Thursday, December 15, 2022

Topic: Policy
Content Type: Opinion
Keywords: environment, climate, EPA, CO2, Social Cost of Carbon

Policy for the Experts or for the People?

Woe to anyone who tries to dig into this new EPA Social Cost of Carbon regulation (see previous post for background). While it's an effort to bring scientific rigor to an important policy, it is the very definition of byzantine. It is the culmination of hundreds of academic studies by thousands of researchers, marshaled by other researchers, bureaucrats, and activists to generate a single number that carries a titanic amount of underlying meaning.

The SCC calculation comprises many steps but, in summary, the objective is to use current projections of the harm that researchers expect will be done to the globe economically and divide that by the total amount of CO2, researchers expect will be emitted. This produces a cost per ton of CO2. Then economics is used to convert that dollar cost, which is incurred in the future, into today's dollars.

The National Academies created a characteristically difficult-to-parse diagram to outline the steps.

A more descriptive chart would look something like this.

Each of these steps, itself has numerous substeps, and is based on a large set of articles and research. It's not an overstatement to say that this process is inscrutable for a layman. It begs the question whether regulatory policy should be so complex that only highly, highly educated people can have any hope to understand it and critique it.

"It begs the question whether regulatory policy should be so complex that only highly, highly educated people can have any hope to understand it and critique it."

There's obviously a conflict here between having highly educated experts in their field produce the best possible answer and having policy-makers creating policy that is open to the public to be challenged and accepted democratically. It's unclear which is better, but we should acknowledge the drawbacks of each. One other drawback that's not immediately obvious to those who favor the expert approach is that experts are often ideologically motivated, their analysis isn't completely objective, nor is it subjected to rigorous skepticism and criticism from other experts who are subject to the same biases.

"Experts are often ideologically motivated, their analysis isn't completely objective, nor is it subjected to rigorous skepticism and criticism from other experts who possess the same biases."

Also, the bureaucrats designing the policy are themselves ideologically motivated, which causes them to favor research that matches their priors and pre-determined preferences. This leads to a multiplier effect that amplifies and enshrines incorrect conclusions.