SCC value. And we show 

that the sea level rise projections (and thus SCC) of at least one of the IAMs (DICE 2010) cannot 

be supported by the mainstream climate science. Commenter states that until this situation in its 

entirety can be properly rectified, the SCC should be barred from use in this and any other

federal rulemaking. It is better not to include any value for the SCC in cost/benefit analyses such 

as these, than to include a value which is knowingly improper, inaccurate and misleading.

Response 4.4-2: All of the comments on the climate science components of the modeling 

underlying the SC-CO2 estimates mirror those submitted to the Office of Management and 

Budget’s separate comment solicitation on the SCC (78 FR 70586; November 26, 2013). As a 

member of the interagency working group (IWG) on SC-CO2, EPA has carefully examined and 

evaluated comments submitted to OMB’s separate solicitation. EPA has also carefully examined 

and evaluated all comments received regarding SC-CO2 through this rulemaking process and 

determined that the IWG responses to the comments on the OMB solicitation address the 

comments on the climate science components of the modeling underlying the SC-CO2. 

Specifically, EPA concurs with the IWG’s response to these comments and hereby incorporates 

them by reference.23 

EPA appreciates the commenters’ recommendations for potential opportunities to improve the 

SC-CO2 estimates and has considered each one in the context of this rulemaking. EPA and other 

members of the IWG have reconfirmed their commitment to periodic review and update of the 

methodology and estimates to ensure that they continue to reflect the best available science and 

economics. Furthermore, EPA has determined that the SC-CO2 methodological 

recommendations require additional research, review, and public comment before it can apply 

them to a rulemaking context. 

To help synthesize the technical information and input reflected in the comments, and to add 

additional rigor to the next update of the SC-CO2, the EPA and all of the other IWG members 

plan to seek independent expert advice on technical opportunities to improve the SC-CO2

estimates, including the approaches suggested by commenters and summarized in this document. 

Specifically, EPA and all of the other IWG members plan to ask the National Academies of 

Sciences, Engineering, and Medicine (Academies) to examine the technical merits and 

challenges of potential approaches to improving the SC-CO2 estimates in future updates. Input 

from the Academies, informed by the comments submitted to this rulemaking and the peer-

 

23 Referred to as the "OMB Response to Comments on SC-CO2." See pgs 11 to 17 at 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-final-july-2015.pdf.
4-57

reviewed literature, will help to ensure that the SC-CO2 estimates used by EPA continue to 

reflect the best available science and methodologies.

After careful evaluation of the full range of comments and associated technical issues described 

in section 4.4, EPA has determined that it will continue to use the current SC-CO2 estimates 24

until further updates can be made to reflect forthcoming guidance from the Academies. EPA 

believes that the current estimates continue to represent the best scientific information on the 

impacts of climate change available in a form appropriate for incorporating the damages from 

incremental CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the 

current SC-CO2 estimates in the analysis of illustrative benefit-cost scenarios for new sources in 

RIA Chapter 5.25

EPA will continue to consider these comments and will share the recommendations with the 

IWG as it moves forward with the Academies process.

The remainder of this section provides more detailed responses to the comments and 

recommendations. 

Regarding comments on equilibrium climate sensitivity (ECS), the EPA is aware that this is an 

active area of research and remains committed to updating the SC-CO2 estimates to incorporate 

new scientific information and accurately reflect the current state of scientific uncertainty

regarding the ECS. While we agree with commenters that the ECS distribution, along with other 

climate modeling inputs to the SCC calculation, should be updated periodically to reflect the 

latest scientific consensus, care must be exercised in selecting an appropriate range of estimates 

for this important parameter. Many studies estimating climate sensitivity have been published, 

based on a variety of approaches (instrumental record, paleoclimate observations, models, etc.). 

These individual studies report differing values and provide different information. Picking a 

single study from the high or low end of the range, or even in the middle, will exclude relevant 

information. A valid representation of uncertainty regarding climate sensitivity should be 

obtained from a synthesis exercise such as that done by the IPCC that considers the full range of 

relevant studies.

At the time the 2013 SC-CO2 update was released, the most authoritative statement about ECS 

appeared in the IPCC’s AR4. Since that time, as several commenters noted, the IPCC issued a 

Fifth Assessment Report that updated its discussion of the likely range of climate sensitivity

compared to AR4. The new assessment reduced the low end of the assessed likely range (high 

confidence) from 2°C to 1.5°C, but retained the high end of the range at 4.5°C. Unlike in AR4, 

the new assessment refrained from indicating a central estimate of ECS. This assessment is based 

on a comprehensive review of the scientific literature and reflects improved understanding, the 

extended temperature record for the atmosphere and oceans, and new estimates of radiative 

forcing.

 

24 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.

25 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.
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Several of the post-AR4 studies highlighted by some commenters were cited in the AR5 

assessment. In particular, both Aldrin et al. (2012) and Otto et al. (2013) were cited in both 

Chapter 10 and Chapter 12 of the AR5 Working Group I assessment. Eight of the authors of Otto 

et al. (2013), including the lead author, were authors of Chapter 12 for AR5’s Working Group I 

and one was a lead author for the chapter. Hence it is clear that the IPCC considered Otto et al. 

(2013) in its synthesis of literature on the ECS. More broadly, the AR5 climate sensitivity

distribution likely incorporates much of the literature identified by the commenters. EPA will 

continue to follow and evaluate the latest science on the equilibrium climate sensitivity. 

Furthermore, EPA and the other members of the IWG are seeking external expert advice on the 

technical merits and challenges of potential approaches prior to updating the ECS distribution in 

future revisions to the SCC estimates, including (but not limited to) using the AR5 climate 

sensitivity distribution for the next update of the SC-CO2. 

As discussed in preamble section II, RTC section 4.1, the 2009 Endangerment Finding, and in 

the OMB RTC, among other resources, the links between CO2 and temperature are established 

beyond question by laboratory measurements, physical theory, paleoclimate observations, 

instrumental observations, and observations of other planets. Climate change and its impacts, 

such as sea level rise, have been exhaustively documented, and synthesized internationally by the 

IPCC and domestically by the U.S. National Climate Assessment. Based on the wide acceptance 

of these conclusions in the scientific community, EPA believes that: (1) anthropogenic emissions 

of greenhouse gases are causing atmospheric levels of greenhouse gases in our atmosphere to 

rise to levels unprecedented in human history; (2) the accumulation of greenhouse gases in our 

atmosphere is exerting a warming effect on the global climate; (3) there are multiple lines of 

evidence, including increasing average global surface temperatures, rising ocean temperatures 

and sea levels, and shrinking ice in glaciers, ice sheets, and the Arctic, all showing that climate 

change is occurring, and that the rate of climate change in the past few decades has been unusual 

in the context of the past 1000 years; (4) there is compelling evidence that anthropogenic 

emissions of greenhouse gases are the primary driver of recent observed increases in average 

global temperature; (5) atmospheric levels of most greenhouse gases are expected to continue to 

rise for the foreseeable future; and (6) risks and impacts to public health and welfare are 

expected to grow as climate change continues, and that climate change over this century is 

expected to be greater compared to observed climate change over the past century. 

While there are inherent uncertainties associated with modeling climate systems over long time 

spans, the general circulation models (GCMs) upon which estimates of ECS and other climate 

science research are based have been extensively evaluated. For example, since 1989 the DOE 

has had a large program (The Program for Climate Model Diagnosis and Intercomparison) 

dedicated to evaluating these models.

The ECS parameter is a useful parameter for summarizing the strength of the climate system’s 

response to accumulating GHG concentrations in the atmosphere. However, it is influenced by

many highly complex and uncertain natural processes, some of which adjust over very long 

periods of time. Therefore, persistent uncertainty about the ECS is not surprising. Furthermore, 

persistent uncertainty does not suggest an absence of useful information. However, EPA does not 

agree that progress has not been made in reducing this uncertainty. Over the last 30 years the 

scientific community has elucidated many aspects of the climate system’s response to GHGs 

accumulating in the atmosphere. While the AR5 “likely” range is slightly larger than that of 
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AR4, the assessment presented greater confidence in the tails. AR5 found that climate sensitivity

is very unlikely to be greater than 6°C, whereas AR4 stated that the “lack of strong constraints 

limiting high climate sensitivities prevents the specification of a 95th percentile bound.” 

Similarly, while the AR5 and the IPCC’s (2001) Third Assessment Report (TAR) bounds look 

similar, the TAR bounds were presented as a range without estimated probabilities.

In response to the commenter citing Pindyck on climate feedbacks and the shape of the ECS 

distribution, we agree that potential climate feedbacks and their strength are uncertain. However, 

the IWG chose a distribution from the peer-reviewed literature based on its evaluation of the 

scientific literature and the relationship between this distribution and IPCC range of the ECS. 

Regarding the skewness of the calibrated ECS distribution, this characteristic is common among 

the many approaches that have been used to study the ECS distribution and is not unique to the 

theoretical approach used by Roe and Baker to define the functional form of their distribution. 

Consistent with the AR4 discussion on limiting the distribution to a range considered possible by 

experts, such as from 0°C to 10°C, the IWG truncated the distribution at 10oC (Hegerl 2007, p 

719).

EPA disagrees with the comment that “AR5 moderates many of the key findings of AR4.” This 

response has already discussed in detail EPA’s assessment of the AR5 findings on climate 

sensitivity and the implications for the SC-CO2 estimates. The other examples given by the 

commenter—anthropogenic warming, rate of warming, extreme temperatures, and tropical 

cyclone activity—are not findings that have been moderated in AR5. In fact, AR5 strengthened 

the conclusions about attribution of anthropogenic global warming by accounting for pollutants 

with a cooling effect and by strengthening the likelihood of warming (“very likely” in AR4 to 

“extremely likely” in AR5). Similarly, the AR5 findings on tropical cyclone activity

strengthened from “suggestions” in AR4 to “virtually certain” increases in frequency and 

intensity of the strongest tropical cyclones in the North Atlantic basin. The remaining two 

examples given by the commenter highlight historical information, not projections. EPA further 

notes that the commenter has not identified or discussed whether and how these particular AR5 

findings would affect the SC-CO2 estimates. 

In addition, EPA notes that the preamble section II discusses many new assessment reports 

published since the 2009 Endangerment Finding, including the recent USGCRP’s 2014 Third 

National Climate Assessment (NCA3), the IPCC’s 2013-4 Fifth Assessment Report (AR5) and 

IPCC’s 2012 “Special Report on Managing the Risks of Extreme Events and Disasters to 

Advance Climate Change Adaptation” (SREX). Section II of the preamble highlights changes, 

such as sea level rise, and cites the confidence in human attribution. The preamble concludes 

that the “findings of the recent scientific assessments confirm and strengthen the conclusion that 

greenhouse gases endanger public health, now and in the future.” See also section 4.2 of this 

RTC for EPA’s response to comments about use of the latest climate science, including AR5 

findings, in analyses separate from the IWG SCC estimates. Section 4.4-1, provides a detailed 

response to comments on the methodology and the integrated assessment models, including the 

damage functions, used to estimate the SC-CO2. Section 4.4-5 provides a detailed response to 

comments regarding the transparency of the SC-CO2 process and compliance with OMB 

guidance.

Other physical science components of the integrated assessment models.
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A key objective of the IWG was to draw from the insights of the three models while respecting 

the different approaches to linking GHG emissions and monetized damages taken by modelers in 

the published literature. After conducting an extensive literature review, the interagency group 

selected three sets of input parameters (climate sensitivity, socioeconomic and emissions 

trajectories, and discount rates) to use consistently in each model. All other model features were 

left unchanged, relying on the model developers’ best estimates and judgments, as informed by

the then-current literature. While the IAMs are periodically updated, the rapid pace of research in 

the area of climate science means that at any given time there may be new research that has not 

yet been incorporated into one or more models. Thus, while a given model may not always 

reflect the most recent research regarding any given climate subsystem, the IWG concluded that, 

at the time, the IAMs collectively represented the state of the science by bringing all these 

systems together into a single framework. 

A benefit of using an ensemble of three models is that they cover a range of potential outcomes 

as expressed in the literature. For example the three models used collectively span a range of 

carbon cycle and climate change responsiveness that reflects the uncertainty in the literature. 

With regards to comments on the temperature response function, the past 15 years of observed 

atmospheric temperatures cannot be compared directly to climate model simulations because (1) 

observed temperatures were influenced by volcanic eruptions that were not included in 

simulations because the timing and spatial distribution of eruptions are not known in advance; 

and (2) the last 15 years of atmospheric temperatures have been strongly influenced by natural 

climate variability due to oceanic fluctuations, such as the El Niño Southern-Oscillation; models 

include this variability, but no attempt is made to synchronize the models’ timing of this 

variability with observed variability. In other words, while the models incorporate variability

around a trend over time, they cannot predict how that variability affects measured temperatures 

in a specific year.

Regarding the criticisms by commenters of the sea level rise projections in DICE, the IWG 

recognizes that sea level rise projections are also an area of ongoing research. One key issue 

involves projections of melt from the Greenland and West Antarctic ice sheets. The IPCC AR5 

report notes there is a possibility of sea level rise “substantially above” their best estimate of a 

likely range because of uncertainties regarding the response of the Antarctic ice sheet (AR5 

Working Group I, Chapter 13). In AR5 the IPCC also discusses semi-empirical methods, stating 

a low confidence in projections based on such methods, which calibrate a mathematical model 

against observations rather than projecting individual processes. However, the IPCC did not 

entirely discount these methods. Further supporting the use of semi-empirical methods, the U.S. 

National Climate Assessment uses an average of the high end of semi-empirical projections in 

order to define their “Intermediate-High” Scenario (Parris et al., 2012). Therefore, it is 

reasonable for one out of three models used by the IWG to include some reliance upon semiempirical methods.

EPA is aware that more sophisticated yet still relatively simplified climate models, such as 

MAGICC, could be used to replace the highly simplified climate science components of the 

three IAMs. However, given the range of climate models available and the technical issues 

associated with such a change, replacing the climate modules or other structural features of the 

IAMs requires additional investigation before it can be applied to SCC estimation. EPA will 
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continue to follow and evaluate the latest science on climate modeling and, along with other 

members of the IWG, is seeking external expert advice on the technical merits and challenges of 

potential approaches to updating this component of the IAMs in future revisions to the SCC 

estimates. 

We agree with the commenters who suggested the IAMs do not fully capture the impacts 

associated with changes in climate variability and weather extremes. For example, as discussed 

in the 2010 TSD, the calibrations in FUND and DICE do not account for increases in climate 

variability that may occur and would affect the agricultural sector. Similarly, we agree that the 

models’ functional forms may not adequately capture potentially discontinuous “tipping p oint” 

behavior in Earth systems. In fact, large-scale earth system feedback effects (e.g., Arctic sea ice 

loss, melting permafrost, large scale forest dieback, changing ocean circulation patterns) are not 

modeled at all in one IAM, and are imperfectly captured in the others. This limitation of the three 

IAMs is discussed extensively in the 2010 TSD, and again in the 2013 update. The SCC estimate 

associated with the 95th percentile of the distribution based on the 3 percent discount rate is 

included in the recommended range partly to address this concern. EPA and the other members 

of the IWG will continue to follow and evaluate the latest science on climate variability and 

potential tipping points, and seek external expert advice on the technical merits and challenges of 

potential approaches to improve the representation of these components of the modeling in future 

revisions.

4.4.3 Global vs. Domestic Value 

Comment 4.4-3: Commenter 10091 states the IWG only reports the global value of the SCC 

which the IWG determines to accrue from continued carbon dioxide emissions in the United 

States. This is in direct violation of existing Office of Management and Budget (OMB) 

guidelines. OMB Circular A-4 (September 17, 2003) regarding Regulatory Analysis explicitly

states: Your analysis should focus on benefits and costs that accrue to citizens and residents of 

the United States. Where you choose to evaluate a regulation that is likely to have effects beyond 

the borders of the United States, these effects should be reported separately. In reporting the 

SCC, the IWG argues away the need to focus on benefits and costs that accrue to citizens and 

residents of the United States and instead bases its SCC solely on its determinations of effects 

beyond the borders of the United States. Rather than reporting the latter separately, as 

recommended by OMB guidelines, the IWG only reports the global costs and makes no 

determination of the domestic costs. Considering that the majority (if not all) of the federal 

regulations incorporating the SCC into cost/benefit analysis apply to rules regulating domestic 

activities (including this one), reporting only the global impact the knowledge (in all areas, i.e., 

economics, social, environmental, etc.) of which is far less constrained than potential U.S. 

impacts imparts a huge degree of uncertainty and is a grossly misleading. Thus, the IWG's 

determination of the SCC is not appropriate for use in this or any federal regulatory analysis. 

During the public comment period associated with new regulations such as this one which 

incorporate the SCC, a distinction should be made between domestic costs/benefits and foreign 

cost/benefits such that the public can judge for itself the value of the regulation. As it currently 

stands, the public likely has no idea that the benefits of the proposed regulations on domestic 

activities that supposedly accrue from incorporating the SCC are largely conferred upon foreign 

nations. This is clearly not a transparent situation.
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Commenter 10502 included a report stating: "The scientifically flawed Social Cost of Carbon 

(SCC) computational process attempts to compute the future global warming damage to the 

entire world-wide population that would be avoided by each ton of CO2 not emitted by US 

sources and count that highly uncertain world-wide avoided damage as a benefit of the 

regulation. But the SCC cost/benefit analysis only burdens the US economy and population (not 

the entire world) with the immediate cost impacts from issuance of the US regulations. These 

impacts to the US economy result in part from effective elimination of coal fired power plants, 

our most inexpensive electrical power source. This will result in much higher US energy costs 

and loss of jobs to other countries with lower coal-produced energy costs that do not choose to 

bear the burden of CO2 emissions control. Only the Legislative and Justice Branches of our 

government, duly protecting interests of US citizens, can sort out the wisdom of US citizens 

paying for the GHG emission sins of other nations that choose not to restrict their emissions, 

while willingly accepting the transfer from the USA of energy intensive industries to their lowercost energy economies." Commenter 10502 remarks stating the unilateral USA CO2 emissions 

regulations justified by the SCC, commit the USA population to bear the increased costs 

imposed by the regulations (a "hidden carbon tax" expressed by some critics) for highly

uncertain future damages to be incurred not only in the USA, but by the entire world-wide 

society. This certainly inflates the cost of SCC with respect to the cost that would accrue to the 

US only.

Commenter 10095 states in accordance with the White House Office of Management and 

Budget's (OMB) guidance on completing regulatory impact analyses, EPA must "focus on 

benefits and costs that accrue to citizens and residents of the United States." The RIA refers to 

the federal government's conclusion in its 2010 SCC technical support document that a global 

measure of the benefits from reducing U.S. emissions is preferable; however, solely using global 

SCC values contradicts OMB's guidance and is an issue that was raised in public comments 

regarding the 2013 SCC Technical Support Document ("TSD"). EPA, when applying SCC 

values in the RIA, also failed to analyze a seven percent discount rate which OMB's guidance 

suggests using as a base-case for regulatory analyses. EPA, to remain in accordance with explicit 

OMB guidance, must reassess the proposal's impact assessment using domestic, not global, SCC 

values and SCC values with a discount rate of seven percent.

Commenter 9194 adds that the IWG/OMB process is fatally flawed in that it fails to calculate the 

SCC using OMB's prescribed "base case" discount rate of 7% and impermissibly calculates 

global benefits instead of domestic benefits.

Commenter 10023 states because the proposed rule would govern only domestic activities, it is 

inappropriate for EPA to use a global social cost of carbon value to estimate the benefits of those 

activities. Cost-benefit analysis for domestic policy should examine domestic costs and benefits; 

including global benefits leads to bias in favoring regulation.

Commenter 9396 International Benefits: The IWG chose to model the global benefits of GHG 

reductions and then to assign those benefits to US reductions. The inclusion of costs of 

international harm is unprecedented and illegal. Administration authority to regulate 

international action or regulate for the international community is non-existent. By choosing to 

include international benefits the IWG has mixed apples in with oranges in the development of 

an appropriate SCC.
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Commenter 9681 states that use of a global SCC value is already influencing other international 

actors to follow suit, the International Monetary Fund (IMF) applies in its policy reviews an SCC 

estimate based on the IWG number.26 Given the potential influence of the IMF on the 

environmental policies of developing countries,27 the pull that the IWG's global estimate has at 

the IMF could be very advantageous to the United States, by motivating industrializing countries 

to use similar numbers in the future. In addition to this compelling strategic argument namely, 

that it is rational for the United States and other countries to continue their reciprocal, tit-for-tat 

use of a global SCC value to achieve the economically efficient outcome on climate change (and 

avoid catastrophic climate impacts) legal obligations further prescribe using a global SCC value. 

A basic ethical responsibility to prevent transboundary environmental harms has been enshrined 

in customary international law. For the United States to knowingly set pollution levels in light of 

only domestic harms, willfully ignoring that its pollution directly imposes environmental risks 

including catastrophic risks on other countries, would violate norms of comity among countries. 

The United States would be knowingly causing foreseeable harm to other countries, without 

compensation or just cause. Given that the nations most at risk from climate change are often the 

poorest countries in the world, such a policy would also violate basic and widely shared ethical 

beliefs about fairness and distributive justice. Indeed, taking a global approach to measuring 

climate benefits is consistent with the ideals of transboundary responsibility and justice that the 

United States commits to in other foreign affairs. The unmistakable implication of the 

Convention is that parties including the United States must account for global economic, public 

health, and environmental effects in their impact assessments. Binding international agreements 

also require consideration and mitigation of transboundary environmental harms. Notably, the 

United Nations Framework Convention on Climate Change to which the United States is a party

declares that countries policies and measures to deal with climate change should be costeffective so as to ensure global benefits at the lowest possible cost. The Convention further 

commits parties to evaluating global climate effects in their policy decisions, by employ[ing] 

appropriate methods, for example impact assessments . . . with a view to minimizing adverse 

effects on the economy, on public health and on the quality of the environment.

Commenter 9681 states obligations exist in domestic U.S. law. For example, the U.S. National 

Environmental Policy Act recognizes the worldwide and long-range character of environmental 

problems and requires federal agencies to include reasonably foreseeable transboundary effects 

in their environmental impact statements. While some individual statutes under which federal 

agencies will craft climate policies may be silent on the issue of considering extraterritorial 

benefits, arguably the most important statute for U.S. climate policy the Clean Air Act requires 

the control of air emissions that affect other countries and so encourages a global assessment of 

greenhouse gas effects. Specifically, Section 115 of the Clean Air Act directs EPA and the states 

to mitigate U.S. emissions that endanger foreign health and welfare. The global perspective on 

climate costs and benefits required by that provision should inform all regulatory actions 

 

26 E.g., Benedict Clements et al., International Monetary Fund, Energy Subsidy Reforms: Lessons and Implications 

9 (IMF Policy Paper, Jan. 28, 2013).

