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[Federal Register Volume 78, Number 250 (Monday, December 30, 2013)]
[Notices]
[Pages 79419-79423]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-31270]

[[Page 79419]]

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DEPARTMENT OF ENERGY

Energy Conservation Program for Consumer Products and Commercial 
and Industrial Equipment: Effect of Revised Estimates of the Social 
Cost of Carbon

AGENCY: Office of Energy Efficiency and Renewable Energy, Department of 
Energy.

ACTION: Notice of Data Availability (NODA).

-----------------------------------------------------------------------

SUMMARY: The U.S. Department of Energy (DOE) has, for several years, 
used monetary values for the Social Cost of Carbon (SCC) to estimate 
the value to society of reducing carbon emissions that could result 
from rulemakings establishing energy conservation standards for 
residential appliances and industrial equipment. In recent standards 
rulemakings for microwave oven standby and off modes, metal halide 
lighting fixtures, commercial refrigeration equipment, walk-in coolers 
and freezers, and furnace fans, DOE used SCC values developed by an 
interagency group and released to the public in May 2013 by the Office 
of Management and Budget (OMB). OMB has issued updated SCC values that 
reflect minor technical corrections to the estimates that were released 
in May 2013. The purpose of this notice is to show the impact of these 
updated values on the national economic benefits projected to result 
from the proposed standards for commercial refrigeration equipment, 
walk-in coolers and freezers, metal halide lighting fixtures, and 
furnace fans.

FOR FURTHER INFORMATION CONTACT: Requests for additional information 
may be sent to Mr. John Cymbalsky, U.S. Department of Energy, Office of 
Energy Efficiency and Renewable Energy, Building Technologies Office, 
EE-2J, 1000 Independence Avenue SW., Washington, DC 20585-0121. 
Telephone: (202) 287-1692. Email: John.Cymbalsky@ee.doe.gov.
    Ms. Ami Grace-Tardy, U.S. Department of Energy, Office of the 
General Counsel, GC-71, 1000 Independence Avenue SW., Washington, DC 
20585-0121. Telephone: (202) 586-5709. Email: Ami.Grace-Tardy@hq.doe.gov.

SUPPLEMENTARY INFORMATION:

I. Introduction

    For several years, DOE has used the monetary values provided by the 
SCC to estimate the value to society of reduced carbon emissions from 
rulemakings establishing energy conservation standards for residential 
appliances and industrial equipment. DOE has recently issued standards 
rulemakings for microwave oven standby and off modes, commercial 
refrigeration equipment, walk-in coolers and freezers, metal halide 
lighting fixtures, and furnace fans. DOE issued a final rule for 
microwave oven standby and off modes standards (78 FR 36316 (June 17, 
2013)), and it issued notices of proposed rulemaking (NOPR) for metal 
halide lighting fixtures (78 FR 51463 (August 20, 2013)), commercial 
refrigeration equipment (78 FR 55889 (September 11, 2013)), walk-in 
coolers and freezers (78 FR 55781 (September 11, 2013)), and 
residential furnace fans (78 FR 64067 (October 25, 2013)). The analyses 
prepared for these rulemakings used values for the SCC that were 
developed by an interagency group and issued by OMB in May 2013.\1\ The 
May 2013 estimates reflect values that are similar to those used by 
other governments, international institutions, and major corporations. 
Table 1 shows the May 2013 sets of SCC estimates in five year 
increments from 2010 to 2050. The interagency group selected four sets 
of SCC values for use in regulatory analyses. Three sets of values are 
based on the average SCC from the three integrated assessment models 
that were evaluated, at discount rates of 2.5, 3, and 5 percent. The 
fourth set, which represents the 95th percentile SCC estimate across 
all three models at a 3-percent discount rate, is included to represent 
higher-than-expected impacts from temperature change further out in the 
tails of the SCC distribution.
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    \1\ Technical Update of the Social Cost of Carbon for Regulatory 
Impact Analysis Under Executive Order 12866. Interagency Working 
Group on Social Cost of Carbon, United States Government. May 2013.
---------------------------------------------------------------------------

