Analysis Regarding Energy Efficiency Improvements in the 2021 International Energy Conservation Code (IECC)

Citation86 FR 40529
Record Number2021-15969
Published date28 July 2021
SectionNotices
CourtEnergy Department
Federal Register, Volume 86 Issue 142 (Wednesday, July 28, 2021)
[Federal Register Volume 86, Number 142 (Wednesday, July 28, 2021)]
                [Notices]
                [Pages 40529-40534]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2021-15969]
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                DEPARTMENT OF ENERGY
                [EERE-2021-BT-DET-0010]
                Analysis Regarding Energy Efficiency Improvements in the 2021
                International Energy Conservation Code (IECC)
                AGENCY: Office of Energy Efficiency and Renewable Energy, Department of
                Energy.
                ACTION: Notice of determination.
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                SUMMARY: The U.S. Department of Energy (DOE) has reviewed the 2021
                International Energy Conservation Code (IECC) and determined the
                updated edition would improve energy efficiency in buildings subject to
                the code. DOE analysis indicates that buildings meeting the 2021 IECC,
                as compared with buildings meeting the 2018 IECC, would result in
                national site energy savings of 9.38 percent, source energy savings of
                8.79 percent, and energy cost savings of approximately 8.66 percent of
                residential building energy consumption. Upon publication of this
                affirmative determination, each State must certify that it has reviewed
                the energy efficiency provisions of its residential building code and
                made a determination whether it is appropriate to revise the code to
                meet or exceed the updated edition of the IECC. Additionally, this
                notice provides guidance on State code review processes and associated
                certifications.
                DATES: Certification statements provided by States shall be submitted
                by July 28, 2023.
                ADDRESSES: A copy of the supporting analysis, as well as links to the
                Federal docket and public comments received, are available at: https://www.energycodes.gov/development/determinations.
                 Certification Statements must be addressed to the Building
                Technologies Office--Building Energy Codes Program Manager, U.S.
                Department of Energy, Office of Energy Efficiency and Renewable Energy,
                1000 Independence Avenue SW, EE-5B, Washington, DC 20585.
                FOR FURTHER INFORMATION CONTACT: Jeremiah Williams; U.S. Department of
                Energy, Office of Energy Efficiency and Renewable Energy, 1000
                Independence Avenue SW, EE-5B, Washington, DC 20585; (202) 441-1288;
                [email protected].
                 For legal issues, please contact Matthew Ring; U.S. Department of
                Energy, Office of the General Counsel, 1000 Independence Avenue SW, GC-
                33, Washington, DC 20585; (202) 586-2555; [email protected].
                SUPPLEMENTARY INFORMATION:
                I. Background
                II. Public Participation
                III. Determination Statement
                IV. State Certification
                I. Background
                 Title III of the Energy Conservation and Production Act (ECPA), as
                amended, establishes requirements for building energy conservation
                standards, which are administered by the DOE Building Energy Codes
                Program. (42 U.S.C. 6831 et seq.) Section 304(a), as amended, of ECPA
                provides that whenever the 1992 Council of American Building Officials
                (CABO) Model Energy Code, or any successor to that code, is revised,
                the Secretary of Energy (Secretary) must make a determination, no later
                than 12 months after such revision, whether the revised code would
                improve energy efficiency in residential buildings, and must publish
                notice of such determination in the Federal Register. (42 U.S.C.
                6833(a)(5)(A)) If the Secretary determines that the revision of the
                CABO Model Energy Code, or any successor thereof, improves the level of
                energy efficiency in residential buildings then, not later than two
                years after the date of the publication of such affirmative
                determination, each State is required to certify that it has reviewed
                its residential building code regarding energy efficiency, and made a
                determination as to whether it is appropriate to revise its code to
                meet or exceed the provisions of the successor code. (42 U.S.C.
                6833(a)(5)(B)).
                 The International Energy Conservation Code (IECC) is the
                contemporary successor to the CABO Model Energy Code specified in ECPA.
                The IECC is revised every three years through an established code
                development and consensus process administered by the International
                Code Council (ICC). As part of the ICC process, any interested party
                may submit proposals, as well as written comments or suggested changes
                to any
                [[Page 40530]]
                proposal, and make arguments before a committee of experts assembled by
                the ICC, with the collection of accepted proposals forming the revised
                edition of the IECC. More information on the ICC code development
                process is available at https://www.iccsafe.org/codes-tech-support/codes/code-development-process/code-development-2/.
                 In addition, on January 20, 2021, the President issued Executive
                Order 13990, ``Protecting Public Health and the Environment and
                Restoring Science to Tackle the Climate Crisis.'' 86 FR 7037 (Jan. 25,
                2021). The Executive Order directed DOE to consider publishing for
                notice and comment a proposed rule suspending, revising, or rescinding
                the final technical determination regarding the 2018 IECC by May 2021.