27 See Natsu Taylor Saito, Decolonization, Development, and Denial, 6 FL. A & M U. L. REV. 1, 16 (2010) 

(quoting former IMF counsel as saying today it is common to find these institutions [IMF and World Bank] 

requiring their borrowing member countries to accept and adhere to prescribed policies on environmental 

protection).
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developed under the Clean Air Act, including these proposed performance standards under 

Section 111.

Commenter 9681 states two practical considerations counsel in favor of a global SCC value. 

First, unlike some other significant international environmental impacts, no methodological 

limitations block the quantitative estimation of a global SCC value. In recent regulatory impact 

analyses for major environmental rules, EPA has qualitatively considered important transnational 

impacts that could not be quantified. For example, in the Mercury and Air Toxics Standards, 

EPA concluded that a reduction of mercury emissions from U.S. power plants would generate 

health benefits for foreign consumers of fish, both from U.S. exports and from fish sourced in 

foreign countries. EPA did not quantify these foreign health benefits, however, due to 

complexities in the scientific modeling. Similarly, in the analysis of the Cross-State Air Pollution 

Rule, EPA noted though could not quantify the substantial health and environmental benefits that 

are likely to occur for Canadians as U.S. states reduce their emissions of particulate matter and 

ozone pollutants that can drift long distances across geographic borders. Yet where foreign costs 

or benefits are important and quantifiable, other federal agencies frequently include those 

calculations. Given that sophisticated models already exist to quantify the global SCC, the global 

estimate is appropriate to use.

Commenter 9681 continues a global SCC value is in the national interest because harms 

experienced by other countries could significantly impact the United States. Climate damages in 

one country could generate large spillover effects to which the United States is especially

vulnerable. The mesh of the global economy is woven tightly, and disruptions in one place can 

have consequences around the world. As seen historically, economic disruptions in one country

can cause financial crises that reverberate globally at a breakneck pace. In a similar vein, 

national security analysts in government and academia increasingly emphasize that the 

geopolitical instability associated with climatic disruptions abroad poses a serious threat to the 

United States. Due to its unique place among countries both as the largest global economy with 

trade and investment dependent links throughout the world, and as a military superpower the 

United States is particularly vulnerable to international spillover effects. The 2010 TSD included 

a rigorous examination of global versus domestic SCC estimates. Consistent with the above 

discussion, the 2010 IWG reached the conclusion to estimate a global SCC value, citing both the 

global impacts of climate change and the global action needed to mitigate climate change. The 

IWG restated these arguments in the 2013 TSD, and refers back explicitly to its discussion in the 

2010 TSD. EPA should continue using a global SCC estimate in its regulatory impact analyses. 

Commenter 9681 states the IWG correctly used a global SCC value. To design the economically 

efficient policies necessary to forestall severe and potentially catastrophic climate change, all 

countries must use a global SCC value. Given that the United States and many other significant 

players in the international climate negotiations have already applied a global SCC framework in 

evaluating their own climate policies, the continued use of the global value in U.S. regulatory

decisions may be strategically important as the United States seeks to set an example for other 

countries, harmonize regulatory systems, and take the lead in ongoing international negotiations. 

Binding legal obligations, basic ethical responsibilities, and practical considerations further 

counsel in favor of the United States using a global SCC value. To avoid a global tragedy of the 

commons and an economically inefficient degradation of the world's climate resources, all 

countries should set policy according to a global SCC value. The climate and clean air are global 
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common resources, meaning they are free and available to all countries, but any one country's 

use i.e., pollution imposes harms on the polluting country as well as the rest of the world. 

Because greenhouse gases do not stay within geographic borders but rather mix in the 

atmosphere and affect climate worldwide, each ton of carbon pollution emitted by the United 

States not only creates domestic harms, but also imposes additional and large externalities on the 

rest of the world, including disproportionate harms to some of the least-developed nations. 

Conversely, each ton of carbon pollution abated in another country will benefit the United States 

along with the rest of the world. If all countries set their greenhouse gas emission levels based on 

only their domestic costs and benefits, ignoring the large global externalities, the collective result 

would be substantially sub-optimal climate protections and significantly increased risks of severe 

harms to all nations, including to the United States. "[E]ach pursuing [only its] own best interest . 

. . in a commons brings ruin to all."28 By contrast, a global SCC value would require each country

to account for the full damages of its greenhouse gas pollution and so to collectively select the 

efficient level of worldwide emissions reductions needed to secure the planet's common climate 

resources. 

Commenter 9681 continues well-established economic principles demonstrate that the United 

States stands to benefit greatly if all countries apply a global SCC value in their regulatory

decisions. A rational tactical option in the effort to secure that economically efficient outcome is 

for the United States to continue using a global SCC value itself. The United States is engaged in 

a repeated strategic game of international negotiations and regulatory coordination, in which 

several significant players, including the United States have already adopted a global SCC 

framework. For the United States to now depart from this implicit collaborative dynamic by

reverting to a domestic-only SCC estimate could undermine the country's long-term interests in 

future climate negotiations and could jeopardize emissions reductions underway in other 

countries, which are already benefiting the United States. A domestic-only SCC value could be 

construed as a signal that the United States does not recognize or care about the effects of its 

policy choices on other countries, and signal that it would be acceptable for other countries to 

ignore the harms they cause the United States. Further, a sudden about-face could undermine the 

United States credibility in negotiations. The United States has recently reasserted its desire to 

take a lead in both bilateral and international climate negotiations. To set an example for the rest 

of the world, to advance its own long-term climate interests, and to secure greater cooperation 

toward reducing global emissions, strategic factors support the continued use a global SCC value 

in U.S. regulatory decisions. Though the Constitution balances the delegation of foreign affairs 

power between the executive and legislative branches, [t]he key to presidential leadership is the 

negotiation function. Everyone agrees that the President has the exclusive power of official 

communication with foreign governments. The development and analysis of U.S. climate 

regulations are essential parts of the dialogue between the United States and foreign countries 

about climate change. Using a global SCC value communicates a strong signal that the United 

States wishes to engage in reciprocal actions to mitigate the global threat of climate change. The 

President is responsible for developing and executing the negotiation strategy to achieve the 

United States long-term climate interests. Currently, the President has instructed federal agencies 

to use a global SCC value as one important part of an implicit tit-for-tat negotiating strategy that 

 

28 Garrett Hardin, The Tragedy of the Commons, 162 SCIENCE 1243 (1968).
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encourages other countries to take reciprocal actions that also account for global externalities. 

The President's constitutional powers to negotiate international agreements would be seriously 

impaired if federal agencies were forced to stop relying on a global SCC value. 

Commenter 9681 continues the United States has already begun to harmonize with other 

countries its policies on climate change and on the valuation of regulatory benefits. For example, 

the United States has entered into a joint Regulatory Cooperation Council with Canada, which 

has adopted a work plan that commits the two countries to synchronizing aggressive greenhouse 

gas reductions, especially in the transportation sector. A separate Regulatory Cooperation 

Council with Mexico calls generally for improving and harmonizing policy "by strengthening the 

analytic basis of regulations," and its work plan acknowledges the transboundary nature of 

environmental risks. Mexico and Canada have both adopted greenhouse gas standards for 

vehicles that harmonize with the U.S. standards and that calculate benefits according to a global 

SCC value. Canada has also used the IWG's global SCC value in developing carbon dioxide 

standards for its coal-fired power plants, estimating $5.6 billion (Canadian dollars) worth of 

global climate benefits. The direct U.S. share of the net benefits from that Canadian regulation 

will likely total in the hundreds of millions of dollars. 

Commenter 9681 states further efforts at regulatory harmonization are currently underway. For 

example, the United States is now negotiating a Transatlantic Trade and Investment Partnership 

with the European Union, and a key element is regulatory coordination. The European Union has 

already adopted an Emissions Trading Scheme (ETS) to cap its greenhouse gas emissions, and 

its Aviation Directive (which extends the ETS cap to international flights) is just one of the 

climate policies that could be shaped by these negotiations. The European Commission has 

indicated its willingness to further reduce its ETS cap if other major emitters make proportional 

commitments a result that will only occur if countries consider more than their own domestic 

costs and benefits from reducing greenhouse gas emissions. Moreover, several individual 

European nations including the United Kingdom, France, Germany, and Norway - have adopted 

a global SCC value for use in their regulatory analyses. Some other European countries, such as 

Sweden, have adopted high carbon taxes that implicitly operate as a high SCC that accounts for 

global externalities. Even countries that have proposed setting carbon prices below the global 

SCC value acknowledge that, in an optimal system, prices worldwide would fully reflect the 

global harms of greenhouse gas emissions.

Commenter 9666 states that RIA should not use global SCC to estimate benefits, citing UARG 

on OMB's recent proposed rule to require agencies to use the SCC in rulemaking proceedings. 

Commenters explain that because the proposed SCC value would govern only domestic 

activities, it is inappropriate for the asserted benefits of the activities to be measured on a global 

scale. Cost-benefit analysis for domestic policy should examine domestic costs and benefits.

Commenter 7977 states the use of the SCC (social cost of carbon) overinflates the social benefits 

of the proposed rule. Commenter 7977-4861 states that the SCC is modeled to estimate the 

global benefit of CO2 reductions, wherein the proposed rule is specific to U.S. EGUs. Therefore, 

the social benefits calculated by EPA should represent those specific to the U.S. rather than 

worldwide. This is also contrary to OMB Guidance as stated in the SCC Technical Support 

Document.
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Commenter 9423 The TCEQ, PUC, and RRC understand that the SCC estimates are based on the 

global benefits of C02 reductions vs. the benefits that would occur domestically in the United 

States. Given that the SCC estimates will be used to compare benefits to the domestic costs of a 

regulatory action, the SCC estimates should be directly related to domestic benefits. TCEQ, 

PUC, and RRC note that 0MB Circular A-4 states that "analysis of economically significant 

proposed and final regulations from the domestic perspective is required, while analysis from the 

international perspective is optional." In the 2010 Technical Support Document: Social Cost of 

Carbon for Regulatory Impact Analysis Under Executive 0rder 12866, the Interagency Working 

Group concluded that a global measure of benefits from reducing U.S. emissions is preferable in 

order to address the global nature of climate change and to show that international action is 

necessary since "even if the United States were to reduce its greenhouse gas emissions to zero, 

that step would be far from enough to avoid substantial climate change." The TCEQ, PUC, and 

RRC disagree that a global measure is preferable in that the public has the right to know the 

domestic benefits vs. the domestic costs of a regulatory action. The use of a global SCC could 

show that benefits exceed costs when they actually may not provide any net benefits for the 

United States. In addition, the Interagency Working Group determined that the models were 

currently inadequate to determine region- or country-specific estimates of the SCC, but "that a 

range of values from 7 to 23 percent should be used to adjust the global SCC to calculate 

domestic effects." This range was based on very generalized key parameter assumptions using a 

2.5 or 3 percent discount rate (which in itself is a subjective and questionable rate) or 

alternatively by proportionally determining benefit by the U.S. share of gross domestic product. 

The Working Group itself acknowledged that this range was highly speculative. The TCEQ, 

PUC, and RRC submit that the method of translating global benefits to domestic benefits is so 

speculative at this time that its use is not appropriate. In summary, EPA should not use the SCC 

estimates in the current 111(b) rulemaking project until there has been a complete and thorough 

independent peer review of the process and model data.

Response 4.4-3: The comments regarding the scope of the SC-CO2 estimates mirror those 

submitted to the Office of Management and Budget’s separate comment solicitation on the SCC 

(78 FR 70586; November 26, 2013). As a member of the interagency working group (IWG) on 

SC-CO2, EPA has carefully examined and evaluated comments submitted to OMB’s separate 

solicitation. EPA has also carefully examined and evaluated all comments received regarding 

SC-CO2 through this rulemaking process and determined that the IWG responses to the 

comments on the OMB solicitation address the comments on the scope of SC-CO2 estimates and 

use of the estimates in this RIA. Specifically, EPA concurs with the IWG’s response to these 

comments and hereby incorporates them by reference. 29 

After careful evaluation of the full range of comments and associated technical issues described 

in section 4.4, EPA has determined that it will continue to use the current SC-CO2 estimates until 

further updates can be made to reflect forthcoming guidance from the Academies. EPA believes 

that the current estimates continue to represent the best scientific information on the impacts of 

climate change available in a form appropriate for incorporating the damages from incremental 

CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the current SC-

 

29 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 30 to 32 at 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-final-july-2015.pdf.
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CO2 estimates in the analysis of illustrative benefit-cost scenarios for new sources in RIA 

Chapter 5.30 

In addition, the comments regarding consistency with OMB Circular A-4, including selection of 

discount rates, are addressed in 4.4-5; response to comments about the selection of discount rates 

applies to the SC-CO2 is in 4.4-7.

The remainder of this section elaborates on these comments in the context of this rulemaking.

EPA agrees with the commenters who stated that a focus on global SC-CO2 estimates in RIAs is 

appropriate. As discussed in the 2010 TSD, the IWG determined that a global measure of SCCO2 is appropriate in this context because emissions of most greenhouse gases contribute to 

damages around the world and the world’s economies are now highly interconnected. To reflect 

the global nature of the problem, the SC-CO2 incorporates the full damages caused by CO2

emissions and other governments are expected to consider the global consequences of their 

greenhouse gas emissions when setting their own domestic policies. 

As stated in the OMB Response to Comments on SC-CO2, if all countries acted independently to 

set policies based only on the domestic costs and benefits of carbon emissions, it would lead to 

an economically inefficient level of emissions reductions which could be harmful to all 

countries, including the United States, because each country would be underestimating the full 

value of its own reductions. This is a classic public goods problem because each country’s 

reductions benefit everyone else and no country can be excluded from enjoying the benefits of 

other countries’ reductions, even if it provides no reductions itself. In this situation, the only way

to achieve an economically efficient level of emissions reductions is for countries to cooperate in 

providing mutually beneficial reductions beyond the level that would be justified only by their 

own domestic benefits. By adopting a global estimate of the SC-CO2, the U.S. government can 

signal its leadership in this effort. In reference to the public good nature of mitigation and its role 

in foreign relations, thirteen prominent academics noted that these "are compelling reasons to 

focus on a global [SC-CO2]" in a recent article on the SC-CO2 (Pizer et al., 2014). In addition, as 

noted by commenters, there is no bright line between domestic and global damages. Adverse 

impacts on other countries can have spillover effects on the United States, particularly in the 

areas of national security, international trade, public health and humanitarian concerns.

GHG emissions in the United States will have impacts abroad, some of which may, in turn, 

affect the United States. For this reason, a purely domestic measure is likely to understate actual 

impacts to the United States. Also, as stated above, the EPA and the other members of IWG 

believes that accounting for global benefits can encourage reciprocal action by other nations, 

leading ultimately to international cooperation that increases both global and U.S. net benefits 

relative to what could be achieved if each nation considered only its own domestic costs and 

benefits when determining its climate policies. 

Further, as explained in the 2010 TSD, from a technical perspective, the development of a 

domestic SC-CO2 was greatly complicated by the relatively few region- or country-specific 

 

30 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.
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estimates of the SC-CO2 in the literature, and impacts beyond our borders have spillover effects 

on the United States, particularly in the areas of national security, international trade, and public 

health. As a result, it was only possible to include an "approximate, provisional, and highly 

speculative" range of 7 to 23 percent for the share of domestic benefits in the 2010 TSD. This 

range was based on two strands of evidence: direct domestic estimates resulting from the FUND 

model, and an alternative approach under which the fraction of GDP lost due to climate change 

is assumed to be similar across countries.

Regarding the comments on Clean Air Act Section 115 and the implications for use of a global 

SC-CO2, EPA notes that these commenters reads into section 115 limitations and requirements 

that do not appear in the statutory text. 

Section 115(a) of the Clean Air Act requires the Administrator to give formal notification to the 

Governor of a State in a very specific and limited circumstances. Specifically, the provision 

provides: "Whenever the Administrator, upon receipt of reports, surveys or studies from any duly

constituted international agency has reason to believe that any air pollutant or pollutants emitted 

in the United States cause or contribute to air pollution which may reasonably be anticipated to 

endanger public health or welfare in a foreign country or whenever the Secretary of State 

requests [her] to do so with respect to such pollution which the Secretary of State alleges is of 

such a nature, the Administrator shall give formal notification thereof to the Governor of the 

State in which such emissions originate." Section 115(b) further provides that notices issued 

under 115(a) are deemed to be findings under section 110(a)(2)(H)(ii) of the Clean Air Act and 

thus any state receiving such a notice must revise its state implementation plan to address the 

offending emissions. 

Section 115(c), in turn, provides that the section only applies "to a foreign country which the 

Administrator determines has given the United States essentially the same rights with respect to 

the prevention or control of air pollution occurring in that country as is given that country by this 

section." In other words, unless the Administrator determines a foreign country has given the 

United States the same rights section 115 gives to foreign countries, the Administrator is not 

required issue any notification that would otherwise be required under 115(a). Contrary to the 

commenter’s assertion, section 115 does not mention or refer to "reciprocity agreements." 

Moreover, section 115(c) does not in any way limit the Administrator’s discretion to act under 

other statutory provisions. It simply limits the reach of 115(a) by defining which countries are 

covered by the requirement for the Administrator to give formal notification under that section 

regarding pollution originating in the United States that affects health and welfare in a foreign 

country. 

There is also no support in section 115 or any provision of the Clean Air Act for the 

commenter’s assertion that EPA is forbidden from counting harms or benefits occurring in other 

countries without first taking action under section 115. Section 115 requires the Administrator to 

issue a formal notification in the limited set of specific circumstances outlined above and 

identifies the obligations that flow from the issuance of such notifications. It does not, as the 

commenter suggests, include language prohibiting the EPA from considering the impact of U.S. 

emissions on foreign countries in other contexts. Indeed, the United States has a long history of 

working together with other countries to address air quality issues. As explained above, the 

reciprocity provision in section 115(c) merely defines the applicability of section 115. Nothing 
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in the text of the section addresses the extent to which EPA may consider or address the impacts 

beyond its borders that are related to air pollution originating in the United States, or suggests 

that action under section 115 is a prerequisite to counting international harms and benefits in any 

analysis.

Finally, there is no support for the assertion that section 115 requires EPA to list CO2 and/or 

other GHGs as criteria pollutants and notify state Governors to submit plans under section 110 

before taking any action to mitigate the impact of U.S. emissions on public health and welfare in 

foreign countries or counting international benefits in other rulemaking contexts. Not only does 

the limitation commenters identify simply not appear in the statutory text, but section 115(d) 

explicitly retains certain prior recommendations with respect to pollutants for which NAAQS 

have not been established. It would be absurd to interpret a section that explicitly retains 

recommendations relating to the impact of non-NAAQS pollutants on foreign countries as 

prohibiting the Administrator from considering such impacts unless a NAAQS has been 

established for the pollutant. 

Regarding the comment that EPA lacks authority to regulate GHG emissions outside the 

fenceline, EPA notes that application of the SC-CO2 to estimate the social benefits of emission 

reductions is entirely separate from regulating emissions. Conducting an economic analysis does 

not confer any legal or regulatory obligations. See the preamble, including section III, for 

discussion about the scope of the final rule and the legal justification. 

As stated in the OMB Response to Comments on SC-CO2, the IWG concluded that the only way

to achieve an efficient allocation of resources for emissions reduction on a global basis is for all 

countries to base their policies on global estimates of damages. The IWG has therefore 

continued to recommend the use of global SC-CO2 estimates in regulatory impact analyses. EPA 

agrees with the IWG conclusion and has used the global SC-CO2 estimates in the analyses of 

illustrative costs and benefit scenarios in the RIA. 

4.4.4 Uncertainty

Comment 4.4-4: Commenter 9396 states that for the electric sector and the commenting parties 

associated with this filing, EPA's use of the SCC as a valuation tool in major rulemakings is 

especially important for consideration. The IWG and the National Research Council (NRC) have 

flagged increased uncertainty regarding the relevance and accuracy of the SCC as developed by

the IWG for the purposes of regulatory actions that derive the bulk of their benefits from 

reductions in GHGs. Despite the serious limits of both quantification and monetization, SCC

estimates can be useful in estimating the social benefits of reducing carbon dioxide emissions. 

Under Executive Order 12866, agencies are required, to the extent permitted by law, "to assess 

both the costs and the benefits of the intended regulation and, recognizing that some costs and 

benefits are difficult to quantify, propose or adopt a regulation only upon a reasoned 

determination that the benefits of the intended regulation justify its costs." The purpose of the 

SCC estimates presented here is to make it possible for agencies to incorporate the social 

benefits from reducing carbon dioxide emissions into cost benefit analyses of regulatory actions 

that have small, or marginal, impacts on cumulative global emissions. Most federal regulatory

actions can be expected to have marginal impacts on global emissions.
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Commenter 9396 states the SCC as derived by the IAMs is an extremely subjective metric that 

was developed to try and quantify the benefits of reducing only domestic GHG emissions. The 

degree of subjectivity is best captured in the 2010 IWG report which states, "When attempting to 

assess the incremental economic impacts of carbon dioxide emissions, the analyst faces a number 

of serious challenges. A recent report from the National Academies of Science (NRC 2009) 

points out that any assessment will suffer from uncertainty, speculation, and lack of information 

about (1) future emissions of greenhouse gases, (2) the effects of past and future emissions on 

the climate system, (3) the impact of changes in climate on the physical and biological 

environment, and (4) the translation of these environmental impacts into economic damages. As 

a result, any effort to quantify and monetize the harms associated with climate change will raise 

serious questions of science, economics, and ethics and should be viewed as provisional." In 

other words, as with any economic model, the outcome is only as reliable as the input. The IWG 

made a number of assumptions that are questionable and worthy of a broader policy review 

inclusive of public participation and public comment prior to finalization and application in the 

regulatory development process. The IWG estimated benefits of reductions hundreds of years 

into the future, well beyond any reasonably predictable time horizon. Any rational assessment of 

future climate activity must ascribe an increasingly discounted view of future economic harm as 

the level of uncertainty regarding the probable outcome becomes correspondingly uncertain.

Commenter 9681: First, as a matter of law and economics, uncertainty in benefits estimates does 

not mean they should be excluded from regulatory impact analyses. No benefit or cost estimate is 

certain. Further, the courts have explicitly rejected this argument with respect to the SCC, and 

executive orders dating back as far as the Reagan administration have all issued guidelines 

specifying explicit consideration of benefits even if the precise size of the benefit is uncertain. In 

2008, the U.S. Court of Appeals for the Ninth Circuit determined that agencies could not assign a 

zero dollar value to the social costs of the impacts of climate change. It determined that failing to 

count SCC benefits would be illegal. Like the Court of Appeals, executive orders dating back to 

1981 have also required agencies to assess benefits and costs even when significant uncertainty

exists. Every president since (and including) Ronald Reagan has issued directives requiring that 

agencies conduct cost-benefit analyses of proposed regulations where permitted by statute. 

