WHATEVER HAPPENED TO THAT TRANSPARENCY WE WERE PROMISED?:

The Social Cost of Carbon: A requirement for cost/benefit analyses of federal rules has created — without any real public input — a very important number in deciding what to do about greenhouse gases. (Judith D. Schwartz, 2/15/11, Miller McCune)

It is, says economist Frank Ackerman, “the most important number you’ve never heard of.”

The social cost of carbon, or SCC, is the value in today’s dollars of the stream of damages caused by adding one metric ton of CO2 into the atmosphere; a ton is the amount a typical family car will emit every 10 weeks. The SCC figure adopted last February by an interagency working group is $21. The value has already been applied to standards for fuel efficiency and tailpipe emissions. It will be figured into any carbon mitigation strategy, whether cap and trade, cap and dividend or carbon tax.

Why is this particular number so important? It establishes “how much you should be willing to spend to get rid of a ton of CO2,”said to Robert O. Mendelsohn, the Edwin Weyerhaeuser Davis Professor of Forest Policy at the Yale School of Forestry and Environmental Studies. A high SCC tells regulators and decision makers that removing one ton of CO2 from the atmosphere has significant value. A low SCC justifies doing nothing — or at most very little.

Here’s the catch: that $21 — roughly 18 cents per gallon of gas — has slipped into our regulatory apparatus unannounced and without public debate.

“A decision was made through the interagency task force with almost no one knowing that it was happening,” says Ackerman, who works with the Stockholm Environmental Institute and is based at Tufts University. “There’s no office that claims credit, no website that explains anything about it. This crucial number, which turns out to be the fulcrum for climate policy, was decided in secret by a task force with no names attached to it.”

The working group determining the SCC did see participation by executive branch entities including the Council of Economic Advisers, the Office of Management and Budget, the Council on Environmental Quality, National Economic Council, Office of Energy and Climate Change, and Office of Science and Technology Policy. Agencies that actively participated included the Environmental Protection Agency and the departments of Agriculture, Commerce, Energy, Transportation and Treasury — but no outside organizations.

Jonathan Masur, a professor at the University of Chicago Law School, co-authored a legal study on climate regulation and cost-benefit analyses when he stumbled upon the fact that “the government is in effect regulating carbon” through the SCC. He says that in presenting the paper, “very few audiences have heard of the social cost of carbon report, even in the academic community.”

He says “the sensible thing to do would be to have a national discussion on how to price carbon,” but he wonders if the Obama administration deems this discussion “politically impossible or politically dangerous.”