Amid the momentous events of today, President Biden has plans to exhaust his hand signing executive orders (see note below re broken link. note: that is a broken link) to reverse some of Donald Trump’s worse excesses and to start the process of righting the ailing Ship of State.
Among these is an item that will likely get minimal press attention but which is a truly momentous item to set the Federal Government on the path for serious climate action.
Re-establishing the Interagency Working Group on the Social Cost of Greenhouse Gases (GHG) and directing the issuance of an interim social cost of GHG schedule to ensure that agencies account for the full costs of GHG emissions, including climate risk, environmental justice and intergenerational equity
Social Cost of Greenhouse Gases (or, as more often called, a Social Cost of Carbon: SCC) has been described, in the past, “as the most important number you’ve never heard of“. The Interagency Working Group was established in the Obama-Biden Administration (in 2009) with a “commitment to ensure that the social cost of carbon estimates continue to reflect the best available science and methodologies”.
A SCC places a figure on the value of the economic impact of CO2 emissions to use in everything from regulation writing to discussions as to carbon legislation. Set the price too high and the economy could take a near-term hit in terms of lost opportunity costs for more sensible investment choices. Set the price too low and, well, the devastating impacts of catastrophic climate chaos could result as the economy under invests in climate mitigation and adaptation. The Obama Administration figure was $50 even as much analysis suggested that figure was (significantly) too low. The Trump Administration lowered it to $7 while, in fact, essentially eliminating it for decision-making (thus, functionally, a $0 value if not positive valuation for CO2 emissions). Watching glaciers melt, species go extinct, fires across the nation, allergy sufferers suffer more, and other climate crisis impacts clearly shows a $7 figure is too low.
As of later today, the U.S. government will (again) be pricing (even if inadequately) climate impacts into analysis, decision-making, and expenditures.
To be clear, this is both substantive and symbolic action.
- Substantive in influencing and driving decision-making and action across the Federal Government.
- Symbolic in that — as with the also planned rejoining of the Paris Agreement — President Biden, on his first day in office, is taking tangible steps to Act On Climate. This is a downpayment for more serious action to come.
Notes:
- See after fold for the actual language from the Executive Order re the Interagency Working Group on Greenhouse Gas Emissions.
- The first link in the post is to material that was published on the BuildBackBetter.gov web site. After this was written, that site transferred to WhiteHouse.gov with President Biden’s swearing in but the actual BBB material doesn’t seem to have yet transferred over (as of last check). Here is the White House Actions site with a plethora of 20 January 2021 items. For a summary of President Biden’s first day executive actions, see this CNN story.
The actual Executive Order was signed after this post was written. There is a lot in the Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis, on environmental justice, canceling the Keystone XL pipeline’s permit, and more. The relevant section on social cost of greenhouse gases follows:
Sec. 5. Accounting for the Benefits of Reducing Climate Pollution. (a) It is essential that agencies capture the full costs of greenhouse gas emissions as accurately as possible, including by taking global damages into account. Doing so facilitates sound decision-making, recognizes the breadth of climate impacts, and supports the international leadership of the United States on climate issues. The “social cost of carbon” (SCC), “social cost of nitrous oxide” (SCN), and “social cost of methane” (SCM) are estimates of the monetized damages associated with incremental increases in greenhouse gas emissions. They are intended to include changes in net agricultural productivity, human health, property damage from increased flood risk, and the value of ecosystem services. An accurate social cost is essential for agencies to accurately determine the social benefits of reducing greenhouse gas emissions when conducting cost-benefit analyses of regulatory and other actions.
(b) There is hereby established an Interagency Working Group on the Social Cost of Greenhouse Gases (the “Working Group”). The Chair of the Council of Economic Advisers, Director of OMB, and Director of the Office of Science and Technology Policy shall serve as Co-Chairs of the Working Group.
(i) Membership. The Working Group shall also include the following other officers, or their designees: the Secretary of the Treasury; the Secretary of the Interior; the Secretary of Agriculture; the Secretary of Commerce; the Secretary of Health and Human Services; the Secretary of Transportation; the Secretary of Energy; the Chair of the Council on Environmental Quality; the Administrator of the Environmental Protection Agency; the Assistant to the President and National Climate Advisor; and the Assistant to the President for Economic Policy and Director of the National Economic Council.
(ii) Mission and Work. The Working Group shall, as appropriate and consistent with applicable law:
(A) publish an interim SCC, SCN, and SCM within 30 days of the date of this order, which agencies shall use when monetizing the value of changes in greenhouse gas emissions resulting from regulations and other relevant agency actions until final values are published;
(B) publish a final SCC, SCN, and SCM by no later than January 2022;
(C) provide recommendations to the President, by no later than September 1, 2021, regarding areas of decision-making, budgeting, and procurement by the Federal Government where the SCC, SCN, and SCM should be applied;
(D) provide recommendations, by no later than June 1, 2022, regarding a process for reviewing, and, as appropriate, updating, the SCC, SCN, and SCM to ensure that these costs are based on the best available economics and science; and
(E) provide recommendations, to be published with the final SCC, SCN, and SCM under subparagraph (A) if feasible, and in any event by no later than June 1, 2022, to revise methodologies for calculating the SCC, SCN, and SCM, to the extent that current methodologies do not adequately take account of climate risk, environmental justice, and intergenerational equity.
(iii) Methodology. In carrying out its activities, the Working Group shall consider the recommendations of the National Academies of Science, Engineering, and Medicine as reported in Valuing Climate Damages: Updating Estimation of the Social Cost of Carbon Dioxide (2017) and other pertinent scientific literature; solicit public comment; engage with the public and stakeholders; seek the advice of ethics experts; and ensure that the SCC, SCN, and SCM reflect the interests of future generations in avoiding threats posed by climate change.