By Jean Chemnick

When EPA released its Affordable Clean Energy rule last month, it appeared to leave Alaska, Hawaii and U.S. territories out of its cost-benefit analysis.

The regulatory impact analysis for the power plant carbon rule — posted on EPA’s website on June 19, a few hours after the rule itself — included language strongly hinting that displaced Alaskan villages and flooded Hawaiian coastal infrastructure had never been part of the Trump administration’s controversial accounting for the cost of climate change to the American economy.

That appears to have been a mistake.

A spokesperson for EPA called it a “typo” in an email last Tuesday and two days later reported that the “typo” had been corrected.

But how, exactly, the Trump administration arrived at its carbon cost estimates remains unclear.

The end result is that the Trump administration’s estimates are as low as $1 per ton in the ACE rule and elsewhere.

“They looked for two dials that would reduce the social cost of carbon as much as possible, they found them, and they turned them,” said Michael Greenstone, a chief economist at the Council of Economic Advisers under Obama.

The lower the estimate for the cost of carbon, the costlier cutting carbon looks. Because it used the U.S.-only figures, the ACE rule’s cost-benefit analysis showed the rule’s relatively modest costs exceeded its benefits by nearly $1 billion over 15 years.

“The dream of all policy wonks is to have evidence-based policymaking where the evidence leads to the policy,” said Greenstone, who is now an economics professor at the University of Chicago. “This looks and smells an awful lot like evidence-based policymaking where you decide what the policy is going to be and then go back and make the evidence up.”

Continue reading at E&E News…

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