In the News

Private equity firms are spending billions of dollars buying coal-fired plants on the cheap - and getting paid even when they are not providing power. So-called capacity payments are given out in most U.S. power markets, and regulators tend to favor coal-fired generators that store heaps of coal on site when other power sources might be disrupted. "The capacity power market is a certain source of revenue for coal plants that might otherwise be uneconomical," said Sylvia Bialek, an economist at New York University's Institute for Policy Integrity.

The White House on Friday announced a major change in how the federal government will calculate and weigh the cost of climate change in its permitting, investment and regulatory decisions with a move to restore the “social cost of greenhouse gases,” which had been slashed under the Trump administration. Richard Revesz, a professor at New York University School of Law, said restoring the previous calculation should provide a blueprint to calculate a new one that incorporates the latest "developments in science and economics."

Environmental experts hope Biden’s interim social cost of carbon is just an initial step toward a more aggressive policy next year. “The administration is taking a careful and legally sound approach in providing that a rigorous scientific process determine further updates,” said Richard Revesz. “A great deal of research suggests that these interim values are a lower bound for the damages of greenhouse gas emissions.”

Scientists have long used the social cost of carbon in their research, and several states have continued to use the Obama-era estimate in their policymaking. Richard Revesz said whatever comes out of the working group going forward will be reviewed by leading economists and other experts. "It sets forth a blueprint for the computation of final values, incorporating recent developments in science and economics and the input of the National Academies of Science, Engineering, and Medicine," he said.

Many experts expect the subsequent updates could lead to estimates of climate damages well higher than $100 per ton. “A great deal of research suggests that these interim values are a lower bound for the damages of greenhouse gas emissions. The administration is taking a careful and legally sound approach in providing that a rigorous scientific process determine further updates,” argues Richard Revesz.

With the new Administration in Washington, many think tanks and advocacy groups are making their voices heard on crafting mandatory climate disclosure regulations. A new report from the Institute for Policy Integrity at NYU and the Environmental Defense Fund advocates adoption by the SEC of a climate disclosure mandate.

Days before a Biden administration working group releases an “interim” value for the social cost of carbon used to estimate the benefits of greenhouse gas reduction measures, Richard Revesz, director of the Institute for Policy Integrity at New York University, is urging a broad reform of the SCC and the associated “discount rate” of future impacts in order to bolster the value of new EPA GHG rules.

Some environmental groups are vowing to seek rigorous National Environmental Policy Act and other environmental reviews of planned transmission lines, even when they are built to facilitate low- or zero-carbon power, a strategy that may frustrate the Biden administration’s effort to accelerate reviews for such projects. “Unlike the Trump administration, which sought to prioritize environmentally undesirable projects and run roughshod on NEPA requirements in the process, the Biden administration is seeking to prioritize environmentally desirable projects but respect NEPA safeguards,” argues Ricky Revesz, director of the Institute for Policy Integrity at New York University.

Jointly penned by the nonprofit Environmental Defense Fund and New York University School of Law's Institute for Policy Integrity, a new report said the current quality of firms' climate risk disclosures is not at the same level as that for other forms of risks that publicly traded companies routinely disclose. It calls on the U.S. government to improve and mandate its current disclosure regime because it will "help not only investors deciding how to allocate capital across corporations but also the corporations themselves."

Biden on Tuesday added several policy officials and legal experts to his White House Council on Environmental Quality. Jayni Hein, recently an adjunct professor at the NYU School of Law, will become senior director for NEPA and counsel.