Specifically, agencies are directed to take into account benefits and costs, both quantitative and 

qualitative . . . and use the best available techniques to quantify anticipated present and future 

benefits and costs as accurately as possible. In this case, the National Highway Traffic Safety 

Administration (NHTSA) had decided not to count any avoided climate damages in issuing fuel 

economy standards. The court concluded: NHTSAs reasoning is arbitrary and capricious for 

several reasons. First while the record shows that there is a range of values, the value of carbon 

emission reductions is certainly not zero. The court's decision directly contradicts the petitioners 

argument that uncertainty renders the SCC invalid, as well as their demand that agencies use a 

value of zero.

Commenter 9681 states the IWG used solid economic tools to address uncertainty and ought to 

go further in capturing the full extent of its implications. The IWG was rigorous in addressing 

uncertainty. First, it conducted Monte Carlo simulations over the IAMs specifying different 

possible outcomes for climate sensitivity (represented by a Roe and Baker Distribution). It also 

used five different emissions growth scenarios and three discount rates. Second, the IWG 

reported the various moments and percentiles of the resulting SCC estimates. Third, the IWG put 
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in place an updating process, e.g., the 2013 revision, which updates the models as new 

information becomes available. As such, the IWG used the various tools that economists have 

developed over time to address the uncertainty inherent in estimating the economic cost of 

pollution: reporting various measures of uncertainty, using Monte Carlo simulations, and 

updating estimates as evolving research advances our knowledge of climate change. The Monte 

Carlo framework took a step toward addressing what is probably the most concerning aspect of 

climate change, the potential for catastrophic damages, i.e., low probability/high damage events. 

These damages come from: uncertainty in the underlying parameters in IAMs, including the 

climate sensitivity parameter; climate tipping point thresholds that, when crossed, cause rapid, 

often irreversible changes in ecosystem characteristics; and black swan events which refer to 

unknown unknowns. The analysis used a right-skewed distribution of temperature (as captured in 

the Roe Baker climate sensitivity parameter) and an increasing, strictly convex damage function; 

this correctly results in right-skewed distributions of damage and SCC estimates. By using the 

mean values of these estimates instead of the median, IWG estimates partially captured the 

effects of small probability, higher damages from high-level warming events, and as a result 

come to the wrong conclusions. An everyday analogy might be if an individual trying to watch 

his weight by dieting focused on median calorie intake per meal in a given month instead of the 

mean: the median calorie meal would be the meal such that half of all meals had calories below 

its value, and half above; the mean calorie meal would be the total number of calories in a month 

divided by the number of meals eaten. Dieters often deviate from their plan by occasionally 

having normal or excessive-calorie meals. If they focused on their median calorie intake, they'd 

never count the high calorie deviations and would undermine their efforts to lose weight (or, 

indeed, could even gain weight). Rather than the median, the mean would be the correct metric 

to use because it would capture these infrequent, high-calorie breaks with the diet. Another 

analogy is airplane safety regulation: safety is protected by guarding against the low-probability

but highly dangerous events. With climate change we do not have the luxury of knowing how 

damaging the extremes could be; all we know is that there is a very real possibility they could be 

devastating.) To reflect uncertainty in estimates resulting from the right-skewed distribution of 

SCC estimates, the IWG reported the SCC value for the 95th percentile from the central 3% 

discount rate distribution. This is done to reflect the estimation uncertainty in terms of the 

possibility of higher-than-expected economic impacts from climate change. While the IAMs take 

different approaches to explicitly modeling tipping points, which to a great extent is lacking in 

current versions of FUND and DICE, the IWG improved (but in no way fixed) the representation 

of uncertain catastrophic damages with the Monte Carlo analysis. Still, black swan events go 

completely unaddressed in the IWG modeling framework, and to the extent that society has a 

strong desire to prevent the occurrence of catastrophic events that is not reflected in the 

estimates.

Commenter (8925) states the uncertainty in SCC estimates has not yet been fully characterized, 

nor the sensitivity of the SCC fully evaluated. Commenter adds that this is true for uncertainties 

that were considered in the USG methods, as well as uncertainties that were not considered. 

Commenter continues that for many of the assumptions, the documentation does not discuss 

alternatives and their potential implications, nor establish that the sensitivities currently 

evaluated are representative and therefore justified. Commenter similarly states that a number of 

uncertainties were not evaluated, including emissions and energy intensities and technological 

change, carbon cycle modeling , radiative forcing , damage functions , adaptation, and 2300 

extensions.(See comment for reference) Commenter concludes that without more comprehensive 
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consideration of uncertainty, it is difficult to know whether the current estimates are biased, or if 

the uncertainty reflected in current estimates is sufficient and the estimates robust to alternative 

assumptions and additional uncertainties.

One commenter 8925 states the robustness of the current USG SCC estimates has not been 

established, or sufficiently evaluated.

Response 4.4-4: The comments regarding the consideration of uncertainty in SC-CO2 estimates 

mirror those submitted to the Office of Management and Budget’s separate comment solicitation 

on the SC-CO2 (78 FR 70586; November 26, 2013). As a member of the interagency working 

group (IWG) on SC-CO2, EPA has carefully examined and evaluated comments submitted to 

OMB’s separate solicitation. EPA has also carefully examined and evaluated all comments 

received regarding SC-CO2 through this rulemaking process and determined that the IWG 

responses to the comments on the OMB solicitation address the process comments summarized 

in this section. Specifically, EPA concurs with the IWG’s response to these comments and 

hereby incorporates them by reference.31 

After careful evaluation of the full range of comments and associated technical issues described 

in section 4.5, EPA has determined that it will continue to use the current SC-CO2 estimates until 

further updates can be made to reflect forthcoming guidance from the Academies. EPA believes 

that the current estimates continue to represent the best scientific information on the impacts of 

climate change available in a form appropriate for incorporating the damages from incremental 

CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the current SCCO2 estimates in the analysis of illustrative benefit-cost scenarios for new sources in RIA 

Chapter 5.32 EPA will continue to consider these comments and will share the recommendations 

with the IWG as it moves forward with the Academies process. 

The remainder of this section elaborates on the uncertainty comments in the context of this 

rulemaking. 

EPA agrees with the comments that supported the rigor of its uncertainty analysis. Uncertainty is 

inherent in all regulatory impact analysis. It is especially salient in regards to the SC-CO2

estimates because of their broad spatial and temporal dimensions. In addition to conducting 

Monte Carlo analysis for a subset of key parameters, the EPA and the other members of the IWG 

included extensive discussion of uncertainty in the TSDs, and the documentation for the 

individual IAMs themselves contains additional discussion of the assumptions and uncertainties 

in the models. The 2010 TSD and the updated 2013 TSD provided visual depictions of the 

distributions of the SC-CO2 estimates in addition to detailed statistics including percentiles and 

higher order moments. In addition to the extensive information provided in the TSDs, the IWG 

has provided the full range of model results to outside researchers upon request and will continue 

to do so. 

 

31 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 28 to 30 at 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-final-july-2015.pdf .

32 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.
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Regarding comments on uncertainty in the context of the socioeconomic-emission scenarios, see 

4.4-1. 

The 2010 TSD reports SC-CO2 estimates out to one decimal place (i.e., at least two significant 

digits) and the current TSD reports to the nearest dollar (i.e., two or three significant digits, 

depending on the year and discount rate/statistic). EPA and the other members of the IWG chose 

not to use decimal places in the 2013 TSD to avoid the impression of artificial precision but will 

also explore presentation with a consistent number of significant digits. EPA and the other IWG 

members welcome the recommendations to strengthen the characterization of uncertainty and 

plan to seek external expert advice on the technical merits and challenges of potential approaches 

to improve the characterization and analysis of uncertainty in future updates.

Regarding comments on the modeling of uncertainty in the SC-CO2 analysis, including the 

uncertainty explicitly represented in the IAMs and whether it captures the full range of 

uncertainty of the “true” value of the SC-CO2, see section 4.4- 8. 

EPA disagrees with the comments stating that the SC-CO2 is neither useful nor appropriate 

because of uncertainty, the broad range of estimates. EPA also disagrees that it is inappropriate 

to try to value the impacts of reductions in CO2 emissions. EPA notes that in 2007, the Ninth 

Circuit Court remanded a fuel economy rule to DOT for failing to monetize the benefits of the 

CO2 emissions reductions in its regulatory impact analysis, noting that “the value of carbon 

emissions reduction is certainly not zero.” 

All regulatory impact analysis involves uncertainty. EPA acknowledges uncertainty in the SCCO2 estimates but disagrees that the uncertainty is so great as to undermine use of the SC-CO2

estimates in regulatory impact analysis. The uncertainty in the SC-CO2 estimates is fully

acknowledged and comprehensively discussed in the TSDs and supporting academic literature. 

While uncertainty must be acknowledged and addressed in regulatory impact analyses, even an 

uncertain analysis provides useful information to decision makers and the public. For example, if 

an analysis shows that benefits of a policy option consistently do (or do not) justify costs even 

over a broad range of estimates, this may increase confidence in the robustness of this 

conclusion. Conversely, if choices among parameter estimates within a plausible range 

significantly affect the conclusions of the analysis, this is an important consideration in deciding 

how to weigh the analytical results in the decision making process. The presence of uncertainty

is thus not a reason to exclude the best available estimates of quantified/monetized benefits, as 

long as it is appropriately characterized. Rather, good regulatory practice requires that agencies 

use the best available scientific, technical and economic information to derive the best estimates 

of costs and benefits that they can, and then communicate to the public the limitations and 

uncertainties of the analyses. The RIA for this rulemaking and the SCC TSDs clearly discuss the 

limitations and uncertainties of the analysis. As noted in the RIA and TSDs, EPA is committed to 

periodic updates in the estimates to reflect ongoing developments in our understanding of the 

science and economics of climate change, including the treatment of uncertainty.
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4.4.5 Process-related Concerns

Comment 4.4-5: Many commenters either voiced support for or criticized particular aspects of 

the interagency process used to develop the SC-CO2 estimates. Process issues raised included 

consistency with applicable OMB guidance documents, peer review, transparency, opportunity 

for public comment, and appropriate use of the estimates.

Numerous comments were made concerning peer review of the SC-CO2 and supporting models 

(9685, 9396, 10618, 9194, 8966, 9423, 8032, 8925, 8966, 10095, 10662, 8032, 9194, 9422, 

9195).

Commenter 8925 states the USG SCC modeling application has not been explicitly peer 

reviewed, and two commenters (8925, 9592) state that the Administration should also consider 

model-specific peer review. Commenter explains that there is a significant difference between 

model peer review and peer review of an application of the model. Commenter adds that peer 

review of all three models could substantiate whether or not all of the models used are of 

equivalent caliber, and similar enough structurally. Commenter 9592 concludes that EPA should 

withdraw the SCC from use in any rulemaking where the SCC is used to justify and regulation 

until the peer review and public comment process has transpired.

Other comments regarding peer-review, transparency, and public comment included: 

 EPA, as a participant in the IWG, must subject the Technical Support Documents on the 

Social Cost of Carbon to independent peer review as directed by the President and 

mandated by the Information Quality Act (IQA) guidelines for Highly Influential 

Assessments. President Obama has stressed the importance of adhering to established 

scientific procedures, including independent peer review, when making policy decisions. 

EPA has chosen to ignore this clear mandate in the instance of the SCC TSD's and the 

use in rulemaking. In addition to general public comment, independent peer review of 

scientific assessments is essential including: the models and the formulations of key

drivers of the models including emissions, CO2 concentrations, temperature response to 

the natural forcings, sea level rise, and the details of the elements of "damage function" is 

required. 

 The EPA should subject the Interagency Working Group's Social Cost of Carbon TSD to 

independent peer review before it can use the SCC any rulemaking. The principles for 

this process are stipulated in the Information Quality Act (signed by President Clinton in 

2000) implemented through the 2005 guidelines for peer review. The OMB guidance 

recognizes that OMB is responsible for overseeing compliance with its rules regarding 

the quality of disseminated information, which include the peer review guidance. This is 

a statutory responsibility under 44 U.S.C. Section 3504(d)(1), which is incorporated by 

reference into the IQA. The OMB peer review guidance states "OIRA [of OMB], in 

consultation with OSTP, shall be responsible for overseeing implementation of this 

Bulletin." 

 OIRA could not approve any final rule using the SCC without ensuring that its peer 

review guidance has been fully implemented. At this time, it would be impossible for 
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OIRA to do so until EPA has completed the required peer review. The SCC assessment is 

a "highly influential scientific assessment" ("HISA") under the definition of a HISA in 

the 2005 OMB IQA peer review guidance. The OMB guidance contains "requirements" 

for the conduct of impartial outside peer reviews of highly influential scientific 

assessments. The U.S. Court of Appeals for the D.C. Circuit determined in Prime Time 

Int'l, Inc. v. Vilsack (599 F.3d 678, 685 (D.C. Cir. 2010)) that OMB guidance issued 

pursuant to the Information Quality Act is legally binding. Other legal precedents 

confirm that the peer review guidance is a legally binding and enforceable "legislative 

rule." 

 The provisions for HISAs are mandatory. A key term in the HISA definition concerns the 

meaning of the term "assessments." The OMB guidance also distinguishes between what 

is discretionary and what is mandatory, based on use of the terms "requirements," "shall," 

and "must." The term "scientific assessment" is defined in the OMB guidance as 

requiring a synthesis of various inputs. The OMB guidance definition states that it means 

"an evaluation of a body of scientific or technical knowledge, which typically synthesizes 

multiple factual inputs, data, models, assumptions, and/or applies best professional 

judgment to bridge uncertainties in the available information." The definition expressly

includes "model assessments." 

 The OMB guidance contains numerous mandatory "requirements" for what must be done. 

The OMB peer review guidance has been recognized as mandatory by the EPA Inspector 

General. On September 26, 2011, the Inspector General transmitted a report focusing on 

whether EPA had complied with OMB's and its own peer review requirements in issuing 

its greenhouse gas endangerment finding. The Inspector General concluded that EPA had 

not complied with OMB's peer review "requirements" for HISAs in certain respects. He 

also recommended that EPA revise its internal PEER REVIEW HANDBOOK "to 

accurately reflect OMB requirements..." Unfortunately EPA has chosen to ignore the IG's 

clear directive in its application of the SCC. All HISA's (highly influential scientific 

assessment(s)) must be peer reviewed independent of the sponsoring agency. Public 

comment on a rulemaking proposal is not a substitute for peer review. EPA must instruct 

the peer reviewers to prepare a peer review report that will be made public. In the case of 

HISAs, EPA must prepare a written response to the report. The IAMS have not been 

subjected to the required "Highly Influential Scientific Assessment" peer review. 

 Even though the new versions of the three integrated assessment models (IAM) used by

the U.S. government to estimate the SCC (DICE, FUND, and PAGE) were published in 

the "peer reviewed literature", the IQA requires a higher standard of peer review as 

described above. The fact that all of the models have been "peer reviewed" does not mean 

that any of them have been deemed to have any skill for predicting future emissions, 

temperatures, sea level rise or damages. EPA apparently has assumed that "new" means 

"better". EPA surely knows this is not the case in terms of the IPCC models (AR4, AR5) 

that are used to provide the critical climate sensitivity input. The "appearance" in 

economics journals is not adequate since the main drivers of the impacts are related to 

science and technology issues, not economics. The competence of the journal review 

should have been questioned by EPA and the requirements of the IQA followed.
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 SCC2013 acknowledged the continued limitations of the approach taken by the 

interagency group in 2010 (documented in the original 2010 TSD). SCC2013 did not 

revisit other assumptions with regard to the discount rate, reference case socioeconomic 

and emission scenarios, or equilibrium climate sensitivity. This was another major failure 

of EPA. Many additional peer review papers were available and should have been 

considered in the SCC2013 update. The developers of the models have an inherent 

conflict and are not acceptable judges of the adequacy of the peer review for their 

"updates". 

 The issue of public access to documentation and data is also a serious concern. All of the 

model documentation, formulations based on specific papers or interpretations, validation 

data and results, model code and cited papers should be available on a public website so 

that the public can examine the material and independently confirm the calculations of 

the models and use alternative input. As EPA knows, this is not the case. EPA has 

established the CREM website for all of the models it uses in regulatory analysis. The 

IAMs are missing. EPA claims that the IAMs were "updated" and "used" in peerreviewed literature. However there is no documentation that the IAMs used in either SCC 

2010 or SCC 2013/2013rev were ever independently peer-reviewed and validated as 

required by OMB's legally binding guidelines. EPA should immediately terminate this 

proceeding until the current OMB process of comment, response and resolution on 

Docket OMB-2013:0007-0001 has been completed. 

 The SCC fails in terms of process and transparency. The SCC is the product of a closed 

secretive process. The SCC fails to comply with OMB's guidance for developing 

influential policy-relevant information under the Information Quality Act, especially for a 

Highly Influential Scientific Assessment (HISA). The Integrated Assessment Models 

(IAMs) with inputs used for the SCC analysis were not subject to independent peer 

review. The results of the SCC are fatally flawed as a result of significant cumulative 

errors.

Some commenters stated that the modeling used does not provide a sufficient range of accuracy

for policy-making purposes. OMB and the IWG failed to use the latest science which indicates 

that the equilibrium climate sensitivity (ECS) distributions used by the modelers caused the SCC 

to be over-stated. The models employed and the assumptions used were not subjected to peer 

review nor were the 2010 and 2013 SCC estimates developed by the IWG.

To meet to its obligations under the Information Quality Act guidelines and President Obama's 

directive on Transparency, EPA should promptly post on regulations.gov the following 

information: 1. Initial and all subsequent drafts of the SCC2010, SCC2013 and SCC2013r 

reports, 2. All comments provided on each draft and documentation on how the comments were 

resolved, 3. The names of the individuals responsible for the drafts and the resolution of the 

comments, 4. Full documentation of every version of the Integrated Assessment Models (DICE, 

FUND, PAGE), including: a. The versions of the model used in SCC 2010, SCC 2013 and SCC 

2013r, b. The input to each run used in the analysis, c. The output of each model run, including 

the emissions as a function of time, the concentrations as a function of time, the temperature as a 

function of time, and the sea level rise as a function of temperature, d. Complete documentation 

of the formulas programmed in the models, e. Complete user instructions that will allow the 
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public to run the models and replicate the results, f. All data used to validate the models, and g. 

All validation run results. 5. The journal articles where each version of the IAMs used was "peer 

reviewed", and a. All cites to articles in which the results of the models were used (if any articles 

appear in pay-walled journals arrangements must be made for free public access), and b. All 

comments by EPA and any other USG agencies, employees, or contractors made as either peer 

reviewers or potential users.

Commenter 9396 states use of the Social Cost of Carbon (SCC) in EPA Rulemaking violates 

statutory administrative requirements, Administration guidelines and the norms of peer review. 

The SCC is a metric developed by an Inter-agency Working Group (IWG) to place a cost on CO2

emissions. The IWG defines the SCC as an estimate of the monetized damages associated with

an incremental increase in carbon emissions in a given year. The IWG issued an initial estimate 

of the SCC in 2010 without notice and public comment. In May of 2013, the IWG, without 

notice and public comment, adjusted the calculations used to account for the SCC. The change 

implemented in the TSD 2013 revision substantially increased the cost estimate to a degree that 

will have an identifiable and meaningful impact on future regulatory decisions. The IWG held no 

public meetings and no public input was solicited prior to either the 2010 or 2013 publication of 

the SCC. 

Commenter 9396 Commenter's concerns with the SCC are outlined in detail later in these 

comments. It is critical that the models, assumptions used in the models and the entire IWG 

administrative process, including access to all data and analyses used, be opened to all 

stakeholders for comment and review and that the entire process fully comply with Executive 

Branch guidelines, the Administrative Procedures Act (APA) and the Data Quality Act (DQA.)

Commenter 9396 states that the development of the Social Cost of Carbon violates the 

Administrative Procedures Act (APA) and the Information Quality Act (IQA) and cannot be 

used by the EPA in this rulemaking. Uncertainties with the models and assumptions used to 

develop the SCC render the SCC inappropriate for policy and rulemaking. EPA refers to the 

social cost of carbon (SCC) in the Regulatory Impact Analysis (RIA) for this proposed rule. The 

SCC is a metric developed by an Inter-agency Working Group (IWG) formed by the 

Administration, headed by the Office of Management and Budget (OMB) and the Council of 

Economic Advisors (CEA), to place a cost on CO2 emissions. According to an EPA letter to 

ranking member of the Senate Environment and Public Works Committee (EPW), it appears that 

much, if not all, of the analysis developing the SCC was done by EPA. The IWG defines the 

SCC as an estimate of the monetized damages associated with an incremental increase in carbon 

emissions in a given year. The same report goes on to state that [i]t is intended to include (but is 

not limited to) changes in net agricultural productivity, human health, property damages from 

increased flood risk, and the value of ecosystem services. In this rulemaking, EPA used the SCC 

as one of its screens to justify the designation of partial CCS as BSER for new coal plants. In 

response to an IQA petition submitted to OMB on September 4, 2013 by a group of trade 

associations, OMB solicited public comment on the SCC through a public comment process that 

applies to all Federal rulemakings and indicated that the SCC was intended for use by all 

agencies measuring the social cost of carbon emissions as they evaluate costs and benefits of 

rules. Thus OMB identified development of the SCC as a rulemaking to be used in other 

rulemakings.
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The Interagency Working Group's (IWG) use of the Integrated Assessment Models (IAMs) do 

not meet the IQA standards for policy-making including utility, transparency, and robustness. 

Commenters 9685 and 9687 raised issue with EPA's use of the Social Cost of Carbon 

(SCC). The commenters believe that E.O. 12866's mandate to perform a transparent cost-benefit 

analysis was not met with EPA's significant errors using the SCC in its regulatory analysis. The 

commenters stated that EPA violated E.O. 12866 and offer a numbered list of requirements that 

EPA must comply with prior to issuing any SCC technical support document or proposing any

rule pursuant to E.O. 12866 that include the following:

1. EPA must post a peer review plan in the peer review Agenda on its Science Inventory

and establish a mechanism whereby the public can comment on the plan. It should also 

consider inviting public and/or professional society nominations for the independent peer 

review group. EPA should post a draft charge to the peer reviewers and request comment 

on the draft charge.

2. EPA must select a group of peer reviewers. The selected peer reviewers must be 

independent from the government, be impartial experts, and be sufficient in number to 

fairly and impartially represent expertise in science, technology, economics, statistics, 

and modeling. The peer reviewers must be free of any conflict of interest. Selection 

should be in conformance with National Academy procedures, as indicated in the OMB 

guidance.

3. EPA must develop a charge for the peer reviewers that instructs them to address all the 

assessment issues (including costs) reflected in the SCC, while avoiding allowing any 

policy considerations that would bias their deliberations and conclusions to intrude. The 

charge must also include instruction on the information quality standards in OMB's 2002 

general IQA government-wide guidance. The agency (either in the charge or otherwise) 

must instruct the peer reviewers to prepare a written report stating their conclusions in 

response to the charge, and advise them that the report will be made public.

