Memorandum

Subject: November 2013 Adjustment to the Social Cost of Carbon 

Date: November 13, 2013 

From: Amanda Curry Brown 

 Office of Air Quality Planning and Standards 

To: Docket EPA-HQ-OAR-2013-0495 

On November 1, 2013, the federal government released a minor adjustment to the May 2013 

social cost of carbon (SCC) estimates reflecting two technical corrections. The first addressed a 

misspecification in the FUND model’s computer code, as covered in an erratum to Anthoff and 

Tol (2013) published in the same journal (Climatic Change) in October 2013. The second 

addressed an inadvertent misspecification of the equilibrium climate sensitivity distribution in 

the FUND model. The Office of Management and Budget (OMB) announced the update via a 

blog posting1

 and published the revised estimates in the SCC Technical Support Document 

(TSD).2 The OMB blog posting also stated that in response to public and stakeholder interest in 

SCC, OMB will provide an opportunity for public comment on the updated estimates. The 

comment request will be in addition to the public comment opportunities already available 

through particular rulemakings. 

Chapter 5 of the regulatory impact analysis (RIA) supporting the 2013 proposed Standards of 

Performance for Greenhouse Gas Emissions for New Stationary Sources: Electric Utility 

Generating Units (EGU New Source GHG Standards) includes sensitivity analyses that use the 

May 2013 SCC estimates. Two of the SCC estimates used in the sensitivity analysis (average SCC 

at a 2.5% discount rate and 95th percentile SCC at a 3% discount rate for CO2 emissions in the 

year 2020) each decreased by one dollar in the November 2013 revision. The remaining two 

SCC estimates (average SCC at a 5% discount rate and average SCC at a 3% discount rate for CO2

emissions in 2020) were unchanged. Table 1 summarizes the SCC estimates used in the analysis 

and the revised estimates. 

Table 1. Social Cost of Carbon in 2020 ($/metric ton CO2, 2011 dollars) 

May 2013 November 2013 

5% average $13 $13 

3% average $46 $46 

2.5% average $69 $68 

3% 95th percentile $138 $137 

 

1

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

2

http://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-forregulator-impact-analysis.pdf 
The revised estimates do not impact the RIA’s primary conclusion that the EGU New Source 

GHG Standards will have negligible costs and no quantified benefits. Additionally, the EPA 

reviewed the sensitivity analyses conducted for the RIA and found that the impact of the SCC 

adjustments is minor. In these sensitivity analyses, we compare the per-Megawatt hour (MWh) 

cost to the per-MWh climate and health benefits of generation using different fuel types. As a 

result of the SCC revision, the total per-MWh benefits reported decreased by one dollar for 

certain values reported. However, these adjustments do not change the conclusions of these 

analyses. 

We strive to assess the costs and benefits of regulations based on the best information 

available. Accordingly, we currently plan to use the revised SCC values in the RIA for the final 

EGU New Source GHG Standards. We request comment on the revised estimates and on the 

approach used to develop the estimates, which has not changed since the interagency group 

first published estimates in 2010.3 

References 

Anthoff, D. and Tol, R.S.J. 2013a. The uncertainty about the social cost of carbon: a 

decomposition analysis using FUND. Climatic Change 117: 515–530. 

 

3

 The February 2010 SCC TSD provides a complete discussion of the approach used to develop the interagency SCC 

estimates. This TSD is available at: http://www.whitehouse.gov/sites/default/files/omb/inforeg/foragencies/Social-Cost-of-Carbon-for-RIA.pdf