                Id. at 86 FR 7038. In response, DOE has reviewed the current 2021 IECC
                so that DOE's determination under Section 304(b) of ECPA reflects the
                most recent version of IECC, and to facilitate State and local adoption
                of the 2021 IECC, which will improve energy efficiency in the nation's
                residential buildings.
                 To meet the statutory requirement, and to satisfy the directive
                issued under Executive Order 13990, DOE issued a preliminary
                determination and published supporting analysis to quantify the
                expected energy savings associated with the 2021 IECC relative to the
                previous 2018 IECC version. Notice of this preliminary analysis was
                published in the Federal Register on May 16, 2021 (86 FR 26710), and is
                available at: https://www.regulations.gov/document/EERE-2021-BT-DET-0010-0001.
                II. Public Participation
                 In a May 16, 2021 Federal Register notice, DOE requested public
                comments on its preliminary analysis of the 2021 IECC. (86 FR 26710)
                DOE received four public comments, all of which DOE considered in
                arriving at its final determination. DOE has now issued the final
                analysis of the expected energy savings associated with the 2021 IECC
                as compared to the 2018 IECC. A summary of public comments received,
                and DOE responses, is included in Appendix A of this Notice. The final
                analysis is available at: https://www.energycodes.gov/development/determinations.
                III. Determination Statement
                 Residential buildings meeting the 2021 IECC (compared to the
                previous 2018 edition) are expected to incur the following savings on a
                weighted national average basis:
                 9.38 percent site energy savings
                 8.79 percent source energy savings
                 8.66 percent energy cost savings
                 DOE has rendered the conclusion that the 2021 IECC will improve
                energy efficiency in residential buildings, and, therefore, receives an
                affirmative determination under Section 304(a) of ECPA. States can
                experience significant benefits by updating their codes to reflect
                current construction standards, a total estimated $74.61 billion in
                energy cost savings and 424.20 MMT of avoided CO2 emissions
                in residential buildings (cumulative 2010 through 2040), or $3.24
                billion in annual energy cost savings and 18.50 MMT in annual avoided
                CO2 emissions (annually by 2030). These benefits, including
                emissions reductions, are estimated in a revised 2021 interim report
                addressing building code impacts.\1\ Though not quantified in the
                interim report, there may also be costs to regulated entities as a
                result of updated residential building codes.
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                 \1\ See https://www.pnnl.gov/main/publications/external/technical_reports/PNNL-31437.pdf for the 2021 interim code impact
                report. Financial benefits are calculated by applying historical and
                future fuel prices to site energy savings and by discounting future
                savings to 2020 dollars. Historical and future real fuel prices are
                obtained through EIA's AEO 2015 report (EIA 2015).
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                IV. State Certification
                 Upon publication of this affirmative determination, each State is
                required to review the provisions of its residential building code
                regarding energy efficiency, and determine whether it is appropriate
                for such State to revise its building code to meet or exceed the energy
                efficiency provisions of the 2021 IECC. (42 U.S.C. 6833(a)(5)(B)) This
                action must be made not later than two years from the date of
                publication of a Notice of Determination, unless an extension is
                provided.
                State Review and Update
                 The State determination must be: (1) Made after public notice and
                hearing; (2) in writing; (3) based upon findings and upon the evidence
                presented at the hearing; and (4) made available to the public. (42
                U.S.C. 6833(a)(2)) States have discretion with regard to the hearing
                procedures they use, subject to providing an adequate opportunity for
                members of the public to be heard and to present relevant information.
                The Department recommends publication of any notice of public hearing
                through appropriate and prominent media outlets, such as in a newspaper
                of general circulation. States should also be aware that this
                determination does not apply to IECC chapters specific to
                nonresidential buildings, as defined in the IECC. Therefore, States
                must certify their evaluations of their State building codes for
                residential buildings with respect to all provisions of the IECC,
                except for those chapters not affecting residential buildings. DOE
                determinations regarding earlier editions of the IECC are available on
                the DOE Building Energy Codes Program website.\2\ Further national and
                State analysis is also available.\3\
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                 \2\ Available at https://www.energycodes.gov/regulations/determinations/previous.
                 \3\ Available at https://www.energycodes.gov/development/residential/iecc_analysis.
                _____________________________________-
                State Certification Statements
                 State certifications are to be sent to the address provided in the
                ADDRESSES section, or may be submitted to
                [email protected], and must be submitted in accordance
                with the deadline identified in the DATES section. If a State makes a
                determination that it is not appropriate to revise the energy
                efficiency provisions of its residential building code, the State must
                submit to the Secretary, in writing, the reasons for this
                determination, which shall be made available to the public. (42 U.S.C.