4. EPA must give the peer reviewers and the public access to all materials relevant to their 

review, including the ability to run the models.

5. EPA must sponsor at least one public meeting of the peer review group at which 

interested members of the public can make oral comments. It must also provide an 

opportunity for written public comments. OMB must ensure that the peer reviewers have 

access to all significant public comments on the scientific/technology/economics 

evaluation issues.

6. Upon completion of the peer review, EPA must make available to the public the peer 

reviewers' report, the charge, and the reviewers' names, affiliations, and areas of 

expertise.

7. EPA must provide a written response to the peer review report in which it discusses 

whether and why it agrees or disagrees with its conclusions.

EPA must require that any agency include in the administrative record for any final rule that 

relies on the SCC a "certification" explaining how the agency has complied with the OMB peer 

review guidance and the applicable (2002) general information quality guidelines. Other 

commenters expressed support in a joint letter (9681) for the process used to develop the SCC 

estimates: 
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The IWG's choice of three IAMs was fully justified but should still be revisited in its next 

iteration. In its calculations of the SCC, the IWG relied on the three Integrated 

Assessment Models (IAMs) available at the time, all with a long record of peer-reviewed 

publications that link physical and economic effects: the Dynamic Integrated Model of 

Climate and the Economy (DICE), the Climate Framework for Uncertainty, Negotiation, 

and Distribution (FUND), and Policy Analysis of the Greenhouse Effect (PAGE). The 

government's first SCC estimates, published in 2010, used the then-current versions of 

the models; the recent update employed revised, peer-reviewed versions of the models 

but maintained the underlying assumptions of the 2010 IWG analysis. As stated by the 

2010 IWG, the main objective of [the 2010 IWG modeling] process was to develop a 

range of SCC values using a defensible set of input assumptions grounded in the existing 

scientific and economic literatures. They represent the state-of-the-art IAMs. Each of 

these models has been developed over decades of research, and has been subject to 

rigorous peer review, documented in the published literature. 

The analytic work of the IWG has been transparent. The 2010 Technical Support Document 

(TSD) set out in detail the IWG's decision-making process with respect to how it assessed and 

employed the models. Because the 2013 IWG made no changes to the input assumptions and 

procedures for deriving its SCC estimates, the 2013 TSD discusses only how the three Integrated 

Assessment Models (IAMs) used in the analysis were updated in the academic literature over the 

three-year interim period by the independent researchers who have developed these models. The 

2013 TSD also establishes that the increase in the SCC estimate from 2010 to 2013 resulted 

solely from updates to the three underlying IAMs.

The OMB recently created a further opportunity for public comments and transparent review 

specifically on the calculation of the social cost of carbon. Additionally, the comment period on 

these greenhouse gas proposed performance standards for power plants are yet another 

opportunity for continued dialogue about areas requiring further study. Such repeated comment 

processes demonstrate that the IWG's SCC estimates were developed and are being used 

transparently. Given their strong grounding in the best science available, nothing should prevent 

the current, continued use of this well-established estimate. As economic and scientific research 

continues to develop, future revisions will be able to further refine existing estimates based on 

the latest peer-reviewed literature and the latest updates to the quality of the overall modeling 

exercise. Commenter contends that the SCC is an important and accepted tool for regulatory

policy-making based on well-established law and fundamental economics. Despite recent attacks 

from fossil fuel and other industry groups, the legal and analytic basis for using the SCC is clear 

and well established. Several industry groups recently submitted a petition to OMB and the 

individual agencies involved in the IWG requesting the prohibition of the use of the 2010 and 

2013 SCC estimates by the government and the withdrawal of the supporting documents that 

describe the calculation of the SCC. In addition some of the same parties recently weighed in on 

the use of the SCC in a Department of Energy rulemaking. In particular, petitioners contend: 1) 

that estimates of the SCC are purportedly too uncertain and imprecise to be used for regulatory 

analysis. The petitioners argue that alleged uncertainty and imprecision renders the SCC an 

illegitimate tool for use in regulatory impact analyses. They discuss a number of technical 

methodological approaches reflected in SCC models used by the IWG, such as the time horizon 

of the analysis and the choices of which direct and indirect benefits to include, and mistakenly 

conclude that the limitations of SCC estimates preclude the IWG's use of them. Petitioners 
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misrepresent both the view of the Intergovernmental Panel on Climate Change (IPCC) and 

economists own assessments of SCC limitations. 2) That the IWG supposedly did not follow 

appropriate protocols in either its estimation or use of the SCC. The petitioners claim that the 

IWG failed to sufficiently describe the uncertainties in its analysis; made inappropriate technical 

choices with respect to discount rates and the choice of a global rather than domestic SCC; failed 

to go beyond the extensive peer review of the underlying models and have its use of the models 

peer reviewed; and denied stakeholders proper notice or opportunity to comment on the IWG's 

use of updated versions of the underlying models. 3) In light of these two claims, these industry

critics argue that the SCC must be banned from use while it undergoes a wholly new public 

review process. They assert that the IWG's SCC estimates are arbitrary and capricious, and likely 

overestimated. While the SCC would be under re-review, the petitioners request that OMB 

require agencies to assign a value of zero to carbon pollution damages. The call for best available 

techniques addresses all of the petitioners’ specific comments around appropriate time periods 

and other modeling choices: The IWG's use of Integrated Assessment Models (IAMs) reflects 

the best available, peer-reviewed science to tally the benefits and costs of specific regulations 

with impacts on carbon dioxide emissions. The IAMs include benefits and costs that have been 

quantified to date. Other modeling assumptions represent reasonable choices on the part of the 

IWG. For example, cutting off the analysis after around 300 years simply reflects the fact that 

any benefits and costs thereafter are de minimis given the strong impact discounting has on 

reducing the value of distant effects in the SCC. Similarly, petitioners assert that assumptions 

around socio-economic pathways do not properly reflect the impact of current regulations and, 

therefore, lead to double counting. The IWG should indeed periodically update its choice of 

socio-economic scenarios to reflect major changes in economic growth projections and other 

factors influencing emissions trajectories. However, the long-term emissions impact of any one 

particular energy efficiency or other carbon reduction standard is only marginal to the trajectory

of socio-economic scenarios, minimizing any risk of double counting the regulatory benefits. 

Second, while agencies are expected to use the best available science to inform their regulatory

impact analyses, there is no legal basis for demanding that an agency's analysis itself undergo 

academic peer review. What is required is that agencies undertaking rulemakings provide public 

notice and an opportunity for public comment on their analyses, and respond to those comments. 

The petitioners have had multiple opportunities to comment on the IWG's analysis and will have 

additional opportunities to do so in future rulemakings. The IWG's cost of carbon estimates have 

been referenced in more than forty rulemakings to date, and agencies have responded to relevant 

comments submitted thus far. Indeed, many of the changes the IWG made in its updated 

methodology were in response to such comments. This comment period from EPA provides yet 

another opportunity for feedback. The bottom line is that the IWG has properly and lawfully

used the best available techniques to quantify the benefits of carbon emission reductions, basing 

its analysis on the peer-reviewed literature. When agencies use the IWG's estimates of the SCC 

to calculate the benefits of a rulemaking, they have taken, and will continue to take, comment on 

the SCC and the process used to derive that value. That is what the law and good policy requires. 

The petitioners offer no alternative estimation procedure. They simply ask OMB and rulemaking 

agencies to contravene the Ninth Circuit's decision by substituting zero for the IWG's best 

estimate of the costs of carbon pollution. This should be seen for the cynical tactic that it is: an 

attempt to delay any action to cut carbon pollution.

Commenter 9681 continues the IWG's analytic process was science-based, open, and transparent. 

To facilitate accounting for the costs of climate impacts and the benefits of reducing carbon 
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pollution in regulatory proceedings undertaken by different agencies, the United States 

government assembled the IWG in 2010 to develop an estimate of a social cost of carbon that 

can be utilized in rulemakings and other pertinent settings across the federal government.5 The 

2010 estimate of carbon pollution reduction benefits has been used in several benefit-cost

analyses related to federal rulemakings. The IWG recently released an updated set of SCC 

estimates, centered at approximately $37 per metric ton of CO2 for emissions in the year 2015, in 

2007 dollars at a 3% discount rate. The 2013 SCC estimates are higher than those from 2010, 

reflecting the growing understanding of the costs that climate impacts will impose on society. 

(The 2010 central estimate for 2015 was $24/ton.) The increase in the SCC estimate is important 

because it reflects the growing scientific and economic research on the risks and costs of climate 

change, but is still very likely an underestimate of the economic cost of carbon emissions. The 

increase is also necessary given the costs of climate change that we are already experiencing, 

such as those associated with sea level rise and rising temperatures. Climate change is making 

coastal flooding, drought, and impacts from extreme weather worse.

Commenter 9194 states the SCC calculation ignores requirements of OMB's Circular A-4 to 

calculate both benefits and costs for regulatory purposes.

Commenter 9681 states they strongly affirm that the current Social Cost of Carbon (SCC) values 

are sufficiently robust and accurate to continue to be the basis for regulatory analysis going 

forward. As demonstrated below, if anything, current values are significant underestimates of the 

SCC. As economic and scientific research continues to develop in the future, the value should be 

revised, and we also offer recommendations for that future revision. Presidential orders on 

regulatory analysis also support use of a global SCC value. In 2012, President Obama issued 

Executive Order 13609 on promoting international regulatory cooperation. The Order built on 

his previous Executive Order 13563, which in turn had affirmed its 1993 predecessor, Executive 

Order 12866, in requiring benefit-cost analysis of significant federal regulations. Though White 

House guidance published in 2003 on regulatory impact analysis under E.O. 12866 assumed that 

most analyses would focus on domestic costs and benefits, it ultimately deferred to the discretion 

of regulatory agencies on whether to evaluate "effects beyond the borders of the United States." 

More importantly, since the publication of that guidance, President Obama has issued his own

supplemental orders on regulatory analysis, including E.O. 13609, which clarified the 

importance of international cooperation to achieve U.S. regulatory goals. This 2012 order 

explicitly recognizes that significant regulations can have "significant international impacts," and 

it calls on federal agencies to work toward "best practices for international regulatory

cooperation with respect to regulatory development." By employing a global SCC value in U.S. 

regulatory development, and by encouraging other countries to follow that best practice and 

account for the significant international impacts of their own climate policies, federal agencies 

will advance the mission of this presidential order on regulatory harmonization. 

Commenter 9194 states the IWG/OMB process is fatally flawed in that it fails to calculate the 

SCC using OMB's prescribed "base case" discount rate of 7% and impermissibly calculates 

global benefits instead of domestic benefits. Commenter 9194-6571 continues the SCC 

calculation ignores requirements of OMB's Circular A-4 to calculate both benefits and costs for 

regulatory purposes. Also, Commenter 9194-6573 states that rulemaking is subject to the 

Administrative Procedures Act (APA) which requires public notice and identification of the legal 

authority for the rulemaking. OMB has provided no identification of a statutory authority or 
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basis for development of the SCC for use in all federal rulemaking. Use of the SCC in this rule 

making will constitute a violation of the APA and the Information Quality Act (IQA).

Commenter 9396 states the SCC estimates are considered under the premise that U.S. citizens 

will forego GHG generating activities (wealth creation/GDP) in the present to potentially

forestall global change for the benefit of future global generations 100-300 years into the future. 

For the purposes of environmental review, the increased estimated benefit of GHG emission 

reductions helps justify the cost of new regulations by increasing the presumed benefits of the 

regulation. The IWG issued an initial estimate of the SCC in 2010 without notice and public 

comment. In May of 2013, the IWG, without notice and public comment, adjusted the 

calculations used to account for the SCC. The change implemented in the TSD 2013 revision33

substantially increased the cost estimate to a degree that will have an identifiable and meaningful 

impact on future regulatory decisions. The IWG held no public meetings and no public input was 

solicited prior to publication of either SCC. Efforts by non-governmental entities to secure 

information regarding which officials served on the IWG were thwarted and virtually no 

information regarding the meetings held by the IWG, meeting minutes, background materials, 

underlying data or preliminary analyses have been made available to the public. Indeed, at this 

time, the public has not even been advised who actually attended the meetings. The SCC 

estimate adjustments made for 2013 are much higher than the ones reported in the 2010 TSD. By

way of comparison, the four 2020 SCC (measured as the benefit per metric ton of CO2

emissions) estimates reported in the 2010 TSD were $7, $26, $42 and $81 using 2007 dollar 

values. The updated SCC estimates for 2020 now are almost double that of the 2010 TSD. The 

updated numbers for 2020 are $12, $43, $65 and $129 using 2007 dollar values. Each of these 

numbers ascribes a deemed damage function to each ton of CO2 emitted into the atmosphere in a 

manner that ascribes a level of certainty that far exceeds what the Integrated Assessment Models 

(IAM) actually deliver. This unfounded level of certainty is further exacerbated by the ascription 

of a single number based on averaging these numbers to develop the single number of $39 in 

2013. Commenter's major concern is how the SCC will be used to influence decisions regarding 

energy generation options in the future. In the table below by using the IWG SCC median value, 

a typical coal-fired power plant would have an annual social cost of over $210 million, with over 

$154 million attributed to CO2 based on the SCC.75 Even with an environmentally preferred 

NGCC power plant, the annual social cost is over $74 million with $73 million of that cost 

coming from the SCC. That is a startling 98% of the social cost being attributed to CO2 and the 

SCC. The question is, does this seem reasonable?

Commenter 9396 states the decisions rendered by the IWG regarding how best to account for 

these variables result in outcomes that are significant for the regulated industry. As Resources for 

the Future explained in a recent White Paper on the SCC: The impact of SCC numbers is not 

theoretical and has consequences for the government regulatory process and therefore for the 

strength of regulations on climate change that emerge from it. Application of this tool can be 

problematic to achieving optimum outcomes for society. A growing literature indicates that 

developing the SCC requires assumptions that go well beyond the usual boundaries of science or 

 

33 TSD May 2013 found at 

http://www.whitehouse.gov/sites/default/files/omb/inforeg/social_cost_of_carbon_for_ria_2013_update.pdf.
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economics. It requires many judgment calls that are hidden in complex economic models and 

largely invisible to policymakers and stakeholders. 

Commenters 10098, 8925, 8925, 8925, 10087 state generally that the SCC should not be used in 

any rulemaking procedure due to issues that include lack of transparency in formulating the SCC 

estimates, reliance upon modeling with inputs that lacked peer review, the failure to disclose and 

quantify key uncertainties involved in the modeling, and the use of a global benefit estimate that 

severely limits the SCC's utility. Commenter 8925 states the description and discussion of the

2013 revisions is insufficient for understanding and interpreting the changes in the USG SCC 

results and that additional justification for many of the revisions would be helpful (e.g., space 

heating expenditure reductions, transient temperature responses, constant indirect methane 

radiative forcing effect, saturation, regional scaling factors, probability of a discontinuity, 

adaptation, CO2 absorption, regional climate modeling). Commenter continues that discussion of 

uncertainty would be helpful, and it would be reasonable to explain differences across models for 

similar components (e.g., sea level rise, transient temperature response, saturation, adaptation). 

Commenter closes stating it is unclear which revised elements were peer reviewed, and that a 

clear citation for each of the revisions in each model would be useful. Commenter 8925 states 

the SCC TSDs methods are not fully clear, basic information is lacking, and commenter 

requests additional detail and discussion regarding the following: PAGE and FUND 

probabilistic methods and their differences; undiscounted damages over time from each model 

and for different scenarios; 2013 vs. 2010 GDP loss curves with respect to temperature (i.e., 

similar to Fig. 1a in USG, 2010); regional 2300 extensions; temperature projections to 2100 and 

2300; and key differences across models and their implications. Commenter further states it 

would be valuable to make all the results available for download, that information critical to the 

results should appear in the TSDs, and that the documentation should be written to facilitate peer 

review.

Response 4.4-5: The comments regarding the process issues mirror those submitted to the Office 

of Management and Budget’s separate comment solicitation on the SC-CO2 (78 FR 70586; 

November 26, 2013). As a member of the interagency working group (IWG) on SC-CO2, EPA 

has carefully examined and evaluated comments submitted to OMB’s separate solicitation. EPA 

has also carefully examined and evaluated all comments received regarding SC-CO2 through this 

rulemaking process and determined that the IWG responses to the comments on the OMB 

solicitation address the process comments summarized in this section. Specifically, EPA concurs 

with the IWG’s response to these comments and hereby incorporates them by refer ence.34 

After careful evaluation of the full range of comments and associated technical issues described 

in section 4.4, EPA has determined that it will continue to use the current SC-CO2 estimates until 

further updates can be made to reflect forthcoming guidance from the Academies. EPA believes 

that the current estimates continue to represent the best scientific information on the impacts of 

climate change available in a form appropriate for incorporating the damages from incremental 

CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the current SCCO2 estimates in the analysis of illustrative benefit-cost scenarios for new sources in RIA 

 

34 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 34 to 41 at 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-final-july-2015.pdf.
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Chapter 5.

35

 EPA will continue to consider these comments and will share the recommendations 

with the IWG as it moves forward with the Academies process. 

See section 4.1 for EPA’s detailed response to comments on climate change science and section 

4.4-3 EPA’s detailed response to comments on the use of a global versus domestic SC-CO2. See 

section 4.4-7, for EPA’s detailed response to comments about the selection of the discount rate. 

See also EPA’s detailed response to comments on the IAMs and damage functions in 4.4-1, 

EPA’s response to comments on uncertainty in 4.4-4, and EPA’s response to comments 

regarding the application of the SC-CO2 estimates to this rulemaking in 4.4-8.

The remainder of this section elaborates on the process comments in the context of this 

rulemaking.

Legal/statutory authority for issuing the SC-CO2 estimates

EPA agrees with commenters who believe that federal agencies have legal authority to develop 

these estimates, and notes that the IWG was cognizant of the Ninth Circuit decision referenced 

by these commenters when it decided to do so. EPA does not agree that the IWG’s issuance of 

the SC-CO2 estimates constituted an APA rulemaking. As noted in the OMB Response to 

Comments on SC-CO2, the IWG did not agree with comments that issuance of the SCC estimates

constitutes an APA rule making (page 34). The APA definition of a rule is "an agency statement 

of general or particular applicability and future effect designed to implement, interpret, or 

prescribe law or policy." The SCC estimates are not designed to implement, interpret, or 

prescribe law or policy. Rather they are intended to provide guidance to agencies on a sciencebased methodology for estimating the benefits of CO2 reductions in regulatory impact analysis.

EPA notes that OMB has long-established authority to oversee the regulatory review process, 

including preparation of regulatory impact analyses. OMB’s authority in this area is contained in 

Executive Orders 12866 and 13563, among others, and has been acknowledged by Congress in a 

series of statutes, including the Small Business Regulatory Enforcement and Fairness Act, the 

Congressional Review Act, the Information Quality Act, and the Regulatory Right to Know Act. 

It is fully consistent with this authority for OMB to offer guidance to agencies on best practices 

for conducting regulatory impact analysis, as it did, for example, in issuing Circular A-4. In the 

case of the SC-CO2 estimates and underlying TSDs, OMB determined that it was appropriate to 

exercise this authority through a consensus-based process involving a broad range of agencies 

that may issue rules affecting CO2 emissions.

The TSDs explain in detail the factual and policy basis for all of the various methodological 

choices involved in developing the SC-CO2 estimates. The IAMs are documented in the 

scientific literature. In addition, EPA has assisted interested members of the public in obtaining 

additional information on the workings of the models. It has also provided full technical details 

of its own use of the models, including output of model runs, to interested parties upon request. 

However, because the SC-CO2 estimates are not a rule, as a legal matter they are not subject to 

the arbitrary and capricious standard of the APA.

 

35 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.
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Consistency with applicable OMB guidance documents, transparency, opportunity for public 

comment

EPA agrees with the commenters that concluded the analytic work of the IWG has been 

transparent and provided clear examples in support of this conclusion. As discussed below, EPA 

disagrees with the comments that (1) the process to develop the SC-CO2 was non-transparent and 

(2) that this process was inconsistent with the Administration’s goals for transparency in 

scientific information. 

Furthermore, EPA strongly disagrees with the claim that the Agency has not provided 

information necessary to understand the SC-CO2 estimates and that it "deprives the IWG, OMB 

and other executive rulemaking agencies of the benefit of any public input on the critical 

decisions, inputs, and assumptions that form the basis of the SCC estimates." First, EPA notes 

that the estimates and supporting TSDs are developed and issued through a consensus based 

process involving the entire working group. Second, EPA has assisted individual requestors in 

obtaining more detailed information about the modeling. For example, one requestor noted 

publically that the EPA "modelers have been very open, collegial, and helpful."

36 EPA has also 

responded to numerous letters from members of Congress regarding the SC-CO2 estimates as 

well as requests under FOIA.37

In particular, EPA believes that the process was inclusive, transparent, and appropriately 

considered public input. The TSDs fully document the methodology used to develop the 

estimates and the considerations that led the IWG to adopt this methodology. While the details of 

the IWG’s internal processes were not discussed in the TSDs, this is common for most 

government (and non-government) documents. Such details were not considered germane to the 

public’s understanding of the SC-CO2 estimates and the methodology used to produce them, but 

a general overview is provided here.

In developing the 2010 estimates, the EPA and other members of the IWG met frequently in the 

year preceding the release of the February 2010 TSD. For the 2013 update, only a few meetings 

were needed because the group decided to make no changes beyond incorporating the most 

recent versions of the IAMs. IWG members, in particular professional economic staff with 

modeling expertise oversaw the primary modeling and calculations for both the 2010 and 2013 

SCC estimates using the most recent versions of the three IAMs available at the time. To develop 

the 2010 estimates, the staff members ran two of the three models and contracted with the 

developer of the third model to perform those runs. The contractor did not participate in any of 

the interagency meetings but rather received instructions for how to conduct the model runs (e.g., 

specification of the three sets of input assumptions as determined by the working group). The 

staff members ran all three models to develop the 2013 estimates. Decision making for both the 

2010 and 2013 processes was by consensus of IWG members. The details of internal discussions 

are deliberative, but the discussions were generally technical in nature and the issues discussed 

 

36 See http://dailysignal.com/2013/11/06/white-house-reopens-the-scc/.

37 For example, January 16, 2014 letter from Joel Beauvais, Associate Administrator, to Senator Vitter. EPA also 

responded to FOIA requests submitted by Sidley and Austin (EPA-HQ-2013-009517, EPA-HQ-2013-009518, EPAHQ-2013-009523). 
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and conclusions reached are well documented in the TSDs. Regarding the transparency of the 

underlying models themselves, the IWG notes that they are well documented in the academic 

literature.

