In the News

In a critical federal court hearing this month, challengers of the Clean Power Plan, the Obama administration’s signature climate change policy, will characterize the Plan as an “enormous and transformative expansion” of the Environmental Protection Agency’s (EPA) regulatory power.

A recent federal court ruling may have opened a new chapter in U.S. climate and energy policy. Now that the Seventh Circuit has formally endorsed the use of the social cost of carbon, it could become one of the primary tools used to shape policies on environmental regulation, energy efficiency, natural resource leasing, and environmental impact quantification.

“In Hughes, Maryland was focused on the money that would be needed to prop up companies, to help them survive in the face of changing markets,” said Denise Grab, senior attorney at the Institute for Policy Integrity at New York University’s School of Law. “New York’s final CES decision does what it can to stay away from that approach; instead, it focuses on properly valuing the low-carbon attributes of nuclear plants separate from the wholesale markets.”

New York State’s new Clean Energy Standard (CES) has drawn plenty of attention for trying to prop up otherwise-faltering nuclear plants. But what it’s actually doing is far more significant. The CES, recently approved by the New York Public Service Commission, aims to help meet the state’s goals of using renewable energy sources for half its electricity by 2030 and reducing greenhouse gas emissions by 80 percent by 2050. To help get there, the CES lays out one of the country’s first clean energy plans that relies on sound economic valuation of generators’ clean energy attributes. This isn’t a nuclear plant bailout; it’s an embrace of economic principles.

Jayni Foley Hein, the policy director at the Institute for Policy Integrity at NYU School of Law, told me that not all companies oppose SCC, and that some, like Microsoft, actually have an internal social cost of carbon.

Jayni Hein, policy director at the Institute for Policy Integrity at New York University School of Law, praised the OSMRE’s move. “This guidance could help protect taxpayers, as well as land and water resources,” Hein said in a statement.

The Institute for Policy Integrity said the ruling is significant for including climate change in cost-benefit analyses. “This ruling provides significant support for the social cost of carbon as a regulatory policy tool,” Denise Grab, a senior attorney with the institute, said in a statement.

“The document is meant to harmonize practices across federal agencies,” Jayni Hein, policy director for the Institute for Policy Integrity, told Scientific American. “The guidelines are not legally binding, but they will be persuasive to agencies, most importantly.”

“The guidelines are not legally binding, but they will be persuasive to agencies, most importantly,” according to Jayni Hein, policy director for the Institute for Policy Integrity.

During a hearing before the Senate Environment and Public Works Committee in June, UARG attorney Allison Wood sparred with Richard Revesz, director of the New York University School of Law’s Institute for Policy Integrity, over whether UARG v. EPA was a boon for the power industry. Wood noted that she was speaking in her own capacity, but said she represents several utility clients in the litigation involving the Clean Power Plan, including some that launched a successful bid for a stay of the rule from the Supreme Court.

Revesz defended the EPA’s record before the Supreme Court, characterizing the UARG v. EPA ruling as a win for both sides. But Sen. Dan Sullivan, R-Alaska, said the EPA “lost that big time.”