    On November 1, 2013, OMB issued updated values for the May 2013 
SCC.\2\ OMB announced a 60-day public comment period on the updated 
values and the underlying technical support document on November 26, 
2013. 78 FR 70586. These updated values reflect minor technical 
corrections to the May 2013 SCC estimates. The technical corrections to 
the May 2013 SCC values represent the best available science and data 
on the economic impacts on society of climate change, and, as such, 
will be used by DOE in its rulemakings. Table 2 shows the updated sets 
of SCC estimates in five year increments from 2010 to 2050. The changes 
from the May 2013 values to the November 2013 values are small.
---------------------------------------------------------------------------

    \2\ http://www.whitehouse.gov/blog/2013/11/01/refining-estimates-social-cost-carbon

                     Table 1--Annual SCC Values From May 2013 Interagency Report, 2010-2050
                                        [2007 dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                               Discount rate  (percent)
                                     ---------------------------------------------------------------------------
                Year                          5                  3                 2.5                 3
                                     ---------------------------------------------------------------------------
                                           Average            Average            Average        95th Percentile
----------------------------------------------------------------------------------------------------------------
2010................................                 11                 33                 52                 90
2015................................                 12                 38                 58                109
2020................................                 12                 43                 65                129
2025................................                 14                 48                 70                144
2030................................                 16                 52                 76                159
2035................................                 19                 57                 81                176
2040................................                 21                 62                 87                192
2045................................                 24                 66                 92                206
2050................................                 27                 71                 98                221
----------------------------------------------------------------------------------------------------------------

[[Page 79420]]

               Table 2--Annual SCC Values from November 2013 Interagency Report Update, 2010-2050
                                        [2007 dollars per metric ton CO2]
----------------------------------------------------------------------------------------------------------------
                                                               Discount rate  (percent)
                                     ---------------------------------------------------------------------------
                Year                          5                  3                 2.5                 3
                                     ---------------------------------------------------------------------------
                                           Average            Average            Average        95th Percentile
----------------------------------------------------------------------------------------------------------------
2010................................                 11                 32                 51                 89
2015................................                 11                 37                 57                109
2020................................                 12                 43                 64                128
2025................................                 14                 47                 69                143
2030................................                 16                 52                 75                159
2035................................                 19                 56                 80                175
2040................................                 21                 61                 86                191
2045................................                 24                 66                 92                206
2050................................                 26                 71                 97                220
----------------------------------------------------------------------------------------------------------------

II. Discussion

    As indicated above, the updated SCC values are only slightly 
different from the May 2013 SCC values. As such, the impact of using 
these values on DOE's estimates of the economic value of reductions in 
CO2 emissions associated with the energy conservation 
standards for the products mentioned in section I is very small, and in 
no way affects the policy decisions made by DOE in the relevant 
rulemakings. Nonetheless, DOE wishes to inform interested parties of 
the exact effect of the updated values on the national economic 
benefits projected to result from the proposed standards for commercial 
refrigeration equipment, walk-in coolers and freezers, metal halide 
lighting fixtures, and residential furnace fans. The benefits of 
reductions in CO2 emissions associated with energy 
conservation standards using the May 2013 SCC values and the updated 
SCC values, along with the total net benefits in each case, are shown 
in: Table 3 for the proposed metal halide lighting fixtures standards 
(in real 2012 dollars); Table 4 for the proposed commercial 
refrigeration equipment standards (in real 2012 dollars); Table 5 for 
the proposed walk-in coolers and freezers standards (in real 2012 
dollars); and Table 6 for the proposed residential furnace fans 
standards (in real 2012 dollars). Given the small change in the 
benefits, DOE has, in this notice, only shown the summary National 
impacts of the changes and not the results at the more detailed trial 
standard levels (TSLs). However, DOE notes that the changes at the 
Trial Standard Level (TSL) level are equally small and do not in any 
way affect DOE's evaluation of those TSLs.\3\
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    \3\ In DOE rulemakings, ``TSLs'' represent different efficiency 
levels that DOE analyzes when deciding which efficiency level to 
propose or adopt based on statutory criteria.