The Government Accountability Office (GAO) also completed a review of the process used to 

develop the SCC estimates. In its 2014 report, GAO concluded that according to IWG 

participants, all major issues discussed were documented in the TSDs, which is consistent with 

Federal standards for internal control, and the processes and methods used were based on the 

principles of (1) consensus-based decision-making, (2) reliance on existing academic literature 

and modeling, and (3) disclosure of limitations and incorporation of new information through 

consideration of public comments and revision of the estimates as updated research became 

available. 

Regarding the explanation in the TSD for the 2013 revisions, no changes were made to the input 

assumptions developed by the IWG between the 2010 and 2013 estimates. The only changes 

were those made by the model developers themselves to the underlying models, which are 

documented in the academic literature. To assist the public in understanding these changes, the 

2013 TSD provides a brief summary of the most important ones, as well as references to the 

relevant literature where more detailed information can be found. As with the 2010 TSD, the 

IWG did not attempt to evaluate the modeling choices made by the modelers. As noted in the 

OMB Response to Comments, by selecting the three “most widely used impact assessment 

models” (NAS, 2010), the IWG intended to reflect a reasonable range of modeling choices and 

approaches that collectively reflect the current literature on the estimation of damages from CO2

emissions. As explained in the 2010 TSD: 

The parameters and assumptions embedded in the three models vary widely. A key

objective of the interagency process was to enable a consistent exploration of the three 

models while respecting the different approaches to quantifying damages taken by the 

key modelers in the field. An extensive review of the literature was conducted to select 

three sets of input parameters for these models: climate sensitivity, socio-economic and 

emissions trajectories, and discount rates...All other model features were left unchanged, 

relying on the model developers’ best estimates and judgments...The sensitivity of the 

results to other aspects of the models (e.g. the carbon cycle or damage function) is also 

important to explore in the context of future revisions to the SCC but has not been 

incorporated into these estimates.

Accordingly, the IWG did not attempt to explain in detail how the damage functions in the 

models were constructed or their strengths and weaknesses, either for the earlier model versions 

used in the 2010 estimates or for the updated versions used for the 2013 estimates. Rather, 

stakeholders who are interested in these details are encouraged to consult the model 

documentation and the related academic literature referenced in the TSDs, as well as the model 

developers themselves. As noted in the OMB Response to Comments on SC-CO2, the IWG 

accepts the point that clearer citations to specific model versions and revisions would be helpful 

and will attempt to address this in the next update of the TSD.

Regarding opportunities for public comment, EPA notes that such opportunities have been 

provided on all aspects of the SCC estimates in the interim estimates (2009) selected by the IWG 
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and in the numerous proposed rules, including the proposal for this rulemaking, issued by EPA 

since February 2010 that made use of the estimates. As a general practice, EPA requests 

comments on all aspects of the regulatory impact analysis, thereby providing ample opportunity

for the public to comment on SC-CO2 estimates used in these analyses. These comments helped 

inform the development of the 2013 revised estimates. In addition, OMB provided a stand-alone 

comment period on the 2013 estimates. 

Regarding the adequacy of the information provided to the public as a basis for comment, the 

TSDs provide a complete record of the methodology and assumptions used to develop the SCC 

estimates, including references to the academic literature. As previously noted, independent 

analysts have sought and received information from EPA allowing them to implement the IWG’s 

SC-CO2 approach and modify it further if they choose. Additional documentation is available in 

the academic literature on the IAMs themselves.

With regard to peer review, the assumptions and models employed in generating the SC-CO2

estimates are all drawn from the peer-reviewed academic literature. According to the OMB Final 

Information Quality Bulletin for Peer Review and guidelines in the EPA's Peer Review 

Handbook, if the Agency has determined that information has already been subject to adequate 

peer review, then it is not necessary to have further peer review of that information. See Part 

II.2 of OMB’s Final Information Quality Bulletin for Peer Review, and EPA’s Peer Review 

Handbook (3rd ed.) pages B-15 and B-26. To further strengthen the robustness of the SCC 

estimate, EPA and the other members of the IWG plan to seek external expert advice on 

technical opportunities to improve the SCC estimates in future updates, including many of the 

approaches suggested by commenters and peer-reviewed literature, and summarized in this 

document.

Regarding comments that the estimates not be used until a future update that corrects the 

commenters’ perceived flaws is completed, EPA does not feel that it is appropriate to withdraw 

the current estimates. As previously noted, EPA has carefully examined and evaluated the full 

range of comments and associated technical issues described in section 8.7.2, and determined 

that it will continue to use the current SC-CO2 estimates until further updates can be made to 

reflect forthcoming guidance from the Academies. EPA believes that the current estimates 

continue to represent the best scientific information on the impacts of climate change available in 

a form appropriate for incorporating the damages from incremental CO2 emissions changes into 

regulatory analysis. EPA will continue to consider these comments and will share the 

recommendations with the IWG as it moves forward with the Academies process.

EPA disagrees that the TSDs and SC-CO2 estimates are inconsistent with OMB and EPA 

guidance, including OMB Circular A-4 and guidelines under the Information Quality Act. To 

ensure that the SC-CO2 methodology is transparent, the TSDs are comprehensive and technically 

rigorous in explaining the sources of data, the assumptions employed, the analytic methods 

applied, and the statistical assumptions employed. To ensure that the results are reproducible, 

EPA and other IWG members have provided technical assistance and modeling results to 

external stakeholders upon request. 

Circular A-4 is a living document, which may be updated as appropriate to reflect new 

developments and unforeseen issues. OMB was fully involved in the development of the SC-CO2
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estimates as a working group co-chair and supports the recommendations regarding the discount 

rate and the focus on global damages. The departure from the standard discount rate 

recommendations in Circular A-4 is explained in detail in the TSDs and in Section 8.7.2, 

comment 7, of this document. Briefly, the use of 7 percent is not considered appropriate for 

intergenerational discounting. There is wide support for this view in the academic literature, and 

it is recognized in Circular A-4 itself. The emphasis on global rather than domestic damages is 

also explained in detail in the TSDs. Beyond the fact that good methodologies for estimating 

domestic damages do not currently exist, basing decisions on only the domestic damages from 

carbon emissions will lead to an inefficient allocation of resources to reducing them, especially if 

all countries adopt a similarly short-sighted approach. An efficient outcome can only be achieved 

if all countries consider the full costs and benefits of their actions; the United States continues to 

be a leader in working to establish such a regime internationally.

In addition, consistent EPA-wide implementation of its peer review and information quality act 

guidelines has been an agency priority for many years. The most recent document describing 

this EPA guidance, Guidance for Evaluating and Documenting the Quality of Existing Scientific 

and Technical Information, was issued in December 2012 as an addendum to a 2003 EPA 

guidance document entitled, A Summary of General Assessment Factors for Evaluating the 

Quality of Scientific and Technical Information. The December 2012 addendum does not create 

new standards for assessing and accepting data from other organizations – the Agency’s existing 

information quality guidance continues to be applied to previous and future actions. Rather, the 

December 2012 addendum references EPA’s comprehensive existing information quality

guidance and creates a consistent Agency-wide approach for reviewing and documenting the use 

of existing scientific and technical information from other organizations. 

The 2010 TSD for the SC-CO2 estimates provides documentation of the interagency decisions 

and the 2013 TSD documents the technical update. Consistent with EPA’s 2003 data quality

guidance document and the December 2012 addendum referenced above, the 2010 and 2013 

TSDs for the SC-CO2 estimates describe the type and quality of information used to estimate the 

social cost of carbon as well as the sources for the information used (documentation of modeling 

inputs—e.g., climate sensitivity and socioeconomic scenarios—in the peer reviewed literature). 

The 2010 and 2013 TSDs also provide exhaustive documentation of how the USG’s review 

identified, evaluated, and adopted the data, assumptions, and analytical framework used to 

develop the SCC estimates. Furthermore, the IAMs used to develop the USG SCC estimates are 

documented within the peer reviewed literature and source code is available on the model 

developers’ websites or upon request from the relevant developer.

Finally, commenters significantly misstate the law regarding both the rights afforded under the 

Data Quality Act and the nature of guidance implementing it. First, Prime Time Int’l Inc. v. 

Vilsack, 599 F.3d 678, 685 (D.C. Cir. 2010) does not stand for the proposition that IQA claims 

are judicially reviewable, contrary to commenters’ assertions. The case makes no such 

statement, and the D.C. Circuit has indicated otherwise by its citation, in State of Mississippi, of 

Salt Institute’s holding that such claims are not reviewable (see text above). See also Mississippi 

Comm’n on Environmental Quality v. EPA, No. 12-1309 at n. 29, 2015 WL 3461262, (D.C. Cir. 

June 2, 2015) noting that Prime Time dismissed an IQA challenge “without addressing argument 

that the statute creates no legal rights in third parties”, and, as quoted above, stated that “almost 

every court that has addressed an Information Quality Act challenge has held that the statute 
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‘creates no legal rights in any third parties’”(quoting Salt Institute)). The commenter also fails to 

acknowledge all of the other cases uniformly rejecting this claim, and indeed, fails to 

acknowledge the text of the IQA itself. See Styrene Info. & Research Ctr., Inc. v. Sebelius, 944 

F. Supp. 2d 71, at 82 (D.D.C. 2013) (concluding “that the IQA and OMB guidelines do not 

provide judicially manageable standards); Harkonen v. U.S. Dept. of Justice, 2012 U.S. Dist. 

LEXIS 171415, at **30–36 (N.D. Cal. 2012) (dismissing argument that D.C. Circuit reached the 

merits of an IQA claim in Prime Time); Family Farm Alliance v. Salazar, 749 F. Supp. 2d 1083, 

1096–1100 (E.D. Cal. 2010) (rejecting argument that D.C. Circuit in Prime Time found an 

implicit right of action under the IQA). 

The commenter also reads Prime Time as holding that the OMB Guidelines are binding 

legislative rules. Guidelines are just that: they provide assistance and are not binding. 

Describing these OMB Guidelines, the D.C. Circuit noted that the Guidelines provide “‘policy

and procedural guidance’”, are meant to be “flexible” and are to be implemented differently by 

different agencies accounting for circumstances. State of Mississippi, 744 F.3d at 1347; see 

Styrene Info. & Research Ctr, Inc., 944 F. Supp. 2d at 82. State of Mississippi antedates Prime 

Time. EPA consequently believes that the OMB Guidelines are not binding legislative rules. 

Nor are EPA’s Peer Review guidelines binding legislative rules. EPA first issued its Peer 

Review Policy in 1993, and in 1998 issued its Peer Review Handbook to provide nonbinding guidance for implementation of the Peer Review Policy. In 2004, OMB issued its 

Final Information Quality Bulletin for Peer Review (OMB Bulletin) to provide governmentwide guidance to enhance the practice of peer review. EPA subsequently updated its Peer 

Review Policy and Peer Review Handbook to incorporate the provisions of the OMB 

Bulletin. EPA’s IQGs, Peer Review Policy, and Peer Review Handbook do not bind the 

Agency, but instead guide EPA’s exercise of discretion when making decisions about 

information quality and peer review. API v. EPA, 684 F. 3d 1342, 1348 (D.C. Cir. 2012) 

(chastising industry petitioners for characterizing the EPA peer review guidance as binding 

(“perhaps the API should have had its brief peer-reviewed”); State of Mississippi v. EPA, 744 

F.3d at 1347 (D.C. Cir. 2013). The suggestion in the comments that EPA’s Inspector 

General has decreed that the Peer Review guidance is binding both mischaracterizes the IG’s 

statements and that Office’s function. It does not determine the legal status of agency

documents, much less countermand the holding of the D.C. Circuit just cited.

Regarding the comment that the IAMs are not available via EPA’s website, EPA notes that the 

CREM is no longer an active body at EPA. In addition to obtaining information via the peerreviewed literature and the SC-CO2 TSDs, the public can instead find information about the 

models in EPA’s Science Inventory database: DICE38, FUND39, and PAGE40)

 

38

http://cfpub.epa.gov/si/si_public_record_report.cfm?dirEntryId=240426&searchAll=DICE&sear

chAll=integrated+assessment&actType=&TIMSType=+&TIMSSubTypeID=&DEID=&epaNum

ber=&ntisID=&archiveStatus=Both&ombCat=Any&dateBeginCreated=&dateEndCreated=&dat

eBeginPublishedPresented=&dateEndPublishedPresented=&dateBeginUpdated=&dateEndUpdat
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Regarding comments on SC-CO2 and BSER: The SC-CO2 was not used, as one commenter 

stated, as a screen to justify the BSER. RIA chapters 3 and 5 present the SC-CO2 and the 

application of these estimates to consider the illustrative benefit and cost scenarios. Please see 

Section V.A of the preamble for discussion about the factors used to determine the Best System 

of Emission Reduction (BSER). 

Carbon dioxide fertilization

Comment 4.4-6: Commenter 9685 states the benefits of CO2 fertilization and improved crop 

resilience are significant and must be reflected in any cost-benefit analysis. Commenter includes 

excerpt from attached documents to support point.

Commenters disagreed about whether the integrated assessment models overestimate or 

underestimate CO2 fertilization effects in the agriculture and forestry sectors. For example, 

commenter 9685 states the benefits of CO2 fertilization and improved crop resilience are 

significant and must be reflected in any cost-benefit analysis and referenced Idso (2013). 

However, commenter 9861 stated that “the models do not reflect recent research on agricultural 

changes, which suggests that CO2 fertilization is overestimated, particularly in the FUND model, 

and that much, if not all, of the fertilization benefits may be cancelled out by negative impacts on 

agriculture.” Commenter 9681 states the current inclusion of CO2 fertilization benefits likely

overstates its effects. The models do not reflect recent research on agricultural changes, which 

suggest the CO2 fertilization is overestimated, particularly in the FUND model, and that much, if 

not all, of the fertilization benefits may be cancelled out by negative impacts on agriculture (e.g., 

extreme heat, pests, and weeds). If the agency is not able to adequately model all agricultural 

impacts it should, at a minimum, remove CO2 fertilization benefits.

Response 4.4-6: The comments regarding CO2 fertilization effects in the agriculture and forestry

sectors and "greening effect" issues mirror those submitted to the Office of Management and 

 

ed=&dateBeginCompleted=&dateEndCompleted=&personID=&role=Any&journalID=&publish

erID=&sortBy=title&count=25&CFID=24359216&CFTOKEN=32090976.

39

http://cfpub.epa.gov/si/si_public_record_report.cfm?dirEntryId=240425&searchAll=FUND&sea

rchAll=integrated+assessment&actType=&TIMSType=+&TIMSSubTypeID=&DEID=&epaNu

mber=&ntisID=&archiveStatus=Both&ombCat=Any&dateBeginCreated=&dateEndCreated=&d

ateBeginPublishedPresented=&dateEndPublishedPresented=&dateBeginUpdated=&dateEndUpd

ated=&dateBeginCompleted=&dateEndCompleted=&personID=&role=Any&journalID=&publi

sherID=&sortBy=title&count=25&CFID=24359216&CFTOKEN=32090976.

40

http://cfpub.epa.gov/si/si_public_record_report.cfm?dirEntryId=240711&searchAll=PAGE09&s

earchAll=integrated+assessment&actType=&TIMSType=+&TIMSSubTypeID=&DEID=&epaN

umber=&ntisID=&archiveStatus=Both&ombCat=Any&dateBeginCreated=&dateEndCreated=&

dateBeginPublishedPresented=&dateEndPublishedPresented=&dateBeginUpdated=&dateEndUp

dated=&dateBeginCompleted=&dateEndCompleted=&personID=&role=Any&journalID=&publ

isherID=&sortBy=title&count=25&CFID=24359216&CFTOKEN=32090976.
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Budget’s separate comment solicitation on the SC-CO2 (78 FR 70586; November 26, 2013). As 

a member of the interagency working group (IWG) on SC-CO2, EPA has carefully examined and 

evaluated comments submitted to OMB’s separate solicitation. EPA has also carefully examined 

and evaluated all comments received regarding SC-CO2 through this rulemaking process and 

determined that the IWG responses to the comments on the OMB solicitation address the CO2

fertilization effects in the agriculture and forestry sectors and "greening effect" issues 

summarized in this section. Specifically, EPA concurs with the IWG’s response to these 

comments and hereby incorporates them by reference.41

After careful evaluation of the full range of comments and associated technical issues described 

in section 8.7.2, EPA has determined that it will continue to use the current SC-CO2 estimates 

until further updates can be made to reflect forthcoming guidance from the Academies. EPA 

believes that the current estimates continue to represent the best scientific information on the 

impacts of climate change available in a form appropriate for incorporating the damages from 

incremental CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the 

current SC-CO2 estimates in the analyses of illustrative costs and benefits in the RIA.

42

 EPA will 

continue to consider these comments and will share the recommendations with the IWG as it 

moves forward with the Academies process. 

The remainder of this section elaborates on the comments in the context of this rulemaking.

As noted in the OMB Response to Comments on SC-CO2, to date, the IWG has accepted the 

models as currently constituted, and omitted any damages or beneficial effects that the model 

developers themselves do not include. The IWG recognizes that none of the three IAMs fully 

incorporates all climate change impacts, either positive or negative. Some of the effects 

referenced by commenters (e.g., "catastrophic" effects, disease, and CO2 fertilization) are 

explicitly modeled in the damage functions of one or more of the current models (although the 

treatment may not be complete), and the model developers continue to update their models as 

new research becomes available. In fact, the IWG undertook the 2013 revision because of 

updates to the models, which include new or enhanced representation of certain impacts, such as 

sea level rise damages. In addition, some of the categories mentioned by commenters are 

currently speculative or cannot be incorporated into the damage function for lack of appropriate 

data. Using an ensemble of three different models was intended to, at least partially, address the 

fact that no single model includes all of the impacts. We recognize that there may be effects that 

none of the three selected models addresses (e.g., impacts from ocean acidification) or that are 

likely not fully captured (e.g. catastrophic effects). 

EPA also recognizes that the impacts of climate change on agriculture is an area of active 

research and that methodological and data challenges persist. As a result there is uncertainty as to 

the magnitude of these impacts and the role of interactions between changes in the climate and 

other factors, such as CO2 fertilization, temperature, precipitation, ozone, pests, etc. 

 

41 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 7-11 at 

https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-finaljuly-2015.pdf .

42 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.
4-93

Additionally, these effects are likely to vary widely across regions and crops. However, with 

high confidence the IPCC (2013) stated in its Fifth Assessment Report (AR5) that "[b]ased on 

many studies covering a wide range of regions and crops, negative impacts of climate change on 

crop yields have been more common than positive impacts." As noted above, the IWG’s 

approach to date has been to rely on the damage functions included in the three IAMs by their 

developers.

EPA agrees that it is important to update the SC-CO2 periodically to incorporate improvements 

in the understanding of greenhouse gas emissions impacts and will continue to follow and 

evaluate the latest science on impact categories that are omitted or not fully addressed in the 

IAMs. Also, EPA and the other members of the IWG will seek external expert advice on the 

technical merits and challenges of potential approaches to update the damage functions in future 

revisions to the SC-CO2 estimates.

See also 4.1-9, for EPA’s response to comments about carbon fertilization, including EPA’s 

general treatment of the impact of increased CO2 on plant growth and about treatment of CO2

fertilization in models.

Discount rate

Comment 4.4-7: Commenter 8925 states constant discount rates are inconsistent with the 

economic growth models being used for this analysis and that discounting should be dynamic 

and a function of the consumption growth rate. 

Commenter 10091 states regarding discount rates that the IWG ignores OMB guidelines in its 

selection of discount rates to use in calculating the SCC. OMB Circular A-4 refers to OMB 

Circular A-94 which states that "a real discount rate of 7 percent should be used as a base-case 

for regulatory analysis" and to show the sensitivity of the results to the discount rate assumptions 

"[f]or regulatory analysis, you should provide estimates of net benefits using both 3 percent and 

7 percent." Instead, the IWG opted to determine the SCC using discount rates of 2.5, 3, and 5 

percent, and did not include results for a 7 percent rate. This has ramifications throughout the 

federal regulatory agencies. For example, in previous Environmental Protection Agency 

discussions of a proposed new rule regulating discharges from steam electric power plants (and 

how the rule may impact emissions from the plants), the EPA included a Table of the annualized 

benefits of the emissions reductions from NOx, SO2, and CO2. Following OMB guidelines on 

how to calculate costs and benefits-the EPA reports its findings using both a 3% and a 7% 

discount rate. Yet as explained in a footnote to the Table (see below), the CO2 benefits are 

calculated using the 3% and the 5% discount rate "because SCC calculations are not available for 

the 7 percent discount rate." The reason they are "not available" is that the IWG ignored the 

OMB guidelines and did not provide the SCC at a 7 percent discount rate for use in regulator 

analyses. Regulatory agencies, like the EPA, have in the past, tried to follow the rules and 

calculate cost and benefits using both the 3 percent and 7 percent discount rates. Yet, when they 

express the benefits of reducing carbon dioxide emissions at the recommended 7 percent rate, 

they are actually going to use a number that is incorrect and inaccurate, and explain in a footnote 

why they are doing so. This is an unacceptable excuse, and is yet another example of why the 

IWG's determination of the SCC is inappropriate for use in federal regulatory analyses. 

Commenter states that in this proposed Rule, the EPA does not investigate the results of using a 

7% discount rate on the comparison of new coal-fired power plants with and without CCS 
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technology in direct violation of OMB guidelines. 

Commenter 9396 states that in violation of the Information Quality Act October 2002 OMB 

Bulletin, the IWG failed to run discount analysis using OMB guidelines, instead choosing to 

inflate estimated benefits by using a lower discount rate for calculations. The IWG has the 

flexibility to run modeling at whatever rate it chooses so long as the models include both 3% and 

7%. The failure to run a 7% analysis has the consequence of skewing the average SCC to a 

higher level than if OMB policy was followed.

Commenter 9681 provides recommendations on further refinements to the SCC. Industry groups 

have argued that the IWG analysis is flawed in its use of consumption discount rates, 

consideration of scientific uncertainty, and in counting both domestic and global damages caused 

by our emissions. None of these criticisms have merit. Indeed, the IWG process uses 

assumptions that accord with economic and scientific theory. Economic models, and the 

scientific analyses they draw from, are of course improving continuously. Future updates to the 

SCC should build on these and go further. As further refinements better account for climate 

change impacts not yet incorporated into the modeling, all indications are that the estimated 

benefits of curbing carbon pollution will rise substantially over current estimates. 

Commenter 9681 continues the IWG appropriately used consumption discount rates rather than 

returns on capital. With respect to the discount rate, the IWG conducted sensitivity analysis of 

the results to three constant consumption discount rates: 2.5%, 3%, and 5%; for each of the 

discount rates, the TSDs reported the various moments and percentiles64 (The moments of a 

distribution (of SCC estimates in this case) are, loosely speaking, the various values that describe 

the distribution's shape: what value is the distribution centered around (mean); how wide is the 

distribution (the variance); whether the distribution is lopsided (skewness); and whether it is tall 

and skinny or short and fat (kurtosis). A percentile is a statistical measure of the value (the SCC 

value in this case) below which a specified percentage of (SCC) observations falls. The 1st 

percentile indicates the SCC value above which (the other) 99% of observed SCC values fall. 

