By Mark Drajem
Buried in a little-noticed rule on microwave ovens is a change in the U.S. government’s accounting for carbon emissions that could have wide-ranging implications for everything from power plants to the Keystone XL pipeline.
The increase of the so-called social cost of carbon, to $38 a metric ton in 2015 from $23.80, adjusts the calculation the government uses to weigh costs and benefits of proposed regulations. The figure is meant to approximate losses from global warming such as flood damage and diminished crops.
With the change, government actions that lead to cuts in emissions — anything from new mileage standards to clean-energy loans — will appear more valuable in its cost-benefit analyses. On the flip side, environmentalists urge that it be used to judge projects that could lead to more carbon pollution, such as TransCanada Corp. (TRP)’s Keystone pipeline or coal-mining by companies such as Peabody Energy Corp. (BTU) on public lands, which would be viewed as more costly…
…For example, the administration’s vehicle fuel-efficiency standards would cost industry $350 billion over the next 40 years, while benefits in energy security, less congestion and lower pollution totaled $278 billion, according to a regulatory analysis using the prior carbon cost estimates cited in a paper by administration economists. It’s only by including the $177 billion in benefits from less carbon dioxide that the rules provide a net benefit to the country, according to the paper by Michael Greenstone, now an economics professor at the Massachusetts Institute of Technology…
Continue Reading at Bloomberg…