December 20, 2017

Watchdog Agency to Study Trump Changes to Key Measure of Carbon Pollution Cost

Washington, DC – Acting upon the request of Senator Sheldon Whitehouse (D-RI) and six other Senators, the Government Accountability Office (GAO) has indicated it will examine the government’s method for calculating the social cost of carbon—the measure of long-term damage done by carbon pollution.  The watchdog agency will begin the study in coming months, GAO indicated to Whitehouse today.

On December 5, Senators Michael Bennet (D-CO), Jeff Merkley (D-OR), Ben Cardin (D-MD), Elizabeth Warren (D-MA), Kamala Harris (D-CA), and Dianne Feinstein (D-CA) joined Whitehouse in requesting the GAO study after the Trump administration dramatically reduced estimates of the costs of climate change in recent assessments of federal actions.  Using a lower estimate for the social cost of carbon could allow the administration to undermine a range of environmental regulations by exaggerating the compliance costs compared to the societal benefits of reduced carbon emissions.

Earlier this year, President Donald Trump issued an executive order disbanding an important interagency working group charged with formulating the social cost of carbon and withdrew the guidance it had issued.  The Trump administration also directed agencies to use an outdated Office of Management and Budget (OMB) policy to monetize the value of greenhouse gas emissions in federal regulation.  As expected, the result has been a severe downtick in the value of the social cost of carbon.  The Environmental Protection Agency’s assessment of its proposed rule to repeal the Clean Power Plan, for example, dropped the social cost of carbon from $45 per ton to as low as $1 per ton for 2020.

The Senators asked the GAO to look at states’ and other countries’ social costs of carbon; the Trump administration’s justification for dramatically changing the way it discounts the costs or benefits of regulation change affecting carbon pollution; and the rationales that have been used to support various discount rates in assessing the social cost of carbon.

The GAO’s report will build on a 2014 report on the social cost of carbon.  That report examined how an interagency working group convened by the OMB and the Council of Economic Advisers developed social cost of carbon estimates in 2010 and 2013. 

In addition to use by agencies in assessing regulations, a range of authorities has adopted the social cost of carbon, including courts, corporations, utilities, and international governing bodies.

The Senators’ letter to the GAO requesting the study is available here.


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