The 99th percentile indicates the SCC value below which 99% of all observed SCC values fall. ) 

of the SCC estimates. The discount rate is one of the most important inputs in models of climate 

damages, with plausible assumptions easily leading to differences of an order of magnitude in 

the SCC. The climate impacts of present emissions will unfold over hundreds of years. When 

used over very long periods of time, discounting penalizes future generations heavily due to 

compounding effects. For example, at a rate of 1%, $1 million 300 years hence equals over 

$50,000 today; at 5% it equals less than 50 cents. The discount rate changed by a factor of five, 

whereas the discounted value changed by more than five orders of magnitude. Depending on the 

link between climate risk and economic growth risk, even a rate of 1% may be too high. 

Uncertainty around the correct discount rate pushes the rate lower still. The IWG correctly 

excluded a 7% discount rate, a typical private sector rate of return on capital, for several reasons. 

First, typical financial decisions, such as how much to save in a bank account or invest in stocks, 

focus on private decisions and utilize private rates of return. Private market participants typically

have short time horizons. However, here we are concerned with social discount rates because 

emissions mitigation is a public good, where individual emissions choices affect public wellbeing broadly. Rather than evaluating an optimal outcome from the narrow perspective of 

investors alone, economic theory would require that we make the optimal choices based on 

societal preferences (and discount rates). Second, climate change is expected to affect primarily 
4-95

consumption, not traditional capital investments. OMB guidelines note that in this circumstance, 

consumption discount rates are appropriate. Third, 7% is considered much too high for reasons 

of discount rate uncertainty and intergenerational concerns (further discussed below).

Commenter 9681 also states that the IWG correctly adopted as one of its discount rates a value 

reflecting long-term interest rate uncertainty, and-as a primary extension to current results should 

go further by directly implementing a declining discount rate. The IWG was correct in choosing 

as one of its discount rates an estimate based upon declining discount rates (2.5%). Since the 

IWG undertook its initial analysis, a consensus has emerged among leading climate economists 

that a declining discount rate should be used for climate damages to reflect long-term uncertainty

in interest rates. Arrow et al (2013) presents several arguments that strongly support the use of 

declining discount rates for long-term benefit-cost analysis. Perhaps the best reason is the simple 

fact that there is considerable uncertainty around which interest rate to use: uncertainty in the 

rate points directly to the need to use a declining rate, as the impact of the uncertainty grows 

exponentially over time. The uncertainty about future discount rates could stem from a number 

of reasons particularly salient to climate damages, including uncertainties in future economic 

growth, consumption, and the interest rate reaped by investments. A possible declining interest 

rate schedule for consideration by the IWG is the one proposed by Weitzman (2001). It is 

derived from a broad survey of top economists and the profession at large in a climate change 

context and explicitly incorporates arguments around interest rate uncertainty. Cropper et al 

(forthcoming) similarly argues for a declining interest rate schedule and lays out the fundamental 

logic. Moreover, the United States would not be alone in using a declining discount rate. It is 

standard practice for the United Kingdom and French governments, among others. The U.K. 

declining discount rate schedule that subtracts out a time preference value. France's schedule is 

roughly similar to the United Kingdom's. Importantly, all of these discount rate schedules yield 

lower present values than the constant 2.5% Newell-Pizer rate, suggesting that even the lowest 

discount rate evaluated by the IWG is too high. The consensus of leading economists is that a 

declining discount rate schedule should be used, consistent with the approach of other countries 

like the United Kingdom. Adopting such a schedule would increase the SCC substantially from 

the administration's central estimate, suggesting that even the high end of the range presented by

the administration is likely too low.

Commenters 9194, 7977 states the IWG/OMB process is flawed in that it fails to calculate the 

SCC using OMB's prescribed "base case" discount rate of 7% and impermissibly calculates 

global benefits instead of domestic benefits.

Commenter 9423 states a key variable in estimating the SCC is the discount rate. OMB Circular 

A-94 states that a discount rate of 7 percent should be used as a base case for regulatory analysis 

as a default position while acknowledging that in some cases, other discount rates may be 

appropriate. OMB Circular A-4 states that "For regulatory analysis, one should provide estimates 

of net benefits using both 3 percent and 7 percent." The impact of the use of different discount 

rates can be significant. In the revised Technical Support Document, the social cost of carbon for 

2050 is $97/metric ton of C02 using a 2.5 percent discount factor while it is $26/metric ton of 

C02 using a 5 percent discount factor. EPA should include an analysis using a discount rate of 7 

percent, as suggested by OMB. 

Response 4.4-7: The comments regarding discount rates applied to the SC-CO2 estimates mirror 

those submitted to the Office of Management and Budget’s separate comment solicitation on the 
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SCC (78 FR 70586; November 26, 2013). As a member of the interagency working group 

(IWG) on SC-CO2, EPA has carefully examined and evaluated comments submitted to OMB’s 

separate solicitation. EPA has also carefully examined and evaluated all comments received 

regarding SC-CO2 through this rulemaking process and determined that the IWG responses to 

the comments on the OMB solicitation address the comments on the discount rates applied to the 

SC-CO2 estimates. Specifically, EPA concurs with the IWG’s response to these comments and 

hereby incorporates them by reference.43 The remainder of this section elaborates on these 

comments in the context of this rulemaking. 

EPA and other members of the IWG have reconfirmed their commitment to periodic review and 

update of the methodology and estimates to ensure that they continue to reflect the best available 

science and economics. Furthermore, EPA has determined that the SC-CO2 methodological 

recommendations require additional research, review, and public comment before it can apply 

them to a rulemaking context. 

To help synthesize the technical information and input reflected in the comments, and to add 

additional rigor to the next update of the SC-CO2, the EPA and all of the other IWG members 

plan to seek independent expert advice on technical opportunities to improve the SC-CO2

estimates, including the approaches suggested by commenters and summarized in this document. 

Specifically, EPA and all of the other IWG members plan to ask the National Academies of 

Sciences, Engineering, and Medicine (Academies) to examine the technical merits and 

challenges of potential approaches to improving the SC-CO2 estimates in future updates. Input 

from the Academies, informed by the comments submitted to this rulemaking and the peerreviewed literature, will help to ensure that the SC-CO2 estimates used by EPA continue to 

reflect the best available science and methodologies.

After careful evaluation of the full range of comments and associated technical issues described 

in section 4.4, EPA has determined that it will continue to use the current SC-CO2 estimates until 

further updates can be made to reflect forthcoming guidance from the Academies. EPA believes 

that the current estimates continue to represent the best scientific information on the impacts of 

climate change available in a form appropriate for incorporating the damages from incremental 

CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the current SCCO2 estimates in the analysis of illustrative benefit-cost scenarios for new sources in RIA 

Chapter 5.44 EPA will continue to consider these comments and will share the recommendations 

with the IWG as it moves forward with the Academies process.

The remainder of this section provides more detailed responses to the comments and 

recommendations. 

 

43 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 20 to 25 

at https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-comments-finaljuly-2015.pdf

44 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.
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OMB guidance in Circular A-4 recommends that discount rates of 3 percent and 7 percent be 

used in regulatory impact analysis. The 7 percent rate is an estimate of the average before-tax 

real rate of return to private capital in the U.S. economy. It is a broad measure that reflects the 

returns to real estate and small business and corporate capital and is meant to approximate the 

opportunity cost of capital in the United States. The 3 percent rate is an estimate of the real rate 

at which consumers discount future consumption flows to their present value, often referred to as 

the social rate of time preference or the consumption rate of interest. As stated in the 2010 TSD, 

in a market with no distortions, the return to savings would equal the private return on 

investment, and the market rate of interest would be the appropriate choice for the social 

discount rate. In the real world, however, risk, taxes, and other market imperfections drive a 

wedge between the risk-free rate of return on capital and the consumption rate of interest. 

While most regulatory impact analysis is conducted over a time frame in the range of 20 to 50 

years, OMB guidance in Circular A-4 recognizes that special ethical considerations arise when 

comparing benefits and costs across generations. Although most people demonstrate time 

preference in their own consumption behavior, it may not be appropriate for society to 

demonstrate a similar preference when deciding between the well-being of current and future 

generations. Future citizens who are affected by such choices cannot take part in making them, 

and today's society must act with some consideration of their interest. Even in an 

intergenerational context, however, it would still be correct to discount future costs and benefits 

generally (though perhaps at a lower rate than for intragenerational analysis), due to the 

expectation that future generations will be wealthier and thus will value a marginal dollar of 

benefits or costs less than the current generation. Therefore, it is appropriate to discount future 

benefits and costs relative to current benefits and costs, even if the welfare of future generations 

is not being discounted. Estimates of the discount rate appropriate in this case, from the 1990s, 

ranged from 1 to 3 percent. After reviewing those considerations, Circular A-4 states that if a 

rule will have important intergenerational benefits or costs, agencies should consider a further 

sensitivity analysis using a lower but positive discount rate in addition to calculating net benefits 

using discount rates of 3 and 7 percent.

EPA and the other members of the IWG examined the economics literature and concluded that 

the consumption rate of interest is the correct concept to use in evaluating the net social costs of 

a marginal change in CO2 emissions, as the impacts of climate change are measured in 

consumption-equivalent units in the three IAMs used to estimate the SC-CO2. This is consistent 

with OMB’s guidance in Circular A-4, which states that when a regulation is expected to 

primarily affect private consumption—for instance, via higher prices for goods and services--it is 

appropriate to use the consumption rate of interest to reflect how private individuals trade-off 

current and future consumption.

As explained in the 2010 TSD, after a thorough review of the discounting literature, the IWG 

chose to use three discount rates to span a plausible range of constant discount rates: 2.5, 3, and 5 

percent per year. The central value, 3 percent, is consistent with estimates provided in the 

economics literature and OMB’s Circular A-4 guidance for the consumption rate of interest. The 

upper value of 5 percent represents the possibility that climate damages are positively correlated 

with market returns, which would suggest a rate higher than the risk-free rate of 3 percent. 

Additionally, this discount rate may be justified by the high interest rates that many consumers 
4-98

use to smooth consumption across periods. The low value, 2.5 percent, is included to incorporate 

the concern that interest rates are highly uncertain over time. It represents the average rate after 

adjusting for uncertainty using a mean-reverting and random walk approach as described in 

Newell and Pizer (2003), starting at a discount rate of 3 percent. Further, a rate below the riskless 

rate would be justified if climate investments are negatively correlated with the overall market 

rate of return. Use of this lower value also responds to the ethical concerns discussed above 

regarding intergenerational discounting. 

EPA recognizes that disagreement remains in the academic literature over the appropriate 

discount rate to use for regulatory analysis of actions with significant intergenerational impacts, 

such as CO2 emissions changes that affect the global climate on long time scales. EPA and the 

other members of the IWG will continue to follow and evaluate the latest science on 

intergenerational discounting and seek external expert advice on issues related to discounting in 

the context of climate change.

Regarding recommendations for lower discount rates or a declining rate: As noted above, the 

EPA and the other members of the IWG selected a range of discount rates from 2.5 to 5 percent; 

a review of the literature and the reasoning that led to the selection of this range are discussed in 

detail in the 2010 TSD. Several of the issues raised by commenters were explicitly considered 

and were part of the rationale for the selected range. 

The 2010 TSD discusses both descriptive and prescriptive approaches to selecting discount rates. 

A descriptive approach reflects a positive (non-normative) perspective based on observations of 

people’s actual choices (e.g., savings versus consumption and allocation of savings over more 

and less risky investments). The prescriptive approach adds a normative component and 

incorporates judgments that decision makers believe should be reflected in the policy choices 

that the discount rate is intended to inform. For example, some have argued on ethical grounds 

that in the Ramsey formula—which dissects market rates into three components, the pure rate of 

time preference (ρ), growth rate of per-capita consumption (g), and coefficient of relative risk 

aversion (η)—the ρ component should be set to zero so that the welfare of all generations is 

valued equally. After considering a range of plausible values from the literature for g and η, the 

IWG concluded that setting a very low ρ (e.g., 0.1 percent per year) could yield rates in the range 

of 1.4 to 3.1 percent. 

The 2010 TSD also discussed uncertainty and its effects on discount rates. The certainty 

equivalent values of the future benefits of reducing current CO2 emissions will be lower than the 

expected value if the benefits and future consumption are positively correlated, assuming people 

are risk averse on average. This in turn implies that when discounting expected future benefits a 

discount rate that accounts for uncertainty should exceed a riskless rate. As explained in the 

TSD, this consideration was part of the logic for setting the upper end of the selected range at 5 

percent.

EPA and other members of the IWG also considered the issue of “climate catastrophes.” To the 

extent that such outcomes may not be adequately represented in the IAMs, the central tendency

estimates from these models may not capture the full range of potential damages from CO2

emissions. For this reason, in addition to the three mean SC-CO2 estimates using discount rates 
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of 2.5, 3 and 5 percent, EPA and other members of the IWG recommended including a rate based 

on the 95th percentile damage estimate (with a 3 percent discount rate) for the upper end of the 

range of plausible SC-CO2 estimates. 

With respect to declining discount rates, EPA and other members of the IWG agrees that this is 

an important area of emerging research. However, no widely-accepted declining discount rate 

schedule has yet been developed. Some key technical issues warrant careful consideration before 

adopting a declining discount rate schedule, such as determining how to update the discount rate 

schedule as uncertainty is resolved over time and ensuring that the use of declining discount rates 

does not lead to the possibility of time-inconsistent choices. A recent workshop sponsored by the 

federal government resulted in a paper in Science authored by thirteen prominent economists 

who concluded that a declining discount rate would be appropriate to analyze impacts that occur 

far into the future (Arrow et al., 2014). However, additional research and analysis is still needed 

to develop a methodology for implementing a declining discount rate and to understand the 

implications of applying these theoretical lessons in practice. The EPA and other members of the 

IWG will continue to follow and evaluate the latest science on the use of declining discount rates 

in intergenerational contexts and seek external expert advice on issues related to discounting in 

the context of climate change.

Finally, regarding the comment about the consistency of discount rates applied to the climate 

benefits versus other monetized impacts: while EPA continues to find the discount rates applied 

to the SC-CO2 estimates to be appropriate, it recognizes that different discount rates are applied 

to other impacts. The workshop mentioned in the preceding paragraph discussed how to apply

discounting in a regulation where some costs and benefits accrue intra-generationally while 

others accrue inter-generationally. The experts noted that one solution to this problem is to apply

a declining discount rate schedule to all regulations. As previously noted, additional research 

and analysis is needed to develop a methodology for implementing a declining discount rate. 

The EPA and other members of the IWG will continue to follow and evaluate the latest science 

on the use of declining discount rates in intergenerational contexts and seek external expert 

advice on issues related to discounting in the context of climate change.

Application and aggregation 

Comment 4.4-8: Commenter 9666 states EPA should update its modeling to include the most 

recent SC-CO2 estimates, noting that EPA has not updated its modeling since the rule was first 

proposed in 2012 and that OMB's current SCC estimates were updated twice in 

2013. Commenter 9666 states EPA should refrain from utilizing SCC values until OMB has 

finalized its rule on the use of SCC among federal agencies.

Commenter 9423 states EPA should not use the Office of Management and Budget's (OMB) 

Revised Social Cost of Carbon Estimates in the Cost/Benefit Analysis. In Section 5.7 of the RIA, 

EPA uses the OMB's revised estimates for the Social Cost of Carbon (SCC) in estimating the 

cost and benefits of the subject regulatory proposal for new electric generating units. The TCEQ 

provided comments to 0MB regarding their Technical Support Document: Technical Update of 

the Social Cost of Carbon (SCC) for Regulatory Impact Analysis under Executive 0rder No. 

12866 published in the Federal Register on November 26, 2013. Given that OMB has requested 

comments on the SCC estimates, TCEQ, PUC, and RRC believe it is inappropriate for EPA to 
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use the revised estimates in the 111(b) rulemaking as it deprives stakeholders the opportunity to 

comment on the final version of the OMB guidance. Notwithstanding TCEQ's objection to the

use of the OMB guidance in the 111(b) rulemaking, TCEQ, PUC, and RRC offer the following 

further comments on EPA's use of the SCC estimates in the RIA. The assumptions, both 

scientific and economic, of the Interagency Working Group that developed the initial SCC 

estimates are largely unknown and were not subject to independent peer review as called for by 

the Information Quality Act and 0MB's own internal guidelines. The TCEQ, PUC, and RRC 

strongly recommend that the SCC estimates not be used in the 111(b) rulemaking until the entire 

process and data used in developing the SCC estimates are subjected to thorough, independent, 

external peer review. The models used to derive SCC estimates suffer from considerable 

uncertainty and speculation in critical inputs including the amount of future carbon emissions, 

the impact of those emissions on the climate, and the monetization of those impacts. The 

uncertainty associated with temperature increases is just one example. The models used by the 

United Nations Intergovernmental Panel on Climate Change (IPCC) have not predicted the 

current stoppage of global warming, as evidenced by global temperature measurements, over the 

last 15 years. To the extent that IPCC model data was used in developing the SCC estimates, 

their use for the short term is clearly circumspect and extrapolation of temperature increases and 

its impacts over a longer modeling time horizon is of even greater uncertainty.

Commenter 10618 states EPA uses the Social Cost of Carbon (SCC) to characterize potential 

carbon benefits associated with the rule, with even though it is widely acknowledged that these 

cost estimates are inaccurate, uncertain, and highly speculative.45 EPA acknowledges in the RIA 

that "any effort to quantify and monetize the harms associated with climate change will raise 

serious questions of science, economics, and ethics and should be viewed as provisional." As 

such, these calculations cannot form the basis of an adequate RIA. AEP has submitted comments 

on the SCC in its development and use and they are attached as Appendix F to this document. 

Commenter 9194 questions the appropriateness of using the IWG estimates of the SCC for 

regulatory purposes whether for justifying BSER for CO2 for coal plants under this rulemaking 

or in any other EGU rulemaking that will serve as a predicate for economy-wide CO2 regulations 

in the future. 

Commenter 9194 continues that EPA should not use the social cost of carbon (SCC) in this or 

any other rulemaking affecting electric generating units until the IWG process headed by the 

OMB has been subjected to public notice and comment and until the models, all assumptions 

used in the models, all underlying data used and all analyses used by OMB and the IWG have 

undergone peer review and public notice and comment.

Commenter 10091 states the social cost of carbon as determined by the Interagency Working 

Group in their May 2013 Technical Support Document (updated in November 2013) and used by

the EPA in this proposed Standards of Performance for Greenhouse Gas Emissions from New 

Stationary Sources: Electric Utility Generating Units is unsupported by the scientific literature, 

not in accordance with OMB guidelines, fraught with uncertainty, illogical and thus completely 

 

45 See RIA 5-36 through 5-39.
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unsuitable and inappropriate for federal rulemaking. As such, use of the SCC in cost/benefit 

analyses in this proposed rulemaking should be suspended.

Commenter 9396 states the use of the IWG SCC Can Produce Irrational Energy Choices: The 

SCC as produced by the IAMs could also produce some irrational conclusions in selecting the 

most cost-effective sources for electric energy production. As seen in the table below, by using 

SCC values that could be developed well within the input assumptions of the IAM developers, it 

is possible to select base load generating choices that many in the industry would consider 

absurd. The values developed in the table above assume that lower carbon energy will replace 

existing coal-fired generation. By using the IWG central value SCC, all generating alternatives 

are more cost-effective than coal-fired generation with wind energy and biomass being more 

cost-effective than an NGCC unit. By using the SCC high value, which is lower than one of the 

PAGE model developer recommends, wind, biomass and solar photovoltaic energy are cheaper 

than an NGCC base load unit.46 Based on the SCC, one could easily conclude that it would be 

very economical to shut-down all fossil fuel electric generation and replace it with zero carbon 

generating sources. This conclusion would be considered absurd by most experts in the electric 

utility industry; especially since base load solar and wind powered generating plants are not yet 

commercially available. 

Commenter 9401 states EPA has not performed an analysis of carbon leakage which will occur 

as a result of the rule, thus overstating the benefits. Because manufacturing uses 25 percent of all 

U.S. electricity, we are significantly impacted by electricity prices. Figure 1 illustrates that coal 

consistently provides the lowest cost energy to generate electricity. The rule would stop the use 

of coal for use in new power generating units and deprive manufacturing from the lowest cost 

power generation, thereby impacting competitiveness. It is important to note, that having coal as 

a major component of electricity fuel diversity provides for increased reliability. Higher 

electricity costs and reduced reliability will shift EITE industries to other countries along with 

their jobs and GHG emissions, and accomplish nothing. The EPA must perform an analysis of 

carbon leakage that will occur as a result of the rule. Not having done so, the EPA has overstated 

the projected benefits of emission reductions and not accounted for the associated loss of 

economic activity and jobs moving outside the U.S. Without including the GHG leakage, any 

benefits are arbitrary and capricious. And, since most countries have higher power generation 

GHG rates, it would result in a net increase in global GHG emissions. 

Commenter 9396 Averaging Model Results: The IWG provides an estimated benefit that fails to 

capture model uncertainty. For example, a $43/ton average benefit in 2020 is ascribed to model 

outcomes that range from $-22/ton (i.e. $22 in societal cost) to $727 in benefits. The variability

associated with model run outcomes is sufficiently significant that an informed analytical 

evaluation would conclude that determining a single number for the purpose of developing 

regulations is unwarranted and imprudent.

Commenter 9681 states EPA should continue to use the current IWG estimate of the SCC. The 

current SCC estimates are biased downwards: more can and should be done to improve the SCC 

 

46 The Social Cost of Carbon in US Regulatory Impact Analysis: an Introduction and Critique, 

Johnson and Hope Journal of Environmental Studies and Science, September 12, 2012.
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and to ensure, through regular updates, that it reflects the latest science and economics. But the 

necessary process of improving the ability of the SCC to fully reflect the costs of climate impacts 

to society cannot hold up agency rulemaking efforts. The SCC provides an important, if 

conservative, estimate of the costs of climate change and the benefits of reducing carbon 

pollution. To ignore these costs would be detrimental to the health and well-being of Americans 

and contrary to law and Presidential directives to agencies to evaluate the cost of pollution to 

society when considering standards to abate that pollution. In the context of agency rulemakings, 

the SCC provides the best available means to factor those costs into benefit-cost analyses. 

Commenter also suggest that EPA encourage the IWG to continuously update the SCC, as new 

economic and scientific consensus emerges. Such updates are in line with the stated intentions of 

the IWG, which committed to updating these estimates as the science and economic 

understanding of climate change . . . improves. Accordingly, EPA should continue to use the 

IWG's latest SCC estimates in its regulatory impact analyses on greenhouse gas performance 

standards under Section 111 of the Clean Air Act.