                6833(a)(4))
                 The DOE Building Energy Codes Program tracks and reports State code
                adoption and certifications.\4\ Once a State has adopted an updated
                residential code, DOE typically provides software, training, and
                support for the new code, as long as the new code is based on the
                national model code (i.e., the 2021 IECC). DOE has issued previous
                guidance on how it intends to respond to technical assistance requests
                related to implementation resources, such as building energy code
                compliance software. (79 FR 15112) DOE is directed to provide incentive
                funding to States to implement the requirements of Section 304, and to
                improve and implement State residential and commercial building energy
                efficiency codes, including increasing and verifying compliance with
                such codes. (See 42 U.S.C. 6833(e)) Some States develop their own codes
                that are only loosely related to the national model codes, and DOE does
                not typically provide technical support for those codes. DOE does not
                prescribe how each State adopts and enforces its energy codes.
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                 \4\ Available at https://www.energycodes.gov/adoption/states.
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                Requests for Extensions
                 Section 304(c) of ECPA requires that the Secretary permit an
                extension of the deadline for complying with the certification
                requirements described previously, if a State can demonstrate that it
                has made a good faith effort to
                [[Page 40531]]
                comply with such requirements, and that it has made significant
                progress toward meeting its certification obligations. (42 U.S.C.
                6833(c)) Such demonstrations could include one or both of the
                following: (1) A substantive plan for response to the requirements
                stated in Section 304; or (2) a statement that the State has
                appropriated or requested funds (within State funding procedures) to
                implement a plan that would respond to the requirements of Section 304
                of ECPA. This list is not exhaustive. Requests are to be sent to the
                address provided in the ADDRESSES section, or may be submitted to
                [email protected].
                Appendix A
                 DOE accepted public comments on the Notice of Preliminary
                Determination for the 2021 IECC until June 16, 2021, and received
                submissions from a total of 4 commenters. Responsive public comments
                and associated DOE answers are described as follows. DOE received
                comments on its preliminary determination and supporting analysis of
                the 2021 IECC from the following stakeholders:
                 North American Insulation Manufacturers Association (NAIMA)
                 Responsible Energy Code Alliance (RECA)
                 Edison Electric Institute (EEI)
                 Air-Conditioning, Heating and Refrigeration Institute
                (AHRI)
                 The comments are summarized as follows and are available at
                https://www.regulations.gov/document/EERE-2021-BT-DET-0010-0001/comment. DOE responded to all comments received. Several issues
                raised by commenters are distinct from the energy efficiency
                analysis DOE has undertaken pursuant to its statutory obligations.
                These include the social cost of carbon, life-cycle cost, and cost
                effectiveness; among these issues, social cost of carbon garnered
                the most attention from commenters and is therefore emphasized in
                the responses below.
                North American Insulation Manufacturers Association (NAIMA)
                 Comment: NAIMA requested that DOE use the updated climate zone
                designations in the 2021 IECC and not 2018 IECC. DOE's preliminary
                analysis appears to leave out impact of the 2021 IECC climate zone
                designations in numerous counties across the United States. This
                shortfall could lead to an overestimation of the energy savings
                associated with the 2021 IECC.
                 DOE Response: DOE acknowledges that the residential provisions
                of the 2021 IECC incorporate several administrative changes
                introduced by the 2013 edition of ASHRAE Standard 169, Climatic Data
                for Building Design Standards (ASHRAE 2013a). ASHRAE 169-2013
                redefined climate zones and moisture regimes based on recent weather
                data. As a result, a number of U.S. counties were reassigned to
                different zones/regimes, and a new, extremely hot Climate Zone 0 was
                added. (The addition of Climate Zone 0 has no impact on DOE's
                analysis, since it does not occur in the U.S.) Approximately 400
                U.S. counties out of more than 3,000 were reassigned, most to warmer
                climate zones. However, the reassignment of localities is considered
                an administrative action, based on long-established definitions of
                heating degree days and cooling degree days, and is handled
                consistently with how similar climate zone updates have been handled
                by previous DOE model energy code determinations. DOE also notes
                that the reassignment of climate zones is expected to occur in the
                future, based on updated weather and climate data, and associated
                updates to ASHRAE Standard 169.
                 Comment: NAIMA requested that DOE produce the equivalent cost-
                effectiveness document for the 2021 IECC as rapidly as possible
                after the publication of the final 2021 IECC determination.
                Additionally, NAIMA requested that DOE perform this analysis with a
                variety of down payment amounts to show cost-effectiveness with
                typical range of loans--a 0% down loan, a 10% down loan, and a 20%
                down loan.
