Investing.com -- The White House project to make the so-called "social cost of carbon" the basis for all environmental regulation has been a "rousing failure," according to a review of the policy by the noted legal scholar Richard Epstein.
Epstein is a professor of law at the University of Chicago, and a fellow at the Hoover Institution at Stanford University, a leading think tank.
Writing in the Hoover Institution's Defining Ideas journal, in a piece published on Dec. 20, Epstein noted that during the first term of the Obama administration, the White House regulatory office convened an interagency working group (IWG) drawn from a number of federal agencies that ruled that the social cost of carbon (SCC)—or the marginal cost of the release of a ton of carbon into the atmosphere—should be estimated at about $36 per ton.
This was based exclusively on computer models, and did not incorporate any empirical cost-benefit analysis.
"Their effort should be dismissed as a rousing failure, and as an affront to the scientific method that they purport to adopt in their studies," writes Epstein. The major mistake in methodology of the "the government studies is the way in which they frame the social costs of carbon. As all champions of cost/benefit analysis understand, it is a mistake to look at costs in isolation from benefits, or benefits apart from costs. Yet that appears to be the approach taken in these reports. In dealing with various objections to its reports, the IWG noted in its July 2015 study that 'some commenters felt that the SCC estimates should include the value to society of the goods and services whose production is associated with CO2 emissions.'"
Epstein notes that the authors of the study, Professors Michael Greenstone and Cass Sunstein, lobbied incoming President Trump that the social costs of carbon, but not the benefits, should be weighed when making global warming policy, in a recent op/ed in The New York Times.
Social benefits of carbon include, but are not limited to, planes, trains, automobiles, and jobs in industries that support them, or depend upon them, for example.
" The sorry truth is that the EPA and the regulatory process in the Obama administration show no respect for the scientific method," writes Epstein, one of the leading public intellectuals in the U.S.