Commenter 9514 states EPA properly relied on the federal government's most recent estimate of 

the social cost of carbon and that the agency's analysis comported with the standard guidance for 

regulatory analysis of costs and benefits. 

Commenter 9592 states that EPA's discussion of SCC in the RIA, as well as the sample 

calculations in the supporting technical document, "Technical Support Document: Social Cost of 

Carbon for Regulatory Impact Analysis, Executive Order 12866, Interagency Working Group on 

Social Cost of Carbon, United States Government" provide a pathway for future economic 

analyses that can justify the use of natural gas as a future existing source GHG standard of 

performance.

Commenter 8925 states the 2010 USG SCCs are problematic for evaluating non-incremental 

changes in global emissions and, if applied, could result in misleading conclusions; that 

substantial management of future climate does not have a fixed future; and that good practice 

application guidance is needed to avoid misuse.

Commenter 9396 also states the IWG's initial finding that the SCC was a useful tool in assessing 

costs associated with incremental benefits or costs that are derived from federal actions is 

underscored when it goes on to highlight the concern about rules which have a primary purpose 

of reducing GHG emissions stating, "For policies that have a large (non-marginal) impact on 

global cumulative emissions, there is a separate question of whether the SCC is an appropriate 

tool for calculating the benefits of reduced emissions." Despite the admonition that the level of 

uncertainty associated with the development of the SCC reduced its relevance as a policymaking 

tool for the purposes of establishing cost-benefit analysis where GHG reductions present the 

predominant benefit, EPA is proceeding with regulatory actions that base significant regulatory

burdens on industry based on GHG reductions calculated using the SCC. EPA and other federal 

agencies use the social cost of carbon (SCC) to estimate the climate benefits of rulemakings the 

projected net present value of carbon dioxide mitigation benefits over the next forty years from 

three vehicle rulemakings was estimated to range from $78 billion to $1.2 trillion ($2010), 

depending on which of the four SCC estimates were used (i.e., the average SCC at 5, 3, and 2.5 

percent and the 95th percentile SCC at 3 percent). Finding $1.2 trillion dollars of benefits 

derived from application of the SCC meaningfully and substantially deviates from the warning 
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by the IWG that application of the SCC may be inappropriate in circumstances where the 

benefits from the SCC are large to the extent that reductions of GHG are justified by the SCC 

benefits. The policy questions regarding decisions made by the IWG, such as choices concerning 

discount rates or measuring domestic regulation against global benefits and the application of the 

SCC have never been resolved or discussed in a public forum by the federal government but 

rages in the scientific and legal community. The best case for cost-benefit analysis is that the 

2010 IWG recommendations are politically neutral in the sense of drawing on widely shared 

intuitions about human well-being. But cost-benefit analysis cannot cope with inherently

political questions involving contested normative issues. Policymakers will have to find 

alternative tools when those questions predominate. The SCC reflects arbitrarily chosen damage 

functions or, more precisely, the average of several arbitrarily chosen damage functions. It 

emerges from three climate models of questionable reliability. Guesswork is not always fatal to 

cost-benefit analysis. Judgment is needed to distinguish between reasonable estimates and 

estimates that are excessively wide of the mark. Our judgment is that the IWG report relies on 

too many unwarranted assumptions and cannot be relied on. But technical problems can be 

repaired through further research. Computer models of climate change are improving and will 

eventually provide reasonable estimates of the SCC. The more serious problem for cost-benefit 

analysis of climate change is that climate regulation requires a series of judgments that are 

political and institutional rather than technical.

Commenter 10091 states the social cost of carbon as determined by the Interagency Working 

Group in their May 2013 Technical Support Document (updated in November 2013) and 

included in the Regulatory Impact Analysis of this EPA action is unsupported by the scientific 

literature, not in accordance with OMB guidelines, fraught with uncertainty, and thus unsuitable 

and inappropriate for federal rulemaking. As such, use of the SCC in cost/benefit analyses in this 

and all proposed federal regulation should be suspended. 

Commenter 10087 states that SCC is an arbitrary metric that should not be used for regulatory

impact analysis, citing references.

Response 4.4-8: The comments regarding the aggregation of the SC-CO2 estimates and general 

application in a rulemaking context mirror those submitted to the Office of Management and 

Budget’s separate comment solicitation on the SC-CO2 (78 FR 70586; November 26, 2013). As 

a member of the interagency working group (IWG) on SC-CO2, EPA has carefully examined and 

evaluated comments submitted to OMB’s separate solicitation. EPA has also carefully examined 

and evaluated all comments received regarding SC-CO2 through this rulemaking process and 

determined that the IWG responses to the comments on the OMB solicitation address the 

comments on the aggregation of SC-CO2 estimates and use of the estimates in this RIA. 

Specifically, EPA concurs with the IWG’s response to these comments and hereby incorporates 

them by reference.47 The remainder of this section elaborates on these comments in the context 

of this rulemaking. 

 

47 Referred to as the "OMB Response to Comments on SC-CO2." In particular, see pgs 25 to 28, 

40-41 at https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-response-to-commentsfinal-july-2015.pdf.
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EPA and other members of the IWG have reconfirmed their commitment to periodic review and 

update of the methodology and estimates to ensure that they continue to reflect the best available 

science and economics. Furthermore, EPA has determined that the SC-CO2 methodological 

recommendations require additional research, review, and public comment before it can apply 

them to a rulemaking context. 

To help synthesize the technical information and input reflected in the comments, and to add 

additional rigor to the next update of the SC-CO2, the EPA and all of the other IWG members 

plan to seek independent expert advice on technical opportunities to improve the SC-CO2

estimates, including the approaches suggested by commenters and summarized in this document. 

Specifically, EPA and all of the other IWG members plan to ask the National Academies of 

Sciences, Engineering, and Medicine (Academies) to examine the technical merits and 

challenges of potential approaches to improving the SC-CO2 estimates in future updates. Input 

from the Academies, informed by the comments submitted to this rulemaking and the peerreviewed literature, will help to ensure that the SC-CO2 estimates used by EPA continue to 

reflect the best available science and methodologies.

After careful evaluation of the full range of comments and associated technical issues described 

in section 4.5, EPA has determined that it will continue to use the current SC-CO2 estimates until 

further updates can be made to reflect forthcoming guidance from the Academies. EPA believes 

that the current estimates continue to represent the best scientific information on the impacts of 

climate change available in a form appropriate for incorporating the damages from incremental 

CO2 emissions changes into regulatory analysis. Therefore, EPA has presented the current SCCO2 estimates48 in the analysis of illustrative benefit-cost scenarios for new sources in RIA 

Chapter 5 (see RIA Chapters 3 and 5; see Response to Comments 3.2 for detailed discussion 

about the conclusions of the RIA). EPA will continue to consider these comments and will 

share the recommendations with the IWG as it moves forward with the Academies process.

The remainder of this section provides more detailed responses to the comments and 

recommendations. 

Aggregation and selection of SC-CO2 estimates

Some comments discussed the aggregation of model results and the selection of the final range 

of SC-CO2 estimates. Both the 2010 TSD and the current TSD present information about the full 

distribution of SC-CO2 estimates within and across possible combinations of the three models 

and five socioeconomic-emissions scenarios, for each of three discount rates (45 combinations in 

total) (see tables A2-A4 in Appendix A of the TSDs). Additional summary statistics for the 

distributions of the SC-CO2 estimates are also provided for each of the three models (see Table 

A5 in Appendix A). EPA believes that the information presented in the TSDs is sufficiently 

disaggregated to reflect the variability of the SC-CO2 estimates across models, input 

assumptions, and discount rates. In addition, EPA has provided the full set of Monte Carlo 

modeling results (10,000 model runs for each combination, for a total of 450,000 observations 

per emissions year) to outside researchers upon request and will continue to do so.

 

48 See https://www.whitehouse.gov/sites/default/files/omb/inforeg/scc-tsd-final-july-2015.pdf.
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As discussed in the 2010 TSD, using the full distribution of the SC-CO2 estimates from the 45 

scenarios would be impractical in a regulatory impact analysis. To produce a range of plausible 

estimates that still reflects the uncertainty about the SCC estimates, the results from the various 

model and scenario combinations (150,000 observations per emissions year for each of the three 

discount rates) were pooled to produce three separate probability distributions for the SC-CO2

for emissions in a given year, one for each assumed discount rate (2.5, 3 and 5 percent). Three 

point estimates were then derived from these pooled distributions representing the mean at each 

discount rate. EPA considers this approach for presenting expected SC-CO2 values across a 

range of discount rates to be appropriate for representing the central tendency of the SC-CO2

estimates across scenarios. The fourth value, the 95th percentile of the pooled distribution using 

a 3 percent discount rate, is included to represent higher-than-expected economic impacts from 

climate change further out in the tail of the SC-CO2 distribution - i.e., impacts that may have 

lower probability of occurring but relatively high damages. For purposes of representing the 

uncertainties involved, the TSDs emphasized the importance of considering and presenting the 

full range of these four estimates in regulatory impact analysis.

EPA agrees that the modeling of uncertainty in our analysis, including the uncertainty explicitly

represented in the IAMs, may not capture the full range of uncertainty of the “true” value of the 

SCC. This concern is common to most quantitative assessments of uncertainty. By definition, the 

modeling of uncertainty requires a model, and therefore cannot capture the uncertainty 

associated with model selection. However, EPA does not agree that pooling results across 

models implies that the estimates capture the full range of uncertainty, nor is such a claim made 

in the TSDs or the rulemaking’s supporting documents. Rather, EPA attempted to capture a 

reasonable range of uncertainty using information available in the peer-reviewed literature and 

the uncertainty analysis built into the models themselves. Using three models rather than one 

helps address, but does not eliminate, uncertainty associated with model choice. 

Along with the four selected SC-CO2 estimates for each emissions year, the IWG presented more 

detailed information about the full distribution of SC-CO2 estimates for emissions in the year 

2020. Specifically, the 2013 TSD reports information on the full distribution of the SCC 

estimates for emissions in year 2020 for each model, scenario, and discount rate combination , 

including the low-end percentiles (i.e., 1st, 5th and 10th percentiles). In addition, as noted 

above, complete distributions for all emissions years are available upon request. While the IWG 

did not present a summary 5th percentile estimate (i.e., pooling results across the models and 

scenarios) for use in regulatory impact analysis, for reasons discussed below, the model and 

scenario specific statistics for 2020 provide a general sense of how the 5th percentile relates to 

the mean. Furthermore, as we note above EPA has provided the full set of Monte Carlo modeling 

results to outside researchers upon request and will continue to do so. This information may be 

used to calculate a full set of 5th percentile summary statistics that are comparable to the 95th 

percentile estimates provided in the TSDs.

As the 2010 TSD discusses, the SC-CO2 estimates derived from the three integrated assessment 

models have several significant limitations that could lead to a substantial underestimation of the 

SC-CO2. These limitations include the incomplete treatment and monetization of noncatastrophic damages, the incomplete treatment of potential “catastrophic” damages, and 

uncertainty in extrapolation of damages to high temperatures. The IPCC Fourth Assessment 

Report, which was the most current IPCC assessment available at the time of the IWG’s 2009-
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2010 review, discussed these limitations and concluded that it was “very likely that [SCC] 

underestimates” climate change damages. Based on the current scientific understanding of 

climate change and its impacts, and on the limitations of the IAMs in quantifying and monetizing 

the full array of potential “catastrophic” and non-catastrophic damages, EPA and the other 

members of the IWG concluded that the distribution of SCC estimates may be biased 

downwards. Since then, the peer-reviewed literature has continued to support this conclusion. 

For example, the IPCC Fifth Assessment report observed that SCC estimates continue to omit 

various impacts that would likely increase damages. The 95th percentile estimate was included in 

the recommended range for regulatory impact analysis to address these concerns.

In addition, as acknowledged in the 2010 TSD, the SC-CO2 estimates derived from the three 

IAMs did not take into consideration the possibility of risk aversion. That is, individuals may

have a higher willingness-to-pay to reduce the likelihood of low-probability, high-impact 

damages than they do to reduce the likelihood of higher-probability, lower-impact damages with 

the same expected cost. The inclusion of the 95th percentile estimate in the SC-CO2 values was 

also motivated by this concern. In contrast, EPA is not aware of systematic upward biases in the 

estimates comparable to the downward biases discussed above. For this reason, while EPA and 

other members of the IWG have been fully transparent regarding the entire range of uncertainty 

reflected in the probability distributions, EPA did not include a 5th percentile estimate in the 

selected range for regulatory impact analysis.

The choice of the mean or the median as a measure of central tendency depends on the context. 

In skewed distributions, such as for the SC-CO2 estimates, the median will often give a more 

“typical” outcome, while the mean will give full weight to the tails of the distribution. In some 

cases, the typical outcome is of most interest. For example, in describing household incomes the 

median is most often used because the focus is on understanding the income of the typical 

household, and using the mean might distort this picture by giving undue weight to a small 

number of very wealthy households. In the climate change context, however, sound decisionmaking requires consideration of not only the typical or most likely outcomes, but also less likely

outcomes that could have very large (or small, or even negative) damages (the tails of the 

distribution). Use of the median to represent the SC-CO2 in a regulatory impact analysis would 

not necessarily lead to the most efficient policy choice that uses resources wisely to mitigate 

potential climate impacts (e.g., maximize the expected net benefits). In this case, EPA believes 

that the mean is the appropriate measure of central tendency.

Application to the Analyses of Illustrative Benefit-Cost Scenarios for New Sources 

EPA agrees with those supportive of the application of the estimates. Most commenters who 

disagreed with use of the SC-CO2 specifically disagreed with the use of a domestic estimate and 

different discount rates. See section 4.4-3 for EPA’s detailed response to comments on the use 

of a global versus domestic SCC. See section 4.4-7, for EPA’s detailed response to comments 

about the selection of the discount rate. See also EPA’s detailed response to comments on the 

IAMs, damage functions, socioeconomic scenarios, and the time horizon in 4.4-1 and EPA’s 

response to comments regarding peer review and other process-related issues for SCC, including 

the documentation discussing SC-CO2 methodology, in 4.4-5. 

Regarding the recommendation to detail the significant and unquantified climate effects in the 

RIA, i.e. the impacts currently omitted from the IAMs used to estimate the SC-CO2, EPA has 
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updated the RIA discussion to reference several publications that identify and discuss some of 

the important, unquantified climate effects. EPA notes, however, that it is not possible at this 

time to provide a precise list of each model’s treatment (i.e., included, excluded) of climate 

impacts. Instead, the TSDs present a robust discussion of this key analytical issue, e.g., how 

each model estimates climate impacts, the known parameters and assumptions underlying those 

models, and the implications of incomplete treatment of impacts (catastrophic and noncatastrophic) for the SC-CO2 estimates. Moreover, the discussion in the SC-CO2 TSD 

underscores the difficulty in accurately distilling the models’ treatment of impacts in table-form. 

Most notably, the use of aggregate damage functions—which consolidate information about 

impacts from multiple studies—in two of the models poses a challenge in listing included 

impacts. For example, within the broad agricultural impacts category, some of the sub-grouped 

impacts are not explicitly modeled but are highly correlated to other subcategories that are 

explicitly modeled. EPA agrees that it is important to update the SC-CO2 periodically to 

incorporate improvements in the understanding of greenhouse gas emissions impacts and will 

continue to follow and evaluate the latest science on impact categories that are omitted or not 

fully addressed in the IAMs. As previously noted, EPA and the other IWG members will seek 

external expert advice on the technical merits and challenges of potential approaches to update 

the damage functions in future revisions to the SCC estimates. Finally, the RIA also continues to 

discuss climate change impacts, specifically an overview of the 2009 Endangerment Finding and 

climate science assessments released since then (see RIA, Chapter 3).

Regarding comments about application of the SC-CO2 to marginal and non-marginal emission 

impacts: The SC-CO2 is an estimate of the marginal benefit of a net one-ton reduction in CO2

emissions. The SC-CO2 estimates are multiplied by estimates of net CO2 emissions changes in a 

given year to calculate the value of the benefits associated with the policy action that achieves 

the emissions reductions. Given that the definition of marginal in this context relates to the 

change in CO2 emissions relative to the global level of CO2 emissions, the SC-CO2 is the 

appropriate metric to use in estimating the benefits of emissions changes in the illustrative 

analyses presented in the RIA. The applicability of the SCC to monetizing the benefits of an 

emissions change is not related to rulemaking’s costs or economic impacts. These factors are 

independent of the SC-CO2 estimates and are therefore not related to the applicability of the SCCO2. The estimation of the social benefits of avoiding or reducing CO2 emissions is a separate 

and independent calculation from the analysis of compliance costs and impacts on industry

competitiveness. See Response to Comments, section 3.2, for more detailed response to 

comments on the conclusions of the RIA, including the primary conclusion that there will be 

negligible costs as a result of the proposed regulation. RIA Chapter 5 presents conclusions from 

the illustrative analyses. 

EPA disagrees with the comments that characterize the SC-CO2 as an illusory or otherwise 

unsupportable metric. EPA acknowledges uncertainty in the SCC estimates but disagrees that the 

uncertainty is so great as to undermine use of the SCC estimates in regulatory impact analysis. 

The uncertainty in the SCC estimates is fully acknowledged and comprehensively discussed in 

the TSDs and supporting academic literature. While uncertainty must be acknowledged and 

addressed in regulatory impact analyses, even an uncertain analysis provides useful information 

to decision makers and the public. For example, if an analysis shows that benefits of a policy

option consistently do (or do not) justify costs even over a broad range of estimates, this may

increase confidence in the robustness of this conclusion. Conversely, if choices among parameter 
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estimates within a plausible range significantly affect the conclusions of the analysis, this is an 

important consideration in deciding how to weigh the analytical results in the decision making 

process. The presence of uncertainty is thus not a reason to exclude the best available estimates 

of quantified/monetized benefits, as long as it is appropriately characterized. Rather, good 

regulatory practice requires that agencies use the best available scientific, technical and 

economic information to derive the best estimates of costs and benefits that they can, and then 

communicate to the public the limitations and uncertainties of the analyses. As discussed in the 

OMB Response to Comments on SC-CO2, this is what EPA and all of the members of the IWG 

have attempted to do in developing and discussing the SC-CO2 estimates. As noted in the SCCO2 TSDs, the EPA and the other IWG members are committed to periodic updates in the 

estimates to reflect ongoing developments in our understanding of the science and economics of 

climate change, including the treatment of uncertainty. Moreover, as previously stated, EPA has 

determined that the current SC-CO2 estimates continue to represent the best scientific 

information on the impacts of climate change available in a form appropriate for incorporating 

the damages from incremental CO2 emissions changes into regulatory analyses. See also 

Coalition for Responsible Regulation v. EPA, 684 F. 3d at 119-20 (“State and Industry

Petitioners assert that EPA ‘delegated’ its judgment to the IPCC, USGCRP, and NRC by relying 

on these assessments of clime-change science. This argument is little more than a semantic 

trick....EPA simply did here what it and other decision-makers often must do to make a sciencebased judgment: it sought out and reviewed existing scientific evidence to determine whether a 

particular finding was warranted. It makes no difference that much of the scientific evidence in 

large part consisted of ‘syntheses’ of individual studies and research. Even individual studies 

and research papers often synthesize past work in an area and then build upon it. This is how 

science works. EPA is not required to re-prove the existence of the atom every time it 

approaches a scientific question.”)

EPA disagrees with the comment that SC-CO2 values are not trusted because "they have 

increased dramatically in recent years" due in part to the many assumptions required for 

calculating SC-CO2. Commenter also believes SC-CO2 values are easily manipulated. EPA and 

other federal agencies had received multiple public comments urging them to update the 

estimates. In response to these comments and consistent with the 2010 commitment to 

periodically revise the SC-CO2 estimates, in 2013 the IWG released an update to the SC-CO2

estimates that maintained the same methodology underpinning the previous estimates, but 

applied the most current versions of the three IAMs. The science underlying the assessment and 

valuation of climate change impacts is constantly evolving. Since the publication of the initial 

SC-CO2 estimates in 2010, the representation of the science and economic consequences of 

climate change in the three IAMs has improved. The 2013 SC-CO2 technical update allowed the 

SC-CO2estimates to reflect these improvements. Some of the model revisions tended to increase 

the value of SC-CO2 while others tended decreased it. The updated values reflected the net 

effect of all of those changes. None of interagency working group’s 2010 modeling decisions 

were revisited as a part of the 2013 update. The 2013 update used the same approach and 

assumptions as the 2010 analysis, but with the latest version of each of the three models 

available. In addition, the TSDs fully discuss the sensitivities of the SC-CO2 and how the 

interagency working group explored those sensitivities. See also 4.4-4 for discussion about 

treatment of uncertainty.
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EPA strongly disagrees with the comment that climate change is an artifact of modeling, Global 

Circulation Models have no connection to the real world, and SCC is therefore a model of 

models. See 4.4-1, for detailed response to comments criticizing the IAMs and section 4.1 for 

response to comments climate change science.

Regarding the comments about quantification versus monetization of the climate benefits and the 

comment that the Agency has not provided a single quantifiable climate benefit of the proposed 

rule, EPA disagrees and notes that it has in fact provided the estimated value of climate benefits. 

The climate benefits estimates have been calculated using the estimated values of marginal 

climate impacts, known as the social cost of carbon (SC-CO2), presented in the Technical 

Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact 

Analysis under Executive Order 12866. The SC-CO2 is a metric that estimates the monetary

value of impacts associated with marginal changes in CO2 emissions in a given year. It includes 

a wide range of anticipated climate impacts, such as net changes in agricultural productivity and 

human health, property damage from increased flood risk, and changes in energy system costs, 

such as reduced costs for heating and increased costs for air conditioning. It is typically used to 

assess the avoided damages as a result of regulatory actions (i.e., benefits of rulemakings that 

have an incremental impact on cumulative global CO2 emissions). In order to calculate the dollar 

value for emission reductions, the SC-CO2 estimate for each emissions year is applied to changes 

in CO2 emissions for that year, and then discounted back to the analysis year using the same 

discount rate used to estimate the SC-CO2. While the impacts of CO2 emissions changes, such as 

sea level rise, are estimated within each integrated assessment model as part of the calculation of 

the SC-CO2, it is the resulting monetized damages that are relevant for conducting the benefitcost analysis. As such, it is the SC-CO2 estimates that are used in the RIA to estimate the 

welfare effects of quantified changes in CO2 emissions. See, e.g. RIA chapter 5.

