President Biden’s climate-change team is temporarily returning to numbers used by the Obama administration to assign monetary value to greenhouse gas emissions.
The group indicated in its Friday release that the final values could be higher.
The interim estimate puts the average cost of carbon of $51 per ton as they assess the costs and benefits of mandates to curb emissions. The temporary figure calculates the social cost of carbon, adjusted for inflation, and is used by federal agencies. The report could help the Biden administration justify stricter emissions controls.
Federal agencies will also adopt interim values for the social cost of methane and nitrous oxide, two other greenhouse gases, also aligned with the Obama administration’s metric.
A final number from Biden is expected to be set in a year.
The Trump administration had cut its estimate for the social cost of carbon to between $1 and $7 per ton to help its case for rolling back or weakening climate-change mandates. Some Republicans cheered easier business regulations on climate change during the previous administration, arguing in part that continued use of fossil fuels, including relatively cheap natural gas
hold down U.S. energy costs. Traditional energy sources emit greenhouse gases and are considered a main pollutant.
American Petroleum Institute Vice President of Corporate Policy Stephen Comstock said in a statement that adding his industry to the working group is important. He emphasized a fall in U.S. emissions already, from 2014 to 2019. API supports the direct regulation of methane for new and existing fossil-fuel sources.
Returning to the Obama administration’s values in the interim “will enable federal agencies to immediately and more appropriately account for climate impacts in their decision-making,” said Heather Boushey, a member of Biden’s Council of Economic Advisers, in a blog post.
She said the interagency working group will “continue the process of bringing the best, most up-to-date science and economics to the estimation of the social costs of greenhouse gases.”
At least one former economist focusing on climate change during the Obama administration, Michael Greenstone, thought Biden should settle on interim values twice as high, at around $100 per ton.
Differing opinions on setting the cost typically are tied to guessing how far in the future the greatest impact will be felt.
In a technical support document, the Biden working group said the latest scientific and economic understanding of discount rates applied to carbon suggests lower figures should be used for analysis of benefits and costs that span multiple generations. But the group also concedes there’s greater risk in underestimating societal damages from emissions.
“This [Biden] action replaces an egregious act of climate denial by the former administration,” said Starla Yeh, director of the policy analysis group in the Climate & Clean Energy program at the Natural Resources Defense Council.
“This interim estimate is an appropriate first step in providing improved tools to account for the massive economic damage wrought by climate change — including from droughts, wildfires, rising ocean levels and the ever-growing extreme weather events that destroy lives and property,” Yeh said.