By Catherine Clifford
Putting an accurate figure on the cost of greenhouse gasses can have massive consequences on the future of climate change.
In order to do this, the new White House administration announced late February it will use the Obama-era estimates for the “social cost of greenhouse gasses” after adjusting them for inflation. The social cost of greenhouse gasses was first used by the Bush administration and later standardized by President Barack Obama’s White House.
The Trump administration discontinued the group responsible for updating the metric and used “revised estimates” which, according to the Biden administration, did not “rely on the best available science.”
Michael Greenstone, former chief economist of the Council of Economic Advisers, has in recent years called the social cost of greenhouse gasses — which is typically referred to as the the social cost of carbon — “the most important figure you’ve never heard of.”
However, the SCC’s reinstatement is already facing some pushback. Twelve states filed a lawsuit against the Biden administration on Monday, claiming its calculus of the metric would harm their local economies.
Below is a breakdown what the social cost of greenhouse gasses is, and why it is seen as critical by some and devastating by others.
The social cost of greenhouse gases changes with who is in the White House
The president can also have a major influence over the social cost of greenhouse gasses.
“The Trump administration disbanded the [Interagency Working Group] in 2017 and instead relied on its own ‘interim cost’ to inform important regulatory decisions that was seven times lower than the IWG’s estimate – between $1 to $7 per ton,” Brooks says. “These dangerously low estimates, which flew in the face of established economic principles, were used to justify the Trump administration’s rollbacks of climate and health protections like the federal Clean Car Standards.”
The Biden administration used the estimates established by the IWG before it was disbanded, Boushey writes. This is considered an “interim step” for governmental agencies to use “while we continue the process of bringing the best, most up-to-date science and economics to the estimation of the social costs of greenhouse gases,” she says. A more comprehensive analysis will be a released in January 2022.
“This was a strong first step,” Tamma Carleton, an assistant economics professor at UC Santa Barbara’s Bren School of Environmental Science and Management, said of the reinstatement of the social cost of greenhouse gasses. Carleton co-authored a paper with Greenstone published in January that outlined the steps toward updating the social cost of greenhouse gasses.
“Increasing the social cost of carbon from its unjustifiably low levels under the Trump administration will lead to policy choices that lower emissions, ultimately lowering the harm that Americans face from a warming and more variable climate,” Carleton says.