                 DOE Response: In making its determination, DOE's directive under
                ECPA is to assess whether updated editions of the 2021 IECC would
                improve energy efficiency in residential buildings. Concepts such as
                life-cycle cost and cost effectiveness represent economic analysis
                and are therefore unique from energy efficiency analysis. However,
                DOE recognizes the value of such analysis in informing State and
                local decisions surrounding code review and update processes, as
                well as design decisions associated with specific buildings and
                systems. Distinct from its determination directive under ECPA, DOE
                provides a variety of additional analysis, including cost-
                effectiveness analysis. The established DOE methodology is currently
                designed around a single typical home mortgage scenario, and not
                multiple down payment scenarios, as requested by NAIMA. However, DOE
                will consider expanding its analysis in the future to further study
                a range of financing scenarios, including those experienced by low
                and moderate income (LMI) households.
                Responsible Energy Codes Alliance (RECA)
                 Comment: RECA's first comment recommended that the DOE take
                actions to encourage, and provide additional support for, States and
                cities to adopt and implement the 2021 IECC in the months and years
                ahead.
                 DOE response: DOE is directed under ECPA to provide technical
                assistance supporting the implementation of building energy codes.
                Consistent with this directive, DOE intends to continue providing
                robust technical assistance supporting State and local
                implementation of buildings energy codes. DOE recognizes the
                importance of supporting the States and local governments who
                ultimately adopt and implement codes, as well as the wide range of
                industry stakeholders who rely upon energy codes and strive to
                achieve compliance in practice.
                 Comment: RECA's second comment stated that RECA agrees with and
                supports the methodology and conclusion in the preliminary analysis.
                 DOE response: DOE appreciates the support.
                 Comment: RECA's third comment recommended that DOE should
                implement the 2021 IECC into REScheck.
                 DOE response: DOE intends to support the implementation of the
                2021 IECC into REScheck in the future.
                 Comment: RECA's fourth comment recommended that DOE remove pre-
                2015 IECC versions from REScheck.
                 DOE response: In maintaining its compliance resources, such as
                the REScheck software \5\, DOE typically supports the three most
                recent editions of the model codes. (79 FR 15112) Following the
                current determination, this is anticipated to include the 2021, 2018
                and 2015 editions of the IECC. DOE intends to maintain consistency
                with this approach.
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                 \5\ REScheck is a software tool developed and maintained by DOE
                for the purpose of verifying compliance in residential buildings.
                See https://www.energycodes.gov/rescheck.
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                 Comment: RECA's fifth comment recommended that DOE provide cost-
                effectiveness analysis.
                 DOE response: As outlined in previous responses, DOE notes that
                the current determination is focused on whether the 2021 IECC would
                improve energy efficiency in residential buildings. However, DOE
                recognizes the value of additional forms of technical analysis
                supporting building energy codes, and intends to continue to provide
                both national and State-level cost-effectiveness analysis of the
                2021 IECC in the future.
                 Comment: RECA's sixth comment recommended that DOE provide
                State-level energy and cost analyses.
                 DOE response: Consistent with the previous comment response, DOE
                intends to provide State-level energy and cost analyses in the
                future.
                 Comment: RECA's seventh comment recommended that DOE provide
                implementation support for the 2021 IECC.
                 DOE response: Consistent with previous comment responses, DOE
                intends to continue providing robust support for States and local
                governments implementing building energy codes. DOE intends to
                provide additional resources supporting the 2021 IECC implementation
                in the future.
                Edison Electric Institute (EEI)
                 Comment: EEI's first comment stated that the EPA greenhouse gas
                equivalencies calculator overstates the emissions impact.
                 DOE response: As outlined in previous responses, DOE notes that
                the current determination is focused solely on whether the revised
                Standard would improve energy efficiency in residential buildings,
                and CO2 savings were not considered as part of DOE's
                ultimate determination of whether the revised Standard will improve
                energy efficiency. DOE is reporting estimated CO2 savings
                only because it recognizes the value of additional forms of
                technical analysis supporting State implementation of building
                energy codes, including emissions analyses. DOE relies on greenhouse
                gas emission coefficients established by the Environmental
                Protection Agency (EPA) in estimating current year CO2
                savings. EPA's emission coefficients are designed to reflect
                marginal
                [[Page 40532]]
                CO2 savings from electricity savings occurring on the
                building site, which DOE considers appropriate for estimating and
                communicating the carbon savings stemming from an improved energy
                code. This approach is consistent with how DOE has performed similar
                calculations in previous determinations.
                 Comment: EEI's second comment recommended that DOE's
                determination should take into account the commitments utilities
                have made to reduce carbon emissions.
                 DOE response: As outlined in previous responses, DOE notes that
                the current determination is focused solely on whether the revised
                Standard would improve energy efficiency in residential buildings,
                and CO2 savings were not considered as part of DOE's
                ultimate determination of whether the revised Standard will improve
                energy efficiency. DOE is reporting estimated CO2 savings
                only because it recognizes the value of additional forms of
                technical analysis supporting State implementation of building
                energy codes, including emissions analyses. DOE's analysis is based
                on several metrics; energy cost, site energy, and source energy. In
                addition, DOE reports carbon emissions on a first-year basis. DOE
                recognizes the progress being made by utilities in decarbonizing the
                electric grid, and emphasizes that estimates provided in the
                supporting technical analysis are based on current emission levels
                and are subject to change in the future.
