Fighting for the Full Valuation of Climate Damages
As the climate crisis intensifies, it is crucial that we effectively contextualize and consider how policies affect our climate. The social cost of carbon (SCC) and related metrics, like the social cost of methane, are the best available tools, estimating the monetized damage done by each ton of greenhouse gas released into the air. We have worked hard to ensure that governments, regulators, and courts account for the SCC in policy and decisionmaking.
A string of recent policy outcomes has created positive momentum on the valuation of climate damages within policymaking efforts. A federal court in California vacated the Bureau of Land Management’s repeal of an Obama-era rule controlling methane emissions, ruling in part that it was arbitrary for the agency to have reduced the estimate of the social cost of methane from $1300 per ton down to just $176 per ton by ignoring climate effects occurring outside U.S. borders. We have argued in public comments, academic articles, and reports that “domestic-only” estimates fail to consider significant costs—and we helped inform the Northern District of California’s decision by filing an amicus brief in the case. Days later, the Government Accountability Office released a report criticizing Trump administration agencies for manipulating economic models to drastically underestimate the SCC. Richard Revesz spoke with S&P Global and Bloomberg Law about the report, which, as he explains, will weaken the administration’s efforts to uphold its environmental deregulation in court.
State regulators are also paying greater attention to the cost of climate damages. The most current example is New Mexico, which, since 1973, has been home to the coal-fired San Juan Generating Station. With this power plant slated to retire in 2022, the state’s Public Regulatory Commission has adopted a plan to replace the plant’s power output with a portfolio of 100% renewable energy. We have helped guide New Mexico’s energy policy, providing testimony in 2019 that SCC metrics would allow the Commission to better contextualize the impacts of retiring the San Juan Generating Station. The Commission conducted thorough climate analysis, weighing the SCC to better evaluate costs and benefits of the new portfolio.
These recent policy outcomes represent remarkable progress that stems from over a decade of work. Since Policy Integrity began in 2008, we have dedicated thousands of hours to legal briefs, publications, and public comments aiming to improve SCC metrics and bolster their role in government. We advocated before the Obama administration, played a key role in federal court cases, and actively track state-level progress on the issue. Climate change threatens to incur massive costs on public health and economic stability around the world. Ensuring the effective valuation of climate damages will continue to be one of Policy Integrity’s core missions.