Republicans Fault Use of $36-a-Ton Carbon Cost Figure

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By Dean Scott

July 22 — Republicans on the House Natural Resources Committee blasted the Obama administration July 22 for continuing to rely on an estimate of the costs imposed by carbon pollution on human health and other societal costs to justify power plant carbon pollution limits and other climate rules.

Rep. Cynthia Lummis (R-Wyo.) said that while she acknowledges the Earth is warming, she believes the social cost of carbon estimates inflate the benefits of regulations, which in turn only encourages more burdensome regulations by federal agencies.

“The social cost of carbon risks American jobs and our nation's prosperity, all in the name of questionable statistical models,” Lummis said.

The White House earlier this month revised the carbon social cost figure—which it first began using in 2009 to reflect the long-term damage done by a ton of carbon pollution—to $36 a ton.

Patrick Michaels, director of the Cato Institute's Center for the Study of Science, told the panel that the cost figure, which is set by an interagency working group, is unsupported by scientific literature and “fraught” with uncertainty, and thus “completely unsuitable and inappropriate” for use in weighing the benefits against the costs of federal rulemakings.

There is ample scientific evidence that the costs of carbon pollution to society could be closer to zero, Michaels said, which he said would “obviate” the need to regulate greenhouse gas emissions.

The White House announced July 2 that it had pegged the social cost of carbon to $36 per ton, down slightly from its previous estimate of $37 per ton. According to administration figures, the carbon cost estimate has been used in a total of 34 proposed federal rulemakings since the Obama administration issued its first estimate in 2009, including Environmental Protection Agency power plant carbon pollution limits.

There was no representative from the White House Office of Management and Budget or other Obama administration officials at the hearing to defend their approach to the carbon cost. Republicans said they had asked for a representative but were rebuffed. The OMB did not respond to news queries on why administration officials did not testify.

Members Clash Over Obama Efforts 

Rep. Rob Bishop (R-Utah), who chairs the Natural Resources Committee, said the Obama administration has given itself and future administrations “a mammoth blank check to stop any project based on a radical fantasy.”

“This unprecedented authority, disguised as an innocuous guideline for regulatory analysis, is a dangerous ideological weapon for the administration. The numbers can be so easily manipulated that it simply allows any administration to pick winners and losers,” he said.

Senate Republicans also ratcheted up their criticisms this week, with a July 21 letter seeking all documents related to the Environmental Protection Agency's participation in developing the social cost of carbon figure. 

Committee Democrats said the July 22 hearing was a thinly veiled attempt to attack the administration's regulatory efforts to address climate change, which range from more stringent car and truck vehicle efficiency standards to the EPA's power plant carbon limits.

Rep. Lois Capps (D-Calif.) said the Obama administration was acting responsibly to ensure that regulations account for climate change, which “is already negatively impacting our economy, our environment, and human health.”

“These impacts will only grow worse over time,” Capps said.

“These changes include sea level rise, destruction of our agricultural systems and food security, increased rates of asthma which we see in Southern California, and more extreme storms and droughts,” the Democrat said. Estimates of the social costs imposed by carbon pollution “is a policymaking tool, not perfect, but useful, and will certainly improve over time,” she said.

Regional Impact Analysis Needed 

Democrats also complained that three of the four witnesses invited by Republicans to testify at the hearing were one-side in that they either questioned whether the planet is warming or argued that the administration has exaggerated the impacts of carbon pollution: Michaels; Kevin Dayaratna, senior statistician for the Heritage Foundation's Center for Data Analysis; and Scott Segal, attorney with the Bracewell & Giuliani LLP and founding partner of the Policy Resolution Group.

Only one of the witnesses—Michael Dorsey, co-founder of the U.S. Climate Plan, which advocates for climate action—backed the administration's approach to developing the cost estimate, though he suggested several potential improvements that could even raise the cost estimate.

For example, the models used to tally the cost figure do not account for costs that likely vary by region across the U.S., Dorsey said, and accounting for those costs would likely result in an even higher social carbon cost estimate than the $36-a-ton figure the White House set.

The cost of climate damages “should be weighted to reflect the per capita costs for regions that have suffered particularly” from severe weather and other climate impacts, Dorsey said.

To contact the reporter on this story: Dean Scott in Washington at dscott@bna.com

To contact the editor responsible for this story: Larry Pearl at lpearl@bna.com