The EPA administrator devalues our future, Congressman Bishop devalues our history, and industrialists devalue Rick Perry.
Pruitt’s Price Tags
U.S. Environmental Protection Agency chief Scott Pruitt formally proposed to kill the Clean Power Plan this week. We could spend a lot of time talking about Pruitt’s irresponsibility and his annoying, diversionary rhetoric about the “war on coal.” But the courts’ decision on whether to let Pruitt do this dirty deed will turn largely on the nerdy financial calculations found at the end of his leaked proposal.
Those calculations, which attempt to show that the costs of the Clean Power Plan outweigh the benefits, do not stand up to scrutiny, and I think you’ll agree once you understand how little weight future generations and non-Americans hold in Pruitt’s equations. Please stay with me as I try to explain these mathematical sleights-of-hand as painlessly as possible.
Discount Rate
This is based on the question, How much is a future benefit worth today? The most obvious example of a discount rate can be seen in a loan. When you give someone money today, and in exchange they agree to give you more money tomorrow, you’re applying a discount rate. This calculation seems straightforward, but it becomes more fraught when one generation is valuing benefits for another, and that’s the challenge with the Clean Power Plan. Many of the health and climate-related benefits will accrue to our children and their children. How much are we willing to pay today for that?
Pruitt isn’t willing to pay much at all. He gave an extremely high discount rate of 7 percent to the future benefits of the Clean Power Plan. Since many of those benefits won’t materialize for decades, an inflated discount rate makes them worth virtually nothing today. For the sake of comparison, the George W. Bush administration—not known as great stewards of the environment—recommended a maximum discount rate of 3 percent when considering intergenerational benefits.
Put simply, Pruitt doesn’t value our grandchildren’s health and safety. You don’t need a background in finance to recognize the moral bankruptcy of his viewpoint.
Social Cost of Carbon
You’ve probably heard this phrase before. It’s an attempt to place a monetary value on the harms that carbon emissions inflict on society in the form of sickness, extreme weather, and so on.
The Obama administration conducted lengthy, transparent calculations for this estimate and settled on $40 per ton of carbon dioxide or the equivalent in methane and other greenhouse gas. (I would link to a page showing those calculations, but Pruitt’s EPA has taken it down.) Approximately $30 of that cost is borne by other countries, because the first and most painful effects of climate change are being felt in places like sub-Saharan Africa and South Asia, which are already hot and vulnerable to extreme weather. The Trump administration doesn’t think we should count those harms, or at least we should assign a negligibly small value to the suffering we impose on those beyond our borders.
Inflicting avoidable harm on already impoverished countries is wrong in itself. And ignoring those consequences crosses the line of common decency. Add in the fact that the EPA’s four-year plan contains no mention of climate change, and the negligence is complete. This isn’t putting America first—it’s pretending the rest of the world doesn’t even exist.
Making the Antiquities Act History
The House Natural Resources Committee held a hearing Wednesday to review a bill to amend the Antiquities Act. By “amend,” I mean destroy.
The Antiquities Act, signed into law by President Theodore Roosevelt in 1906, allows the president to permanently protect “historic landmarks, historic and prehistoric structures, and other objects of historic or scientific interest.” The act has set aside the Little Bighorn Battlefield in Montana, New York City’s Governors Island, Devils Tower in Wyoming, Fort McHenry in Baltimore (the birthplace of our national anthem), and many other awe-inspiring historic and environmental treasures.
Utah Representative Rob Bishop, however, doesn’t like how the Antiquities Act prevents the oil and gas industries from exploiting such sites. So he introduced a bill that would limit the act’s powers to the protection of historic artifacts and exclude areas of natural significance. If passed, the bill would, for example, prevent future designations of places like California’s Muir Woods, one of the most breathtaking collections of redwood trees in the world. Bishop’s objections fly in the face of what Teddy Roosevelt championed and signed. (One of the great ironies of western politics today is the way people like U.S. Department of the Interior Secretary Ryan Zinke publicly idolize Roosevelt while chipping away at everything he stood for.)
Bishop’s bill would also limit the size of national monuments, which he claims has grown out of control, citing the average size of monument designations as 740,000 acres. What the congressman fails to mention is that the sprawling Papahanaumokuakea Marine National Monument off Hawaii—created by President George W. Bush and expanded to 373 million acres last year by President Obama—completely skews the average. Bishop’s size limitation of 640 acres would make marine monuments all but impossible and would have prevented the designation of such sites as Mojave Trails and San Gabriel Mountains in California and Colorado National Monument, which was designated in 1911.
The bill would also allow presidents to shrink monuments designated by their predecessors. This provision is a tacit admission, by the way, that no legal mechanism currently exists to do so. Bishop might want to notify Trump of that fact as the president mulls an illegal attempt to whittle down several national monuments.
Does Anyone Like This Idea?
We reported last week on U.S. Department of Energy Secretary Rick Perry’s attempt to save dirty, outdated coal plants from retirement by effectively subsidizing their operation through price-fixing. The idea was so spectacularly unpopular that it forged an unlikely alliance between oil, gas, wind, and solar producers. One Washington Post headline even read: “Rick Perry Manages to Unite Oil, Gas, Wind and Solar—Against Him.”
This week, the Industrial Energy Consumers of America joined the chorus of voices against Perry. The group, which represents operators of the nation’s biggest factories and industrial plants, called the proposal “anti-competitive” and pointed out that Perry was trying to solve a problem that doesn’t exist. Our energy grid is already resilient, and the occasional failures have absolutely nothing to do with a shortage of coal to burn—the central premise of Perry’s plan.
Perry tweeted in his own defense that his proposal was “transparent,” which is true. It’s transparently stupid. And just about everyone agrees.
Stay up-to-date on Trump’s environmental antics by visiting NRDC’s Trump Watch.
