The U.S. Environmental Protection Agency (EPA) is proposing to nearly quadruple its calculation of the social cost of carbon, from US$51 to $190 per tonne.
The higher figure would replace the interim number that had previously been set by an interagency working group (IWG) set up to streamline the method of calculating the social cost metric across U.S. government departments and agencies, E&E News reports. The interim figure, announced February 26, 2021, followed a regulatory rollback the Trump administration that set the price as low as $1 per tonne.
The Biden administration initiative has been challenged in court by the Republican attorneys general in Louisiana and Missouri.
Setting the right number matters. E&E News explains that the social cost of carbon metric “puts a price tag on the damages created by each tonne of greenhouse gas emissions. Agencies can then use it as part of their analyses of the costs and benefits of more stringent climate regulation on sources ranging from power plants and automobiles to the oil and gas sector.”
It isn’t clear whether the EPA number reflects the working group’s thinking. “EPA’s draft technical report is among the many technical inputs available to the IWG as it continues its work,” EPA spokesperson Taylor Gillespie told E&E.
The EPA is seeking public comment on its new estimate, contained in a document that lays out economic rationales for pegging the social cost at $120, $190, or $340 per tonne. The agency is also looking at the social costs of methane and nitrous oxide.
Earthjustice senior attorney Hana Vizcarra said it makes sense for the EPA to float its own social cost of carbon calculation, adding that the role of the IWG is to help agencies share resources, streamline the rulemaking process, and avoid duplicating their efforts.
“I’m not sure what it means for where IWG is,” she said of the EPA draft. “But to see EPA put this out, at least you know that some portion of that working group has been seriously working on this issue.”
E&E News has details on the politics and legal battles around social cost of carbon calculations in the U.S.