The Biden administration is moving forward with federal regulations using a temporary figure to account for the costs of climate change, as a delay in finalizing a permanent estimate sparks frustration among industry and advocates.
The use of estimates to measure the overall costs imposed by carbon dioxide and other greenhouse gases was pioneered by the Obama administration and revived by President Joe Biden, who set a tentative $51 dollars per ton while the administration finalizes a new metric.
The carbon cost figure is being touted as a way to better account for the benefits of regulations that reduce emissions, including renewable fuels, methane and tailpipe regulations, as well as efficiency standards for appliances such as microwave ovens, clothes dryers and household ovens.
But without a permanent number, what was originally intended as a temporary fix is increasingly being used to guide an array of energy, air pollution and other regulations the administration pushes through the pipeline. Industry groups say the result is too much business uncertainty. Environmental groups say the temporary figure reduces climate costs and blocks more aggressive action.
The Biden administration planned to roll out a final metric in January 2022. And while an interagency task force has been working on the final estimates since the release of interim numbers in February 2021, the White House said this week it could not still not say when the carbon cost would be finalized.
“This administration remains committed to accounting for the costs of greenhouse gas emissions as accurately as possible, and we continue to evaluate how best to account for these costs in regulatory and fiscal contexts going forward,” a statement said. spokesperson for the White House Office of Management and Budget. said.
“A lot of uncertainties”
Industry groups say the White House panel tasked with coming up with the final estimates has become a “black hole” – a worrying lack of transparency as potentially costly regulations move forward.
“Especially in times of tight labor markets, high energy prices and a lot of uncertainty, it is useful when companies plan their activities in the future to know what regulations are coming and what will be. their compliance obligations,” Chad said. Whiteman, U.S. Chamber of Commerce vice president for environmental and regulatory affairs.
“There’s a lot of uncertainty here, not just about the final numbers, but how agencies can apply them in decision-making,” he said.
The metric estimates the societal costs for each tonne of global warming greenhouse gases emitted, avoiding impacts such as loss of agricultural productivity, property damage from severe storms and reduced water availability gentle.
The White House also used the estimate to tout the benefits of the new climate law (Public Law 117-169). The OMB used the metric to calculate that the act’s cumulative climate-related benefits would amount to $1.9 trillion through 2050.
Yet climate advocates argue that the $51 per ton placeholder low-balls climate costs and hamstrings agencies to pursue more ambitious regulations to tackle the climate crisis.
Work towards a final figure is taking place amid an intense legal backdrop, with courts weighing this year, but so far not stalling, industry-backed attempts to kill use of the provisional estimate .
On October 21, a federal judge in Missouri dismissed the latest major legal challenge against the use of the preliminary estimate, ruling that harm could not be established since there was no definitive figure. The United States Court of Appeals for the Fifth Circuit issued a similar challenge to the metric led by Louisiana Attorney General Jeff Landry earlier this year.
Cancel a GOP priority
The legal challenge to the metric, if successful, could open the door to challenging regulations that have used the estimates and possibly force the Biden administration to reconsider major pending climate actions.
These actions include the 2023 model year vehicle efficiency standards, where the interim carbon cost estimate was part of the rule’s broader cost-benefit analysis. Republican-led states have
The provisional figure was also used in the stricter vehicle fuel economy standards released in April. The Department of Transportation cited a range of benefits, ranging from about $73 billion to $112 billion by 2050. The Environmental Protection Agency’s renewable fuels mandate touted benefits between $3 billion and $51 billion using the metric in its July revision, and the Department of Energy revised. the consumer furnace standard totaled $16.2 billion in climate benefits using the provisional figure.
Leading Congressional Republicans have pressed the administration to disclose where it used the provisional number, including whether the EPA used the metric to review draft environmental impact statements prepared by sister agencies to ensure that energy and other projects requiring federal approval have fully considered environmental impacts.
Sen. Shelley Moore Capito (RW.Va.) and Rep. Cathy McMorris Rodgers (R-Wash.) — top Republicans on the Senate Environment and Public Works and House Energy and Commerce Committees, respectively – in a March letter asking EPA Administrator Michael Regan to fully disclose “all assessments, reviews, regulatory activities, briefing materials and litigation” where the provisional figure was used.
Both lawmakers could be poised to take up the hammers of their committees in the next Congress, though control of the House and Senate are still in the balance after Tuesday’s midterm elections.
Capito has repeatedly targeted measuring the cost of carbon, including in legislation (S. 4596) it introduced in July with Sen. James Lankford (R-Okla.) which has nearly a dozen co-sponsors. of the GOP. The bill is designed to prohibit the use of metrics in the rule-making process. Capito, in a November 4 statement, said it would use “every tool available” to reduce the social cost of the carbon effort.
“Repeatedly, I have directly asked the Biden administration for information on the development and use of its erroneous social cost of carbon, and these requests have been consistently ignored. This is unacceptable,” she said.
Moving Metrics
The impact of the measure on the final regulation can be difficult to decipher since it is only one of the many advantages linked to a regulation which can be weighed against the economic costs that a regulation would impose.
It’s “not at all clear that there’s a direct line between the social cost of carbon and the level at which a standard is ultimately set,” said Amy Sinden, a professor at Temple University’s Beasley School of Law. .
Any final carbon cost figure above the interim estimate is likely to further anger industry groups and spark resistance from Republican opponents.
But the delay also likely stems from the challenge of defining calculations that are a complex mix of scientific and economic modeling, which the White House knows must withstand scrutiny and likely legal challenge, said partner Hunter Johnston. at Steptoe & Johnson LLP.
“These things have to be done with care or they’re easily reversible,” Johnston said. “You have to go through a very disciplined process because you want it to be scientifically and economically justified.”
Those who support estimates of the social cost of carbon note that its dates of use date back to the Obama administration and that even the Trump administration has used the metric, although it has reduced the estimate to as low as $1. the ton. It is “clear” that the cost of carbon emissions is not zero, according to Dan Farber, a law professor at the University of California at Berkeley.
“If you leave it out of the cost-benefit analysis, you skew the analysis, just like you ignore any other cost or benefit of the action,” Farber said. “Several agencies have been toppled for ignoring the climate impacts of their work, and CSC is the easiest way to incorporate that.”
Too weak?
But others argue that Biden’s tentative number significantly inhibits agencies from setting regulations by underestimating the costs imposed on society by carbon emissions.
Resources for the Future concluded in September after a multi-year study that the cost of $51 per tonne should be more than three and a half times higher at $185 per tonne – drawing on recent scientific and economic literature showing that earlier estimates greatly underestimate the damage from each additional ton of carbon dioxide released into the atmosphere.
That agencies’ continued use of the $51 per tonne figure is driving up regulatory costs is in the eye of the beholder.
Some note that the bulk of the major ongoing climate rules have yet to be proposed, including plans to revise carbon limits for power plants in the wake of the West Virginia vs. EPA decision.
And the regulations that have advanced so far have been “relatively minor,” according to Brian Perst, director of RFF’s Social Cost of Carbon Initiative.
“Maybe they’re seen as big impacts on the relevant industries, and so they’re going to raise a ruckus about it,” said Prest, who noted that only the revised tailpipe emission standards would be considered significant regulation.
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