                Air-Conditioning, Heating, and Refrigeration Institute (AHRI)
                 Comment: AHRI, p. 2-5. AHRI commented that historically DOE did
                not estimate emission reductions or apply a value to emission
                reductions as part of the results and basis for the determination.
                They further stated that including emission reductions or their
                value, including the SC-CO2, as part of the basis for
                determination was outside DOE's authority to consider (42 U.S.C.
                6833(a)(5)), because EPCA is an energy conservation statute and
                excludes environmental objectives (see 42 U.S.C. 6312 which excludes
                environmental objectives), and that DOE does not have the statutory
                authority to consider greenhouse gas estimates in determination of
                residential building codes. AHRI opined that the SC-CO2
                should only be included for rulemakings where DOE has clear
                statutory authority to do so and stated that it lacks such statutory
                authority as to building energy codes.
                 DOE response: In making its determination, DOE's directive under
                ECPA is to assess whether updated editions of the IECC would improve
                energy efficiency in residential buildings. 42 U.S.C. 6833(b)(2)(A)
                DOE emphasizes that the estimates pertaining to CO2 are
                provided as supplemental information only and were not considered as
                part of DOE's final determination, which is based on energy
                efficiency as required under 42 U.S.C. 6833(5)(A). Climate benefits
                associated with the expected CO2 emissions reductions are
                monetized using estimates of the social cost of carbon presented in
                the Technical Support Document: Social Cost of Carbon, Methane, and
                Nitrous Oxide Interim Estimates under Executive Order 13990 (IWG
                2021). DOE is reporting estimates related to CO2 only
                because information on the carbon emissions associated with
                buildings are valued by many stakeholders, including States and
                local governments who ultimately implement building codes, and who
                have expressed a need for this information. These estimates are not
                considered as part of DOE's ultimate determination of whether the
                updated IECC will improve energy efficiency.
                 Comment: AHRI, p. 2, 5. AHRI stated that DOE is ignoring clear
                congressional intent in including emissions in the narrowly scoped
                building energy code review defined in the statutory text (42 U.S.C.
                6833(b)(1)). AHRI further stated that congress could have added
                global climate change into a variable to weigh in the determination,
                but did not do so and so DOE should not include this in the
                determination.
                 DOE Response: See response to previous AHRI comment.
                 Comment: AHRI, p. 2. AHRI requested that DOE remove carbon
                emissions from the determination for building energy codes,
                including the 2021 IECC.
                 DOE Response: See response to previous AHRI comment.
                 Comment: AHRI p. 2. Irrespective of the authority consideration,
                AHRI requested that DOE must act to remedy inaccurate assumptions
                and conclusions on the social cost of carbon benefits analysis. AHRI
                opined that the benefits claimed from full fuel cycle and global
                impact of emissions and SC-CO2 are speculative and
                tangential and that these are calculated over a time period (100
                years) that greatly exceeds that used to measure economic costs.
                 DOE Response: In making its determination, DOE's directive under
                ECPA is to assess whether updated editions of the IECC would improve
                energy efficiency in residential buildings. 42 U.S.C. 6833(b)(2)(A)
                DOE emphasizes that the estimates pertaining to CO2 are
                provided only as supplemental information and are not considered as
                part of the final determination, which is based on energy efficiency
                as required under 42 U.S.C. 6833(b)(2)(A).
                 In calculating related CO2 impacts, DOE used the
                estimates for the SC-CO2 from the most recent update of
                the Interagency Working Group on Social Cost of Greenhouse Gases,
                United States Government (IWG), from ``Technical Support Document:
                Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates
                under Executive Order 13990.'' (February 2021 TSD). DOE has
                determined that the estimates from the February 2021 TSD, as
                described more below, are based upon sound analysis and provide well
                founded estimates for DOE's analysis of the impacts of
                CO2 related to the reductions of emissions from updating
                the IECC to the 2021 edition.
