Thursday, March 06, 2014

EPA Run Amuck (Social Cost of Carbon) : Billions for A Fantasy

Government figures for the Social Cost of Carbon (SCC) are at best corrupt and at the worst dangerous as they seek to change the lives of the entire population of our nation through manipulation of the accounting figures and out right lies to accomplish the "fundamental" change prophesied by our maximum leader, Mr Obama, before the 2008 election.

To believe anything that our government say as fact will only hasten our demise. The progressive socialist liberal democrats are not in power to solve our problems, but are dedicated to make the problems worse. They believe they can accomplish their goal of transformation easier if the country in in chaos.

Never forget what Rohm Emanuel, former chief of staff for Mr Obama said about taking advantages of a bad situation, "never let a crisis go to waste" as he believed the progressive democrats could use the chaos to get things they wanted done that they might never be able to accomplish otherwise.

The fact that there isn't any man-made global warming or climate change and yet billions are spent to eradicate it, speaks volumes about the intelligence of the congress and a majority of the American population, to say nothing about the unelected EPA that rights it's own laws. If you're not scared now you should be.

The Social Cost of Carbon: A Made-Up Figure
Source: Marlo Lewis, "The Social Cost of Carbon," Capital Research Center, February 2014.

March 5, 2014

The social cost of carbon (SCC) measures how much damage is done to society by an additional ton of carbon dioxide (CO2) emissions. It is a cost estimate, and as such, it is factored into the required cost-benefit analysis of any regulation that would affect emissions.

A high enough SCC means that nearly any regulation that seeks to reduce CO2 will appear justified under cost-benefit analysis. The SCC serves to justify and legitimize cap-and-trade, carbon taxes, wind power mandates and green subsidies, says Marlo Lewis, a senior fellow at the Competitive Enterprise Institute.

There has been a 17-year pause in global warming, and climate model projections and actual observations have continued to diverge over the years. On average, climate models overshot warming of the past 15 years by 300 percent, and climate studies indicate that today's climate is better than earlier models had predicted. As such, shouldn't the Obama administration's SCC estimates be lower today than they were four years ago?
  • In fact, the SCC estimate has only gone up.
  • Its 2010 SCC estimates for the year 2020 were $6.80, $26.30, $41.70 and $80.70, while its 2013 estimates for that same year were $12, $43, $65 and $129.
Cato Institute climatologist Chip Knappenberger chalks the higher numbers up to nothing more than political calculation.To raise the SCC, analysts use a low discount rate (the rate that helps to calculate the present value of a future sum). By using a low discount rate, the value of CO2 damages and the SCC is much greater.
  • The Obama administration used discount rates of 2.5 percent, 3 percent and 5 percent in its 2010 and 2013 analyses. For example, in 2013, it found that a 5 percent discount rate produces an $11 per ton SCC, while a 2.5 percent rate produces a $52 per ton SCC.
  • The Office of Management and Budget, however, instructs agencies to use discount rates of both 7 percent and 3 percent. What would have happened if the administration had used the 7 percent rate? The SCC estimate would have fallen by more than 80 percent.
The Environmental Protection Agency uses a global SCC number (rather than a domestic one) for its cost-benefit analysis. The global SCC estimate for 2010 was $33 per ton, but the domestic impact was only $2 to $8 per ton.

By using the global number, the regulations can pass a cost-benefit test, even though Americans suffer a net loss with $25 in compliance costs. According to Cato Institute calculations, there is actually no way that a domestic carbon-reduction scheme could pass a cost-benefit test.

In short, SCC analysis makes cheap power, such as coal, look unaffordable while it makes expensive power, such as wind, appear well worth the costs.
 

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