The White House has ordered federal agencies to stop considering the economic damage caused by climate change when the regulations are written unless the law “exactly requires.”
The directive effectively put a powerful tool on hold that has been used by the federal government for two decades to weigh the costs and benefits of a specific policy or regulation.
The Biden administration uses the tool to strengthen restrictions on greenhouse gas emissions from cars, power plants, factories and refineries.
The indicator, known as the “social cost of carbon,” reflects the estimated damage from global warming, including wildfires, floods and droughts. It constitutes economic costs from a ton of carbon dioxide pollution, the main greenhouse gas that is heating the planet.
When considering regulations or policies that limit carbon pollution, policy makers weigh the cost of meeting the industry to deal with the economic impact of this pollution on society.
During the Obama administration, White House economists set the social cost of carbon at $42 per ton. The first Trump administration has lowered it to less than $5 per ton. The cost of inflation was adjusted under the Biden Administration and jumped to $190 per ton.
But, “it’s no longer the federal policy to maintain the unity of the monetization impact of greenhouse gas emissions,” Jeffrey B. Clark, an acting administrator for the White House Office of Information and Regulatory Affairs, wrote in a May 5 memo.
Mr. Clark doubts in the memorandum that pollution of things like transportation and industry is heating the planet.
He believes there is too much “uncertainty” in calculating the number, including “any assumed change has actually occurred due to artificial greenhouse gas emissions.”
Scientists and environmental groups say the Trump administration is denying reality.
“It's clear that climate change is causing damage to people in the United States and around the world, and as warming warms, these harms are getting worse,” said Robert E. Kopp, a climate scientist at Rutgers University. “By effectively saying that the social cost of carbon should be considered zero, the policy is arbitrarily and capable of overlooking the science and economics of climate change.”
Michael Greenstone, an economist at the University of Chicago, first proposed the idea of the social cost of carbon as a reason for climate policy, and he said the new guidance means “feeling, not facts” will guide federal policy.
“This decision is like Alice Wonderland's clumsy dumbass, who said 'words can mean I choose what they mean.' “So, yes, it's possible to create policies that assume climate change will not have an impact, but that's not the case. ”
The U.S. Petroleum Institute, which represents the oil and gas industry lobbying, calls for “limiting the social cost of carbon to the construction phase of certain oil and gas projects. The Republican Attorney General struggles with the social cost of carbon and describes it as an attack on the industry.
That's because when metrics are used, the economic benefits of reducing emissions from cars or power plants, such as increasing. The higher the estimate of welfare, the greater the reason the government has forcing the industry to reduce pollution.
“This number means the government has a weapon that can be used to prove anything it wants to do,” then Louisiana deputy attorney general Elizabeth Murrill said in 2023.
Climate law expert Richard L. Revesz, who served as regulatory director in the Biden administration, said the new policy would make it easier for the Trump administration to retreat from climate regulations.
It is unclear whether environmental groups will sue the government without considering the social costs of carbon. But analysts say approvals for projects such as pipelines or power plants are likely to face legal challenges, citing the government's failure to take into account climate change.