                 These SC-CO2 estimates are interim values developed
                under Executive Order (E.O.) 13990 for use until an improved
                estimate of the impacts of climate change can be developed based on
                the best available science and economics. The SC-CO2
                estimates used in this analysis were developed over many years,
                using a transparent process, peer-reviewed methodologies, the best
                science available at the time of that process, and with input from
                the public. Specifically, an interagency working group (IWG) that
                included the EPA and other executive branch agencies and offices
                used three integrated assessment models (IAMs) to develop the SC-
                CO2 estimates and recommended four global values for use
                in regulatory analyses. The SC-CO2 estimates were first
                released in February 2010 and updated in 2013 using new versions of
                each IAM. In 2015, as part of the response to public comments
                received to a 2013 solicitation for comments on the SC-
                CO2 estimates, the IWG announced a National Academies of
                Sciences, Engineering, and Medicine review of the SC-CO2
                estimates to offer advice on how to approach future updates to
                ensure that the estimates continue to reflect the best available
                science and methodologies. In January 2017, the National Academies
                released their final report, Valuing Climate Damages: Updating
                Estimation of the Social Cost of Carbon Dioxide, and recommended
                specific criteria for future updates to the SC-CO2
                estimates, a modeling framework to satisfy the specified criteria,
                and both near-term updates and longer term research needs pertaining
                to various components of the estimation process (National Academies
                2017). On January 20, 2021, President Biden issued Executive Order
                13990, which directed the IWG to ensure that the U.S. Government's
                (USG) estimates of the social cost of carbon and other greenhouse
                gases reflect the best available science and the recommendations of
                the National Academies (2017). The IWG was tasked with first
                reviewing the estimates currently used by the USG and publishing
                interim estimates within 30 days of E.O. 13990 that reflect the full
                impact of GHG emissions, including taking global damages into
                account.\6\ The interim SC-CO2 estimates published in
                February 2021 are used here to estimate the climate benefits
                associated with this determination.
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                 \6\ The E.O. instructs the IWG to undertake a fuller update of
                the SC-GHG estimates by January 2022.
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                 DOE acknowledges that there are a number of challenges in
                attempting to assess the incremental economic impacts of
                CO2 emissions. The science and economic understanding of
                climate change and its impacts is improving over time; research
                focused on the assessment of climate damages and socioeconomic
                emissions projections is particularly important for reducing
                uncertainty in the calculation of the social cost of greenhouse
                gases (SC-GHG),\7\
                [[Page 40533]]
                as is quantifying and being transparent about where key
                uncertainties in the models remain. But contrary to AHRI's
                suggestion that uncertainty should cause DOE to discount or abandon
                monetization of the social benefits of reducing CO2
                emissions, as IWG has stated, due to a number of sources of
                uncertainty, there is a likelihood that the SC-CO2 is an
                underestimate of the true social cost of emissions.\8\ Despite the
                limits of both quantification and monetization, SC-CO2
                estimates can be useful in estimating the social benefits of
                reducing CO2 emissions. As a result, DOE has used the
                IWG's SC-CO2 estimates in monetizing the social benefits
                of reducing CO2 emissions. However, as discussed in
                previous comments, DOE's SC-CO2 analysis using these
                estimates was not considered in DOE's ultimate determination of
                whether the 2021 IECC Standard will improve energy efficiency.
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                 \7\ The social cost of greenhouse gases (SC-GHG) is the monetary
                value of the net harm to society associated with adding a small
                amount of that GHG to the atmosphere in a given year and, therefore,
                should reflect the societal value of reducing emissions of the gas
                in question by one metric ton. The marginal estimate of social costs
                will differ by the type of greenhouse gas (such as carbon dioxide,
                methane, and nitrous oxide) and by the year in which the emissions
                change occurs. The estimates of the social cost of carbon (SC-
                CO2), social cost of methane (SC-CH4), and
                social cost of nitrous oxide (SC-N2O) published in the
                February 2021 TSD allow agencies to understand the social benefits
                of reducing emissions of each of these greenhouse gases, or the
                social costs of increasing such emissions, in the policy making
                process. Collectively, these values are referenced as the ``social
                cost of greenhouse gases'' (SC-GHG).
                 \8\ See Interagency Working Group on Social Cost of Greenhouse
                Gases, Technical Support Document: Social Cost of Carbon, Methane,
                and Nitrous Oxide. Interim Estimates Under Executive Order 13990,
                Washington, DC, February 2021.
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                 Comment: AHRI p. 2,3. As part of the rationale for not including
                SC-CO2, AHRI further commented that DOE has acknowledged
                the uncertainty of SC-CO2 estimates and stated that these
                are both provisional and revisable. Further, they noted that the
                interagency working group developing the SC-CO2 noted
                that the underlying models were imperfect and incomplete and notes
                that the intergovernmental panel on climate change (IPCC) which the
                IWG relied on also stated in 2013 that no best estimate for
                equilibrium climate sensitivity could then be given because of the
                lack of agreement on values across assessed lines of evidence and
                studies.
                 DOE Response: In making its determination, DOE's directive under
                ECPA is to assess whether updated editions of the IECC would improve
                energy efficiency in residential buildings. 42 U.S.C. 6833(b)(2)(A)
                DOE emphasizes that the estimates pertaining to CO2 are
                provided only as supplemental information and are not considered as
                part of the final determination, which is based on energy efficiency
                as required under 42 U.S.C. 6833(b)(2)(A).