  Table 3--Summary of National Economic Benefits and Costs of Proposed
       Metal Halide Lamp Fixture Energy Conservation Standards \4\
------------------------------------------------------------------------
                                      Present value      Discount rate
             Category                (million 2012$)       (percent)
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Operating Cost Savings............              1,848                  7
                                                3,748                  3
------------------------------------------------------------------------
        Using Revised November 2013 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value                     332                  5
 ($11.8/t case)*..................
CO2 Reduction Monetized Value                   1,514                  3
 ($39.7/t case)*..................
CO2 Reduction Monetized Value                   2,406                2.5
 ($61.2/t case)*..................
CO2 Reduction Monetized Value                   4,666                  3
 ($117/t case)*...................
NOX Reduction Monetized Value (at                  45                  7
 $2,639/ton)*.....................
                                                   91                  3
Total Benefits [dagger]...........              3,406                  7
                                                5,352                  3
------------------------------------------------------------------------
          Using Original May 2013 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value                     333                  5
 ($12.9/t case)*..................
CO2 Reduction Monetized Value                   1,532                  3
 ($40.8/t case)*..................
CO2 Reduction Monetized Value                   2,436                2.5
 ($62.2/t case)*..................
CO2 Reduction Monetized Value                   4,689                  3
 ($117/t case)*...................
NOX Reduction Monetized Value (at                  45                  7
 $2,639/ton)*.....................
                                                   91                  3
Total Benefits [dagger]...........              3,424                  7
                                                5,371                  3
------------------------------------------------------------------------

[[Page 79421]]

 
                                  Costs
------------------------------------------------------------------------
Incremental Installed Costs.......                897                  7
                                                1,294                  3
------------------------------------------------------------------------
       Net Benefits (Using Revised November 2013 SCC Values) Costs
------------------------------------------------------------------------
Including CO2 and NOX Reduction                 2,510                  7
 Monetized Value..................
                                                4,058                  3
------------------------------------------------------------------------
         Net Benefits (Using Original May 2013 SCC Values) Costs
------------------------------------------------------------------------
Including CO2 and NOX Reduction                 2,528                  7
 Monetized Value..................
                                                4,076                  3
------------------------------------------------------------------------
* The CO2 values represent global values of the social cost of CO2
  emissions (in 2012$) in 2015 under several scenarios. The first three
  values are averages of SCC distributions calculated using 5%, 3%, and
  2.5% discount rates, respectively. The fourth value represents the
  95th percentile of the SCC distribution calculated using a 3% discount
  rate. The value for NOX is the average of the low and high values used
  in DOE's analysis.
[dagger] Total Benefits for both the 3% and 7% cases are derived using
  the series corresponding to SCC value of $39.7/t or $40.8/t in 2015
  (derived from the 3% discount rate value for SCC).

     
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    \4\ See Table I.3 at 78 FR 51463, 51468 (August 20, 2013).

