Trump to Blindfold U.S. to Huge Cost of Carbon Pollution

President Trump is expected to order the Environmental Protection Agency (EPA) and other agencies to start dismantling limits on carbon pollution from power plants and other sources, as he already ordered EPA to do for vehicles. It is likely that his executive order will include another huge gift to the fossil fuel industry and other big polluters—instructions to his agencies to blindfold themselves to the enormous costs that carbon pollution imposes on American society.  

This willful ignorance of the harm from carbon pollution and climate change will likely be masked in wonky language directing agencies to stop using an economic estimate of the benefits of curbing climate-changing air pollution—called the “social cost of carbon”—in cost-benefit analysis of rules and regulations to reduce that pollution.

Why take the trouble to attack an arcane economic analysis technique known mostly to Beltway policy wonks and economists? Because the “social cost of carbon” reveals something polluters and their allies don’t want us to know: Carbon pollution imposes real costs on Americans’ health and their economy. Reducing carbon pollution produces huge health and economic benefits for the American public—benefits that far exceed the cost of transitioning to clean energy.

Conservatives have demanded since at least the Reagan administration that EPA and other agencies calculate the costs and benefits of proposed rules. They expected this kind of analysis to reveal that federal environmental safeguards impose a huge burden on the American economy while producing few benefits. In their mind, more cost-benefit analysis would limit the development of new rules.

But it turns out that cost-benefit analyses consistently show that air pollution causes death, illness, and economic damage that far exceeds the costs of cleaning it up.

This is especially true for cost-benefit analyses of climate protection regulations. Scientific and economic analyses consistently show that the benefits of curbing carbon dioxide, methane, and other heat-trapping pollutants greatly exceed the costs of control.

So now the polluter lobby is less excited about cost-benefit analyses than it used to be.

In response, the big polluters and their political allies—formerly the biggest fans of cost-benefit analysis—are attacking the method for calculating the benefits of curbing climate pollution—the social cost of carbon.

And now the Trump administration is poised to rig the system for them, so that the real costs of climate change, and the benefits of action, are ignored.

The social cost of carbon, now estimated at $41 per ton of carbon dioxide emissions reduced, was developed by economic experts from 12 different federal agencies. They used up-to-date science and economic methods to estimate the dollar value of benefits we get from curbing carbon pollution. That benefit value is then used in economic analysis of rules like the Clean Power Plan. When the harms of climate change are taken into account, the benefits of climate safeguards like these far outweigh the costs.

Federal appeals courts have held that agencies need to estimate the benefits of curbing climate pollution and that the current social cost of carbon methodology is a reasonable way to do so.

But now President Trump has ordered agencies to rig their cost-benefit analyses to produce zero or much lower benefit estimates for climate pollution reductions.

We can get a preview of the ways the Trump administration will rig the system from a recent Congressional hearing. Members of Congress and witnesses aligned with the big polluters followed three general strategies:

  • Deny the science.  Members of Congress and the administration are getting bolder about sharing their extreme and unscientific views about climate change. A prime example is EPA Administrator Scott Pruitt’s  recent claim on CNBC that carbon pollution isn’t the primary contributor to global warming. This statement is totally out of step with the science of climate change. But if you deny the science, then you can make the benefits of controlling carbon pollution magically disappear.
  • Fiddle with the economics. Critics seek to shrink the benefits estimate by fiddling with the economic nuts and bolts, in ways that defy common sense and run counter to our values. One of their favorite punching bags is the “discount rate,” which reflects how much we value the harms we impose on our children and their children as a result of the pollution we emit now. The higher the discount rate in a cost-benefit analysis, the less we value their health and well-being. Conservatives should favor keeping the world in good shape for those who come after us. It’s not conservative to enjoy everything now and leave a ruined climate for our descendants. Yet groups like the Heritage Foundation argue for a much higher discount rate than currently used—which would lower the benefit of curbing carbon pollution and make business as usual seem like a much better deal. But it won’t look that way to our children.
  • Pretend a global pollutant only affects us. Each country’s carbon pollution spreads evenly throughout atmosphere, harming everyone world-wide. We should account for the harm our pollution does to others, just as we want Europe, China, Japan, or India to account for the harm their pollution does to Americans. Yet critics want to blind our government to the harm our pollution does to people in other countries, and count only what happens to Americans. But imagine if each country did that. We’d all do too little and suffer too much. By accounting for all the harms from our carbon pollution, we lead other nations to do the same. Already other countries are also counting the global benefits of reducing their carbon pollution; Canada, Mexico, Britain, Norway, France and Germany all use estimates similar to ours. And the carbon pollution reductions being made by other countries under the Paris Accord will lead to trillions in benefits in the United States.

This is a preview of how the Trump administration will attack the “social cost of carbon.” But denying the science, fiddling with the economics, or pretending we’re the only country on the globe won’t make climate change go away. They won’t protect us now or in the future from climate-related harms like degraded air quality, property-damaging extreme weather, floods and drought that wreak havoc on our crops, or sea level rise that threatens our coasts. We owe it both to ourselves and future generations to fully account for the cost of climate change and to take action to curb the dangerous pollution that’s causing it.

About the Authors

Ben Longstreth

Senior Attorney, Climate & Clean Air program

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