                 As noted above, DOE determined that the estimates from the
                February 2021 TSD are based upon sound analysis and provide well
                founded estimates for DOE's analysis of the impacts of
                CO2 related to the reductions of emissions from updating
                the 90.1 Standard to the 2019 edition. As explained in the February
                2021 TSD and while the IWG works to assess how best to incorporate
                the latest, peer reviewed science to develop an updated set of SC-
                GHG estimates, the IWG has determined that it is appropriate for
                agencies to revert to the same set of four values drawn from the SC-
                GHG distributions based on three discount rates as were used in
                regulatory analyses between 2010 and 2016 and subject to public
                comment. For each discount rate, the IWG combined the distributions
                across models and socioeconomic emissions scenarios (applying equal
                weight to each) and then selected a set of four values for use in
                benefit-cost analyses: An average value resulting from the model
                runs for each of three discount rates (2.5%, 3%, and 5%), plus a
                fourth value, selected as the 95th percentile of estimates based on
                a 3 percent discount rate. The fourth value was included to provide
                information on potentially higher-than-expected economic impacts
                from climate change, conditional on the 3% estimate of the discount
                rate. As explained in the February 2021 TSD, this update reflects
                the immediate need to have an operational SC-GHG for use in
                regulatory benefit-cost analyses and other applications that was
                developed using a transparent process, peer-reviewed methodologies,
                and the science available at the time of that process. Those
                estimates were subject to public comment in the context of dozens of
                proposed rulemakings as well as in a dedicated public comment period
                in 2013. However, as discussed in previous comments, DOE's SC-
                CO2 analysis using these estimates was not considered in
                DOE's ultimate determination of whether the 2021 IECC Standard will
                improve energy efficiency.
                 Comment: AHRI, p. 3,5. AHRI commented that EPCA's focus is on
                benefits accruing with this nation, hence incorporation of SC-
                CO2 at the global level is beyond the scope and authority
                of DOE. See 42 U.S.C. 6833(a)(1-5). They further noted that EPCA
                originally arose out of the 1970's oil embargo and that nothing in
                the subsequent amendments suggests a different statutory focus other
                than improving the energy economic within the United States. AHRI
                notes that DOE analyzes expected national [domestic] energy savings,
                but does not scale back reported SC-CO2 calculations to
                reflect domestic impacts only.
                 DOE Response: In making its determination, DOE's directive under
                ECPA is to assess whether updated editions of the IECC would improve
                energy efficiency in residential buildings. 42 U.S.C. 6833(b)(2)(A)
                DOE emphasizes that the estimates pertaining to CO2 are
                provided only as supplemental information and are not considered as
                part of the final determination, which is based on energy efficiency
                as required under 42 U.S.C. 6833(b)(2)(A).
                 As to the use of a SC-CO2 value that includes impacts
                outside the boundaries of the United States, the February 2021 TSD
                provides a complete discussion of the IWG's initial review conducted
                under E.O. 13990. In particular, the IWG found that a global
                perspective is essential for SC-GHG estimates because climate
                impacts occurring outside U.S. borders can directly (and indirectly
                affect the welfare of U.S. citizens and residents. Thus, U.S.
                interests are affected by the climate impacts that occur outside
                U.S. borders. Examples of affected interests include: Direct effects
                on U.S. citizens and assets located abroad, international trade, and
                tourism, and spillover pathways such as economic and political
                destabilization and global migration. In addition, assessing the
                benefits of U.S. GHG mitigation activities requires consideration of
                how those actions may affect mitigation activities by other
                countries, as those international mitigation actions will provide a
                benefit to U.S. citizens and residents by mitigating climate impacts
                that affect U.S. citizens and residents. Therefore, in this analysis
                DOE centers attention on a global measure of SC-GHG.
                 As noted above, DOE determined that the estimates from the
                February 2021 TSD are based upon sound analysis, and therefore, in
                analyzing the impacts of CO2 related to the reductions of
                emissions from updating the 90.1 Standard to the 2019 edition, DOE
                has focused on a global measure of SC-CO2. As noted in
                the February 2021 TSD, the IWG will continue to review developments
                in the literature, including more robust methodologies for
                estimating SC-GHG values based on purely domestic damages, and
                explore ways to better inform the public of the full range of carbon
                impacts, both global and domestic. As a member of the IWG, DOE will
                likewise continue to follow developments in the literature
                pertaining to this issue. However, as discussed in previous
                comments, DOE's SC-CO2 analysis using these estimates was
                not considered in DOE's ultimate determination of whether the 2021
                IECC Standard will improve energy efficiency.