  Table 4--Summary of National Economic Benefits and Costs of Proposed
  Commercial Refrigeration Equipment Energy Conservation Standards \5\
------------------------------------------------------------------------
                                     Present value       Discount rate
             Category               (million 2012$)        (percent)
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Operating Cost Savings...........              2,695                 7
------------------------------------------------------------------------
                                               6,034                 3
------------------------------------------------------------------------
        Using Revised November 2013 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value                    306                 5
 ($11.8/t case) *................
CO2 Reduction Monetized Value                  1,481                 3
 ($39.7/t case) *................
CO2 Reduction Monetized Value                  2,418                 2.5
 ($61.2/t case) *................
CO2 Reduction Monetized Value                  4,527                 3
 ($117/t case) *.................
NOX Reduction Monetized Value (at                 50                 7
 $2,639/ton) *...................
                                                 108                 3
Total Benefits[dagger]...........              4,226                 7
                                               7,623                 3
------------------------------------------------------------------------
          Using Original May 2013 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value                    308                 5
 ($12.9/t case) *................
CO2 Reduction Monetized Value                  1,504                 3
 ($40.8/t case) *................
CO2 Reduction Monetized Value                  2,452                 2.5
 ($62.2/t case) *................
CO2 Reduction Monetized Value                  4,552                 3
 ($117/t case) *.................
NOX Reduction Monetized Value (at                 50                 7
 $2,639/ton) *...................
                                                 108                 3
Total Benefits[dagger]...........              4,249                 7
                                               7,646                 3
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Incremental Installed Costs......              1,089                 7
                                               1,967                 3
------------------------------------------------------------------------
          Net Benefits (Using Revised November 2013 SCC Values)
------------------------------------------------------------------------
Including CO2 and NOX Reduction                3,137                 7
 Monetized Value.................

[[Page 79422]]

 
                                               5,656                 3
------------------------------------------------------------------------
            Net Benefits (Using Original May 2013 SCC Values)
------------------------------------------------------------------------
Including CO2 and NOX Reduction                3,160                 7
 Monetized Value.................
                                               5,679                 3
------------------------------------------------------------------------
* The CO2 values represent global values of the social cost of CO2
  emissions (in 2012$) in 2015 under several scenarios. The first three
  values are averages of SCC distributions calculated using 5, 3, and
  2.5 discount rates, respectively. The fourth value represents the 95th
  percentile of the SCC distribution calculated using a 3 discount rate.
  The value for NOX is the average of the low and high values used in
  DOE's analysis.
[dagger] Total Benefits for both the 3 and 7 cases are derived using the
  series corresponding to SCC value of $39.7/t or $40.8/t in 2015
  (derived from the 3 discount rate value for SCC).

     
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    \5\ See Table I.3 at 78 FR 55889, 55893 (September 11, 2013).

  Table 5--Summary of National Economic Benefits and Costs of Proposed
     Walk-In Coolers and Freezers Energy Conservation Standards \6\
------------------------------------------------------------------------
                                     Present value       Discount rate
             Category               (billion 2012$)        (percent)
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Operating Cost Savings...........              12.41                 7
                                               31.56                 3
------------------------------------------------------------------------
        Using Revised November 2013 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value                   1.87                 5
 ($11.8/t case) *................
CO2 Reduction Monetized Value                   8.87                 3
 ($39.7/t case) *................
CO2 Reduction Monetized Value                  14.19                 2.5
 ($61.2/t case) *................
CO2 Reduction Monetized Value                  27.39                 3
 ($117/t case) *.................
NOX Reduction Monetized Value (at               0.24                 7
 $2,639/ton) *...................
                                                0.55                 3
Total Benefits[dagger]...........              21.52                 7
                                               40.98                 3
------------------------------------------------------------------------
          Using Original May 2013 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value                   1.88                 5
 ($12.9/t case) *................
CO2 Reduction Monetized Value                   8.96                 3
 ($40.8/t case) *................
CO2 Reduction Monetized Value                  14.36                 2.5
 ($62.2/t case) *................
CO2 Reduction Monetized Value                  27.52                 3
 ($117/t case) *.................
NOX Reduction Monetized Value (at               0.24                 7
 $2,639/ton) *...................
                                                0.55                 3
Total Benefits[dagger]...........              21.61                 7
                                               41.07                 3
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Incremental Installed Costs......               3.77                 7
                                                7.26                 3
------------------------------------------------------------------------
          Net Benefits (Using Revised November 2013 SCC Values)
------------------------------------------------------------------------
Including CO2 and NOX Reduction                17.76                 7
 Monetized Value.................
                                               33.72                 3
------------------------------------------------------------------------
            Net Benefits (Using Original May 2013 SCC Values)
------------------------------------------------------------------------
Including CO2 and NOX Reduction                17.84                 7
 Monetized Value.................
                                               33.80                 3
------------------------------------------------------------------------
* The CO2 values represent global values of the social cost of CO2
  emissions (in 2012$) in 2015 under several scenarios. The first three
  values are averages of SCC distributions calculated using 5, 3, and
  2.5 discount rates, respectively. The fourth value represents the 95th
  percentile of the SCC distribution calculated using a 3 discount rate.
  The value for NOX is the average of the low and high values used in
  DOE's analysis.
[dagger] Total Benefits for both the 3 and 7 cases are derived using the
  series corresponding to SCC value of $39.7/t or $40.8/t in 2015
  (derived from the 3 discount rate value for SCC).

