The WSJ Wouldn’t Print This Response to Its Social Cost of Carbon Editorial
Editor’s Note: The author submitted this piece to the Wall Street Journal as a letter to the editor in response to that paper’s misguided editorial on the social cost of carbon published on Feb. 14. The Wall Street Journal declined to publish this letter.
This paper’s recent editorial inappropriately maligns the federal government’s valuation of the harm caused by climate pollution as politically motivated.
In truth, the federal government based that valuation — called the social cost of carbon — on science and followed relevant guidance and precedent. The valuation was developed by experts with a range of views on the urgency of reducing climate-warming emissions. One of those experts won the Nobel Prize in economics for that work. Another now serves as the Milton Friedman Distinguished Service Professor in Economics at the University of Chicago.
On what basis does the editorial board reject this expert work? It begins by questioning the idea of valuing climate damages at all, stating that “[s]ome argue carbon emissions have a net benefit.” Some also argue that the earth is flat, but NASA doesn’t ask them for input on exploring space. Federal policy should incorporate the best available research.
So where has research led? For one, there is a voluminous empirical literature supporting low discount rates over long time horizons. Yet the editorial claims that the social cost of carbon should adopt a 7% discount rate, even though that would almost entirely devalue effects on future generations. The editorial also incorrectly states that regulators may only use a 7% discount rate. Circular A-4, the George W. Bush-era guidance document the editorial claims the social cost valuations violate, also calls for a default 3% discount rate and lower rates for intergenerational impacts like climate change.
Expert research also finds that the United States derives substantial strategic benefit from considering climate impacts beyond its own borders. This is due to both our geopolitical and military interests, and the fact that emission reductions at home spur reciprocal reductions abroad. Circular A-4 does not instruct agencies to disregard effects beyond the nation’s borders, as the editorial claims, and agencies often consider foreign impacts. In fact, multiple federal courts have backed global damage valuations for climate impacts.
Finally, while the editorial applauds a recent federal court decision that rejected the expert social cost of carbon valuations used by federal agencies, that decision has been widely criticized by legal commentators for misapplying administrative and constitutional law. One prominent conservative legal academic called it a “mess.”
It’s not the federal government that cherry-picked its evidence to reach an unsupported conclusion, but rather this paper’s misguided editorial.
