Public comments to OMB on the social cost of carbon (SCC)
Today NRDC, Environmental Defense Fund, New York University’s Policy Integrity, and the Union of Concerned Scientists submitted joint comments (click here and here) commending the government for counting climate change benefits in proposed carbon pollution standards. These benefits are measured by the “social cost of carbon” (SCC).
The SCC estimates damages from more extreme weather and other climate impacts, and is the number used to estimate the economic value of protective climate measures the Environmental Protection Agency is currently required under law to implement.
A recent scientific update to the SCC launched a full on assault against it by the fossil fuel lobby and politicians backed by it, because its value increased enough to potentially make a difference (more below). Couching their attack in terms of process issues and imprecision in the estimate, industry interests whose bottom line may affected by carbon standards demanded the government be prohibited from using the SCC to count any benefits from slowing down climate change.
The attack on cost benefit analysis is the latest gambit by climate deniers to prevent progress on climate change. After Congress failed to pass comprehensive climate legislation, the denier crowd proposed numerous bills to stop EPA from regulating carbon pollution. After failing at that, too, they’ve now turned to undermining the agency’s rulemaking process by preventing it from counting benefits from reducing carbon pollution.
This assault on cost benefit analysis goes against Presidential executive orders dating back as far as the Reagan Administration, directing agencies to do their best to quantify as many costs and benefits of protective standards to inform rational and cost-effective regulation. Why would a seemingly routine best-practice exercise for cost-benefit analysis create such backlash?
As I’ve covered in previous blogs, the answer is simple: for the first time ever, forthcoming rules will limit carbon pollution coming from the largest source of these emissions: existing power plants. These plants account for fully 40% of CO2 pollution, representing a very large source of profits for the fossil fuel industry.
And herein lies the rub: it turns out that the updated SCC tips the scale against fossil fuels in favor of cleaner energy, even as it excludes many of the worst impacts of climate change (as documented in our comments and in a forthcoming report from the Cost of Carbon Pollution project). Once you add climate change costs (as partially measured in the SCC) to the cost of electricity generation, cleaner energy is cheaper to society than dirty. If the new rules sufficiently consider climate costs, the logical regulatory outcome of counting the SCC means further growth in the clean energy economy and reduced profits for the fossil fuel industry.
For all the fanfare about the Administration supposedly trying to manipulate the SCC, the truth is that opponents of carbon standards care more about their profits than our children and grandchildren’s futures. Send a note to OMB in support of counting carbon pollution damages in policy analysis.