[[Page 79423]]

     
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    \6\ See Table I-3 at 78 FR 55781, 55786-87 (September 11, 2013).

  Table 6--Summary of National Economic Benefits and Costs of Proposed
              Furnace Fan Energy Conservation Standards \7\
------------------------------------------------------------------------
                                     Present value       Discount rate
             Category               (billion 2012$)        (percent)
------------------------------------------------------------------------
                                Benefits
------------------------------------------------------------------------
Operating Cost Savings...........              11.58                 7
                                               32.00                 3
------------------------------------------------------------------------
        Using Revised November 2013 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value                   2.22                 5
 ($11.8/t case) *................
CO2 Reduction Monetized Value                  11.44                 3
 ($39.7/t case) *................
CO2 Reduction Monetized Value                  18.60                 2.5
 ($61.2/t case) *................
CO2 Reduction Monetized Value                  35.42                 3
 ($117/t case) *.................
NOX Reduction Monetized Value (at               0.11                 7
 $2,639/ton) *...................
                                                0.31                 3
Total Benefits[dagger]...........              23.13                 7
                                               43.76                 3
------------------------------------------------------------------------
          Using Original May 2013 Social Cost of Carbon Values
------------------------------------------------------------------------
CO2 Reduction Monetized Value                   2.25                 5
 ($12.9/t case) *................
CO2 Reduction Monetized Value                  11.52                 3
 ($40.8/t case) *................
CO2 Reduction Monetized Value                  18.81                 2.5
 ($62.2/t case) *................
CO2 Reduction Monetized Value                  35.56                 3
 ($117/t case) *.................
NOX Reduction Monetized Value (at               0.11                 7
 $2,639/ton) *...................
                                                0.31                 3
Total Benefits[dagger]...........              23.21                 7
                                               43.84                 3
------------------------------------------------------------------------
                                  Costs
------------------------------------------------------------------------
Incremental Installed Costs......               3.07                 7
                                                5.85                 3
------------------------------------------------------------------------
          Net Benefits (Using Revised November 2013 SCC Values)
------------------------------------------------------------------------
Including CO2 and NOX Reduction                20.06                 7
 Monetized Value.................
                                               37.91                 3
------------------------------------------------------------------------
            Net Benefits (Using Original May 2013 SCC Values)
------------------------------------------------------------------------
Including CO2 and NOX Reduction                20.14                 7
 Monetized Value.................
                                               38.99                 3
------------------------------------------------------------------------
* The CO2 values represent global values of the social cost of CO2
  emissions (in 2012$) in 2015 under several scenarios. The first three
  values are averages of SCC distributions calculated using 5, 3, and
  2.5 discount rates, respectively. The fourth value represents the 95th
  percentile of the SCC distribution calculated using a 3 discount rate.
  The value for NOX is the mid-range value used in DOE's analysis.
[dagger] Total Benefits for both the 3 and 7 cases are derived using the
  series corresponding to SCC value of $39.7/t or $40.8/t in 2015
  (derived from the 3 discount rate value for SCC).

     
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    \7\ See Table 1.3 at 78 FR 64067, 64071 (October 25, 2013).

    Issued in Washington, DC, on December 24, 2013.
Kathleen B. Hogan,
Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and 
Renewable Energy.
[FR Doc. 2013-31270 Filed 12-27-13; 8:45 am]
BILLING CODE 6450-01-P
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