By Lorraine Woellert and Zack Colman
President Joe Biden on Friday restored an Obama-era calculation on the economic cost of greenhouse gases, a step that will make it easier for his agencies to approve aggressive actions to confront climate change.
But the administration stopped short, for now, of boosting the cost figure to higher levels that economists and climate scientists say are justified by new research.
The interim figure — $51 for every ton of carbon released into the atmosphere — is well above the $8 cost used under former President Donald Trump, who declined to factor the global impacts of climate pollution into his calculation. It’s on par with a price based on analyses undertaken between 2010 and 2016 under former President Barack Obama, whose administration was first to calculate the figure known as the social cost of carbon.
The price point is temporary. A new Interagency Working Group on the Social Cost of Greenhouse Gases is required to issue a final number by January.
Under the figures released Friday, the social cost of carbon will be $51 with the 3 percent discount rate applied. A discount rate of 5 percent would push the price per ton to $14.
“This is to be celebrated for getting the social cost of carbon out from being a political football, which is what Trump did, but it’s Step One. Step Two is restore a transparent process and to return the social cost of carbon to the frontier of climate science and economics,” said Michael Greenstone, a University of Chicago economist who played a primary role developing the Obama-era social cost of carbon. “I view this whole thing as a reset and now they will go out and engage.”