Regarding the comments on leakage, specifically that multiplying the SC-CO2 values by

estimated CO2 reductions within the power sector only is problematic because the SC-CO2

should only be applied to estimated net changes in global CO2 emissions, EPA notes that it has 

applied the SC-CO2 estimates to the best available estimate of the net emissions impact in the 

illustrative analyses in the RIA (see RIA Ch 5). EPA recognizes that this is an important issue for 

analysts to consider in determining the net CO2 reductions to be valued in an RIA but notes that 

it does not affect the calculation of the SC-CO2 itself, which is an estimate of the marginal 

benefit of a net one-ton reduction in CO2 emissions. The SC-CO2 estimates are multiplied by

estimates of net GHG emissions changes to calculate the value of benefits associated with a 

policy action in a given year. It is in the estimation of net GHG emissions, and not the SC-CO2, 

that any leakage should be accounted for. Furthermore, as discussed in RTC Section 3.2 and in 

the RIA Chapter 4, EPA’s modeling, conducted using the Integrated Planning Model (IPM), as 

well as modeling conducted by the U.S. Energy Information Administration (EIA) showed that 

new generating capacity built through the period of analysis would be in compliance with the 

standard even in the baseline scenario and, as a result, the rule would not lead to changes in 

behavior. This finding held true even under a number of alternative scenarios. As a result, the 

EPA projected there would be negligible costs, benefits, energy impacts (including changes to 

electricity prices), employment impacts, or economic impacts associated with the rule in the 

period of analysis. (See Chapter 4 of the RIA.) Based on these conclusions, we would not expect 

business relocation, impacts to manufacturing, or the transfer of industrial activity to other 

countries. 
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Regarding the recommendation for USG guidance on the application of the SC-CO2, specifically

guidance that would clarify the TSD’s recommendation to use all four SC-CO2 estimates in 

rulemaking analyses, EPA first notes that it has followed the current guidance to consider all four 

values in regulatory impact analysis. EPA agrees that consistent and appropriate application of 

the SC-CO2 estimates is important. EPA will inform OMB of this comment requesting additional 

guidance of the application of the SC-CO2 to regulatory impact analysis.

Value of goods and services whose production is associated with CO2 emissions

Comment 4.4-9: Commenter 10951 states EPA's use of the Administration's Social Cost of 

Carbon values is misplaced. The SCC values assume that coal usage only create damage and are 

blind that the world uses coal because it is a reliable, low the benefits of coal usage, the SCC 

values have no worth at all in measuring whether reducing CO2 emissions would be a positive or 

a negative. The attached report The Social Costs of Carbon No, the Social Benefits of Carbon 

fills in the blank that the SCC values and EPA misses. The report compares the benefits of using 

coal with the SCC values. As the report concludes: Of primary importance, the successful 

development and utilization of fossil fuels, which generate CO2, facilitated successive industrial 

revolutions, created the modern world, and enabled the high quality of life currently taken for 

granted. There is a strong causal relationship between world GDP and CO2 emissions over the 

past two centuries, and this relationship is forecast to continue for the foreseeable future. We 

compared these indirect CO2 benefits to the SCC estimates. Commenter 10951 discussed the 

benefits of coal use and incorporated these benefits in a comparison of the CO2 costs and benefits 

(on a normalized per ton basis) using the SCC estimates and assumptions found that the current 

benefits clearly outweigh any hypothesized costs by, literally, orders of magnitude: The benefitcost (BC) ratios range up to more than 200-to-1 (Figure AB-1). We utilized forecast data to 

estimate B-C ratios through 2040 and found that future benefits also greatly exceed hypothesized 

costs by orders of magnitude: In the range of 40-to-1 to 400-to-1. To place these findings in 

perspective, normally, B-C ratios in the range of 2-to-1 or 3-to-1 are considered favorable. Thus, 

our main conclusion is that the benefits of CO2 overwhelmingly outweigh estimated CO2 costs 

no matter which SCC estimates or assumptions are used. In fact, the SCC estimates are relatively

so small as to be in the statistical noise of the estimated CO2 benefits. Thus, on balance, the 

benefits of coal usage dramatically outweigh the purported harms. EPA's view seems to be that 

in order to reduce CO2 emissions, nations should restrict coal usage and move to more 

expensive, less reliable energy sources. But doing so will come at a cost, and that cost, as the 

report and the discussion below shows, will be a very large net negative.

Commenter 3593 states estimates of the social cost of carbon that take negative values (i.e., 

because on net carbon creates more benefits than costs) document the relative value of using coal 

to generate electricity and demonstrate that the benefits of coal outweigh any reasonably 

estimated harm to public health and the environment, as discussed above. 

Commenter 9396 states that the IWG failed to account for various direct benefits such as 

increased growing seasons in some regions as well as indirect benefits arising from the positive 

attributes of GHG producing activities. These include the provision of services that result in 

direct health benefits such as a safer food supply, clean water, and access to health benefits 

associated with heating, cooling and electricity.
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Response 4.4-9: Rigorous evaluation of benefits and costs is a core tenet of the rulemaking 

process. EPA agrees that these are important issues that may be relevant to assessing the impacts 

of policies that reduce CO2 emissions. However, these issues are not relevant to the SC-CO2

itself. The SC-CO2 is an estimate of the net economic damages resulting from CO2 emissions, 

and therefore is used to estimate the benefit of reducing those emissions.

A rule that affects CO2 emissions may also affect the production or consumption of goods and 

services, in which case it could create costs and benefits for businesses and households that 

either produce or use those goods and services. These costs and benefits are important to include 

in an analysis of the rule’s impacts, but are not a result of changes in CO2 emissions. The SCCO2 is not a measure of social welfare from the consumption of goods and services whose 

production results in CO2 emissions, or other positive or negative externalities associated with 

the production of those goods and services. In other words, the SC-CO2 is just one component of 

a larger analysis that includes consideration of many other potential impacts, including labor 

market changes, energy security, electricity reliability, and changes in emissions of other 

pollutants, among others.

Comment 4.4-10: Commenter 3594 states while OREP appreciates the approach taken, we are 

also concerned that the proposed standards are based on SCC calculations that reflect 

conservative understandings of the impacts of climate change, due to the rapid changes in 

climate science, and an approach which is incapable of considering impacts and feedbacks that 

are just now becoming visible, and either cannot yet be fully verified, or have not yet had a 

chance to be incorporated. While there is not yet a basis for fully evaluating to collec tive costs 

of these impacts, recent history, including the recent revision to the SCC framework, shows that 

the cost will almost certainly be a significant addition to the costs used here. We therefore ask 

that this expectation be duly considered and acknowledged in so far as possible in the 

development of these standards.

Response 4.4-10: Please see RIA Chapter 3 for discussion about the SC-CO2 estimates as well 

as response to comments 4.4-1 for detailed response to comments on the SC-CO2 methodology. 

Also, see response to comments Section 3.1 and 3.2 and RIA Chapter 4, which discusses the 

analysis of benefits and costs and EPA’s modeling, conducted using the Integrated Planning 

Model (IPM), as well as modeling conducted by the U.S. Energy Information Administration 

(EIA), that showed that new generating capacity built through the period of analysis would be in 

compliance with the standard even in the baseline scenario and, as a result, the rule would not 

lead to changes in behavior. This finding held true even under a number of alternative scenarios. 

As a result, the EPA projected there would be negligible costs, benefits, energy impacts 

(including changes to electricity prices), employment impacts, or economic impacts associated 

with the rule in the period of analysis. (See Chapter 4 of the RIA.)

Comment 4.4-11: Commenter 10036 states the EPA RIA is somewhat contradictory on the topic 

of benefits, in that it concludes that there will be no benefit from the rule and then hypothesizes 

circumstances in which there would be benefits. Commenter continues, stating that the proposed 

EGU New Source GHG Standards are not expected to change GHG emissions for newly 

constructed EGUs and are anticipated to yield no monetized benefits and impose negligible 

costs, economic impacts, or energy impacts on the electricity sector or society. However, the 

RIA's Chapter 5 addresses the concept of "Social Cost of Carbon," and references a multi-agency
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report docketed in an earlier rulemaking49. Commenter 10036 adds there is no evidence 

presented in the RIA or the proposed rule that the Social Cost of Carbon report or analysis 

underwent a peer review consistent with the previously cited OMB requirements.

Response 4.4-11: EPA disagrees that there will be no benefits from the final rulemaking. See 

response to comments 3.2-1 for EPA’s detailed response to this comment, including discussion 

about the analysis of costs and benefits in the rulemaking. Regarding the social cost of carbon, 

see response to comments 4.4-5 for detailed discussion regarding peer review and consistency

with OMB guidance.

4.5 MISCELLANEOUS

Comment 4.5-1: Commenter 8925 states the social value of non-CO2 GHGs should be 

considered (e.g., for methane, nitrous oxide, and fluorinated gases), adding that the 2010 USG 

acknowledges this issue but provides no clear guidance.

Response 4.5-1: As discussed in Section III.G of the preamble to the final rulemaking, separate 

emission limits for non-CO2 GHGs, such as methane, were not established because they 

represent less than 1 percent of the total estimated GHG emissions, on a CO2-equivalent basis, 

from fossil-fuel fired electric power generating units. Therefore, EPA did not quantify potential 

changes in non-CO2 GHGs in the illustrative analyses. 

Comment 4.5-2: Commenter 9514 states it is important to emphasize that section 111 does not 

require a traditional cost-benefit analysis, but simply requires that an agency's determination of 

BSER impose costs that are not exorbitant or too high for the industry to bear. Commenter 9514 

adds that CO2 impacts should be analyzed along with the benefits from reduced quantities of cooccurring pollutants.

Response 4.5-2: The commenter correctly quotes the caselaw regarding consideration of costs 

under section 111 (a). In addition, EPA’s analysis in RIA chapter 5 is consistent with the 

commenter’s suggestions.

Comment 4.5-3: Commenter 9685 states the terminology "social cost of carbon" is wrong and 

misleading. As EPA knows, greenhouse gases, including carbon dioxide, are not "Carbon". 

There are more greenhouse gases than carbon dioxide. Methane (natural gas) is an important 

greenhouse gas. The IPCC2013 Summary for Policy Makers has acknowledged that the global 

warming potential (GWP) of methane has been underestimated. EPA has to address the problem 

in all of its analyses, including the planned regulation of new and/or existing natural gas plants. 

This major error also needs to be addressed in the IAMs. Humans exhale carbon dioxide (CO2), 

not carbon.

Response 4.5-3: EPA disagrees with the commenter, who has incorrectly assumed that the 

common shorthand of “carbon” means that the social cost of carbon dioxide (SC-CO2) estimates 

have not been adjusted to account for the mass of carbon in carbon dioxide emissions. One of 

 

49 http://www.epa.gov/oms/climate/regulations/scc-tsd.pdf.
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the steps in the estimation of the SC-CO2 used in this rulemaking is to translate the molecular 

weight of carbon to the molecular weight of carbon dioxide. Furthermore, the RIA for the 

proposed rulemaking clearly defined the shorthand of “SCC” or “social cost of carbon” as 

accounting for the carbon in carbon dioxide emissions: “The social cost of carbon (SCC) is a 

metric that estimates the monetary value of impacts associated with marginal changes in CO2

emissions in a given year” (RIA at proposal, section 5.7.1). The RIA for this rulemaking and the 

supporting documentation, including the social cost of carbon technical support documents, all 

clearly show that the units are denominated in dollars per ton CO2 emissions. EPA is well aware 

that carbon dioxide is not the only greenhouse gas and that methane is an important greenhouse 

gas. See section III.G of the preamble to the final rulemaking for discussion about why this 

action regulates only emissions of CO2. See Response to Comments section 4.5, comments 4.4-1 

and 4.4-2, for EPA’s response to comments on the IAMs used to estimate the SC-CO2 and the 

climate science components of these models, respectively.

Comment 4.5-4: Commenter 8925 states regulatory analysis applications should be sure to 

estimate changes in net global emissions associated with a proposed rule, or justify why it is 

unnecessary because a proposed rule may have emissions implications beyond the bounda ries of 

what is regulated (i.e., "leakage"), and those effects should be accounted for to properly estimate 

CO2 reduction benefits.

Commenter 9396 Emissions Exports: The IWG fails to account for economic migration of 

emissions; as one country's efforts to reduce GHG emissions makes manufacturing more 

expensive, the economic activity shifts to other countries that are more climate intensive 

resulting in a net increase in emissions.

Commenter 9401 states history provides an important lesson on how increased energy costs have 

both a direct and indirect impact on reduced employment and GHG leakage. Figure 2 details the 

relationship between rising natural gas prices and falling employment in the manufacturing 

sector. According to EIA, electricity prices rose 210 percent from 1999 to 2008. During the time 

period of 2000 to 2008, the manufacturing sector shut down an estimated 54,905 facilities, 

decimating the economy of thousands of communities across the country. During that same time 

period, net manufactured goods imports grew by 46 percent, a clear indication of loss of US 

manufacturing competitiveness. A key point that needs to be emphasized is that if electricity 

prices rise because of the EPA GHG rule, manufacturing employment and GHG leakage would 

have the same effect as higher natural gas prices. 

Commenter 9401 states EPA has not performed an analysis of carbon leakage which will occur 

as a result of the rule, thus overstating the benefits. Because manufacturing uses 25 percent of all 

U.S. electricity, we are significantly impacted by electricity prices. Figure 1 illustrates that coal 

consistently provides the lowest cost energy to generate electricity. The rule would stop the use 

of coal for use in new power generating units and deprive manufacturing from the lowest cost 

power generation, thereby impacting competitiveness. It is important to note, that having coal as 

a major component of electricity fuel diversity provides for increased reliability. Higher 

electricity costs and reduced reliability will shift EITE industries to other countries along with 

their jobs and GHG emissions, and accomplish nothing. The EPA must perform an analysis of 

carbon leakage that will occur as a result of the rule. Not having done so, the EPA has overstated 

the projected benefits of emission reductions and not accounted for the associated loss of 
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economic activity and jobs moving outside the U.S. Without including the GHG leakage, any 

benefits are arbitrary and capricious. And, since most countries have higher power generation 

GHG rates, it would result in a net increase in global GHG emissions.

Commenter 9401 states history provides an important lesson on how increased energy costs have 

both a direct and indirect impact on reduced employment and GHG leakage. Figure 2 details the 

relationship between rising natural gas prices and falling employment in the manufacturing 

sector. According to EIA, electricity prices rose 210 percent from 1999 to 2008. During the time 

period of 2000 to 2008, the manufacturing sector shut down an estimated 54,905 facilities, 

decimating the economy of thousands of communities across the country. During that same time 

period, net manufactured goods imports grew by 46 percent, a clear indication of loss of US 

manufacturing competitiveness. A key point that needs to be emphasized is that if electricity 

prices rise because of the EPA GHG rule, manufacturing employment and GHG leakage would 

have the same effect as higher natural gas prices.

Response 4.5-4: EPA notes that it has applied the SC-CO2 estimates to the best available 

estimate of the net emissions impact in the illustrative analyses in the RIA (see RIA Ch 5). EPA 

recognizes that this is an important issue for analysts to consider in determining the net CO2

reductions to be valued in an RIA but notes that it does not affect the calculation of the SC-CO2

itself, which is an estimate of the marginal benefit of a net one-ton reduction in CO2 emissions. 

The SC-CO2 estimates are multiplied by estimates of net GHG emissions changes to calculate 

the value of benefits associated with a policy action in a given year. It is in the estimation of net 

GHG emissions, and not the SC-CO2, that any leakage should be accounted for. 

Furthermore, as discussed in RTC Section 3.2 and in the RIA Chapter 4, EPA’s modeling, 

conducted using the Integrated Planning Model (IPM), as well as modeling conducted by the 

U.S. Energy Information Administration (EIA) showed that new generating capacity built 

through the period of analysis would be in compliance with the standard even in the baseline 

scenario and, as a result, the rule would not lead to changes in behavior. This finding held true 

even under a number of alternative scenarios. As a result, the EPA projected there would be 

negligible costs, benefits, energy impacts (including changes to electricity prices), employment 

impacts, or economic impacts associated with the rule in the period of analysis. (See Chapter 4 of 

the RIA.) Based on these conclusions, we would not expect business relocation, impacts to 

manufacturing, or the transfer of industrial activity to other countries. 

Comment 4.5-5: Commenter 9687 states EPA has continued to knowingly use incorrect PM2.5 

health effects data (factor of 40 too high) that needs to be corrected in both the Endangerment 

Finding and the Social Cost of Carbon used to justify this rule. Commenter includes excerpt of 

other document to back up point.

Response 4.5-5: The PM2.5 health data is not used to calculate of the social cost of carbon 

dioxide. The health impacts of particulate matter are treated separately. See Chapter 3 of the 

final RIA for a discussion about health co-benefits and sections 4.1 and 4.2 of this response to 

comments for discussion about the 2009 Endangerment Finding. 

Comment 4.5-6: Commenter 9687 states serious questions have been raised by Congress about 

the current standards for PM2.5 and Ozone regulations which are used to justify the 
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Endangerment Finding, the Social Cost of Carbon, and the proposed rule for new electric power 

plants.

Response 4.5-6: The standards for PM2.5 and ozone are not used to justify the Endangerment 

Finding nor are they used to justify the social cost of carbon. The attachments provided by the 

commenter do not support the commenter’s assertion. Rather, the commenter has provided a 

letter written by a member of Congress to an EPA employee with questions about the 1997 

NAAQS for ozone and particular matter, which are not relevant to this rulemaking action, and 

EPA personnel matters that are likewise not relevant. 

Comment 4.5-7: Commenter 9600 calls for withdrawal of this proposal, if for no other reason 

based on its own conclusion that it would have no benefit including failing to accomplishing any

reductions in CO2 emissions from coal-fired EGUs over the base case modeling period. Further, 

Commenter 9600-5985 states the natural gas pipeline system will have to undergo considerable 

modifications and upgrades to provide natural gas on a "firm" basis to a baseload EGUs. Natural 

gas pipelines are simply not sized adequately nor are they located where baseload EGU's would 

be built.

Response 4.5-7: Regarding comment that the proposal should be withdrawn and that it has no 

benefit, EPA disagrees. See Response to Comments, Section 3.1.

Comment 4.5-8: Commenter 10961 states the EPA's "endangerment finding" on carbon dioxide 

incorporates an enormous body of scientific information demonstrating that greenhouse gas 

emissions must be reduced immediately in order to avoid catastrophic climate impacts. The 

Clean Air Act requires binding limits on any pollutant that threatens human health and welfare, 

and carbon dioxide threatens human welfare as no other pollutant has, to the point of existential 

hazard. The EPA's program for quantifying health hazards and translating them into missions 

limits is robust, well-developed, and equally applicable to the damage that excess carbon dioxide 

will cause. The Clean Air Act has brought extraordinary material benefits to America from 

reducing pollutants that erode our health and economy, and the same challenge now exists from 

carbon dioxide. Far from being unsuited to the Clean Air Act as some political opponents 

suggest, global warming's lethal threat to human survival decidedly qualifies as the threat to 

human health and welfare the Clean Air Act was meant to avert.

Response 4.5-8: EPA thanks the commenter for this comment and agrees that the Clean Air Act 

has resulted in notable social benefits.

Comment 4.5-9: Commenter 9685 states that EPA's claim - based on the analysis presented in 

Chapter 5 of the RIA, the EPA projects that this proposed rule will result in negligible CO2

emission changes, quantified benefits, and costs by 2022 - is not valid and any use of the SCC to 

justify the proposed rule is not valid as discussed below.

Response 4.5-9: See EPA’s response to comments, sections 3.1 and 3.2, for EPA’s response to 

comments regarding the emission and economic impacts of this rulemaking action. See 4.5-8 for 

EPA’s response to comments regarding the application of SC-CO2 to the RIA.

Comment 4.5-10: Commenter 9685 states EPA's MAGICC is used to "calibrate" the IAMs. The 

IAM models are "calibrated to match the carbon cycle in the Model for the Assessment of 
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Greenhouse Gas Induced Climate Change (MAGICC)". There is no documentation on the input 

variables used for the MAGICC run(s) nor is there data available to confirm the "calibration", 

much less the data used to validate the current version 5.3 of MAGICC. MAGICC uses AR4 

IPCC models for its own "calibration". EPA is fully aware of this major fatal flaw and has had 

access to the information since the publication of the AR4 in 2007. Many agency members of the 

IWG had employees involved in the IPCC reports and were equally awar e of the serious flaws in 

the IPCC models, including the US taxpayer funded models. Model prediction errors were 

acknowledged in the comments on the USGCRP assessment in 2006 and on the EPA 

Endangerment Finding in 2008. Therefore, there is no excuse other than intentional omission for 

the IWG to have failed to acknowledge the epic failure of the models.

Response 4.5-10: EPA strongly disagrees with the claim that the Agency has not provided 

information necessary to understand the SC-CO2 estimates. The TSDs provide a complete record 

of the methodology and assumptions used to develop the SCC estimates, including references to 

the academic literature. Independent analysts have sought and received information from EPA 

allowing them to implement the IWG’s SC-CO2 approach and modify it further if they choose. In 

fact, one requestor noted publically that the EPA “modelers have been very open, collegial, and 

helpful.”50 Additional documentation is available in the academic literature on the models

themselves. See also response to comments, section 4.4-5 for discussion about transparency and 

opportunities for public comment on the SC-CO2.

Comment 4.5-11: Commenter 9685 states apparently errors were found that required a "revised" 

Technical Support Document (issued in November 2013). There was no detailed explanation of 

what the errors were that required a revision after only six months, who identified the errors, who 

made the changes to the models to reflect these changes and how the models were validated. 

EPA should promptly provide this information to the public by posting on regulations.gov for 

this rule. The Technical Support Documents (TSDs) summarize the derivation of the SCC 

estimates using the three Integrated Assessment Models and provides updated values of the SCC 

that reflect "technical corrections" to the estimates released in May 2013. Unfortunately the 

Interagency Working Group (in which EPA was an active participant) convened in 2009 has 

operated in secret and the TSDs were developed in secret. There is no record of any comments 

provided by EPA or any other agency participants. There is no identification of the EPA 

participants. Commenter posits that EPA disregarded the transparency requirements expected of 

any taxpayer funded government agency and as directed by President Obama. Providing 

comprehensive comments on the rule is impossible without full disclosure by EPA on 

regulations.gov.

Response 4.5-11: The commenter has incorrectly stated that there was no detailed explanation 

about the corrections. OMB publicly announced the correction51 and provided a public link to 

the corrected TSD. Appendix B of that TSD identified the errors with complete detail, explained 

how those errors were corrected, and described the effect of the correction; the TSD also 

 

50 http://dailysignal.com/2013/11/06/white-house-reopens-the-scc/.

51 https://www.whitehouse.gov/blog/2013/11/01/refining-estimates-social-cost-carbon
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presented the corrected estimates.52 Furthermore, EPA submitted a memo to the docket for this 

rulemaking, EPA-HQ-OAR-2013-0495, that identified the SC-CO2 errors with complete detail, 

explained how those errors were corrected, and described the effect of the correction, both with 

respect to the SC-CO2 estimates and with respect to the analysis in the RIA. 53

 

52 See https://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-forregulator-impact-analysis.pdf.

53 See EPA-HQ-OAR-2013-0495-0037 in www.regulations.gov.