                 Comment: AHRI, p.3,4. AHRI stated that DOE wrongly assumes that
                SC-CO2 values increase over time in real dollars and states that
                this is contrary to ``historical experience and to economic
                development science'' and that the more economic development that
                occurs, the more adaptation and mitigation efforts a population
                living in a growing economy can afford to undertake (AHRI cites the
                IWG indicating that developed countries can eliminate 90% of the
                economic impacts and developing countries could eventually eliminate
                50% of the economic impacts of climate change). They comment that
                they see no indication that DOE considered this separately.
                 DOE Response: In making its determination, DOE's directive under
                ECPA is to assess whether updated editions of Standard 90.1 would
                improve energy efficiency in commercial buildings. 42 U.S.C.
                6833(b)(2)(A) DOE emphasizes that the estimates pertaining to
                CO2 are provided only as supplemental information and are
                not considered as part of the final determination, which is based on
                energy efficiency as required under 42 U.S.C. 6833(b)(2)(A).
                 The model scenarios reported by the IWG demonstrate that the
                damage assessments and corresponding valuation (SC-CO2),
                adjusted for inflation, increase through time. As explained in the
                February 2021 TSD, ``[t]he SC-[CO2] estimates increase
                over time within the models--i.e., the societal harm from one metric
                ton emitted in 2030 is higher than the harm caused by one metric ton
                emitted in 2025--because future emissions produce larger incremental
                damages as physical and economic systems become more stressed in
                response to greater climatic change, and because GDP is growing over
                time and many damage categories are modeled as proportional to GDP.
                As noted above, DOE determined that the estimates from the February
                2021 TSD are based upon sound analysis and provide well founded
                estimates for DOE's analysis of the impacts of CO2
                related to the reductions of emissions
                [[Page 40534]]
                from updating the 90.1 Standard to the 2019 edition in its building
                codes impact analysis. Accordingly, DOE incorporated the IWG's
                consideration in its analysis. However, as discussed in previous
                comments, DOE's SC-CO2 analysis using these estimates was
                not considered in DOE's ultimate determination of whether the 2021
                IECC Standard will improve energy efficiency.
                 Comment: AHRI, p. 4. AHRI argued that it is arbitrary and
                capricious to use different timeframes and assumptions for costs and
                benefits and notes that DOE must clarify precisely why and how it
                believes it has statutory authority under 42 U.S.C. 6833(a) to
                consider SC-CO2 issues and cites why such action is
                legally arbitrary without sufficient documented reason for treating
                similar situations differently. AHRI notes that DOE, in clarifying
                why it believes it has such authority, can establish how it is
                acting consistently in terms of the analysis of benefits.
                 DOE Response: See previous response to AHRI comment on the issue
                of authority. On the issue of costs and benefits, DOE reemphasizes
                that its determination analysis is not assessing the costs and
                benefits associated with the updated 2021 IECC, that the
                determination is solely based on energy efficiency, and that the
                reported carbon emissions are reported only as supplemental
                information for the benefit of interested parties and in support of
                the directives of Executive Order 12866. To clarify the issue of
                timeframe, the emission estimates are based on one year (i.e., the
                annual energy consumption estimated via the energy efficiency
                analysis). However, the step of projecting the associated
                CO2 impacts captures the longer-term impact of those
                single-year emissions, as they persist in the atmosphere (and drive
                the damage impacts over the time they persist), which is then
                discounted to present value for the year when the emissions occur.
                DOE does not find an economic inconsistency in this approach to
                reporting emission benefits. Such a calculation is similar to life-
                cycle analysis, for instance, which is performed in a similar
                fashion, where a single year event occurs (e.g., a purchase of more
                efficient equipment), but the energy savings are calculated over the
                time they exist (e.g., the life of the equipment), and discounted
                back to the present value to reflect an overall life-cycle cost.
                DOE's reporting here of discounted damage impacts is consistent with
                that general approach.
                Signing Authority
                 This document of the Department of Energy was signed on July 19,
                2021, by Kelly Speakes-Backman, Principal Deputy Assistant Secretary
                and Acting Assistant Secretary for Energy Efficiency and Renewable
                Energy, pursuant to delegated authority from the Secretary of Energy.
                That document with the original signature and date is maintained by
                DOE. For administrative purposes only, and in compliance with
                requirements of the Office of the Federal Register, the undersigned DOE
                Federal Register Liaison Officer has been authorized to sign and submit
                the document in electronic format for publication, as an official
                document of the Department of Energy. This administrative process in no
                way alters the legal effect of this document upon publication in the
                Federal Register.
                 Signed in Washington, DC, on July 22, 2021.
                Treena V. Garrett,
                Federal Register Liaison Officer, U.S. Department of Energy.
                [FR Doc. 2021-15969 Filed 7-27-21; 8:45 am]
                BILLING CODE 6450-01-P
                

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