President Biden on Friday raised the social cost of carbon, a little-known but important number that informs a wide range of policies that regulate industry and energy production. Biden’s action restores the figure to the price of the Obama era and restores a working group that calculates the economic impact of pollution.
The social cost of carbon is an estimate of the long-term damage, in dollars, of carbon to our environment. Former President Trump dissolved the inter-agency working group (IWG) that determined the number in 2017 and directed agencies to drastically devalue the social cost of carbon. Biden’s announcement restores the IWG and raises the cost of carbon to $ 51 per tonne of carbon dioxide.
That number, however, was agreed by the IWG before the group’s dissolution in 2017 and does not reflect “recent developments in science and economics” of climate change, according to a technical support document released by the working group on Friday. The IWG is now tasked with recalculating the social cost of carbon – as well as the social cost of other greenhouse gases – and providing an updated figure by January 2022.
“A more complete update that follows the best science takes time. That’s why we are quickly restoring previous estimates as an interim step,” said Heather Boushey, a member of the president’s Council of Economic Advisers, in a statement from the White House on behalf of of the co-chairs of the IWG. “With these estimates in place, the Interagency Working Group will continue its critical work to assess and incorporate the latest scientific and economic climate research and respond to the recommendations of the National Academies as we develop a more complete review of the estimates for release year.”
Activists and experts say the number needs to be significantly higher if the United States is to live up to its commitments under the Paris Agreement, a climate treaty dedicated to reducing greenhouse gas emissions in more than 180 countries. Mr. Trump withdrew from the agreement in 2020, and Mr. Biden reentered his first day in office.
Professor Joe Stiglitz of Columbia University and Professor Lord Nicholas Stern of the London School of Economics and Political Science said in a statement earlier this month that Biden’s decision to quickly get rid of the Trump administration’s “laughable estimate” was “understandable” “, but” defective. ” Stiglitz and Stern say the United States needs to double the value of the Obama era to $ 100 per tonne of carbon dioxide “in order to ensure that policies and regulations are in line with the objectives of the Paris Agreement”.
“The low value adopted by the Obama administration was based on the production of economic models that are known to be inadequate and ignore the greatest potential impacts of climate change,” they wrote. “We trust that the Biden government will make a complete assessment of the social cost of carbon before publishing its final assessment of the value next year.”
Other experts believe the cost should reach $ 125 per ton, as New York State estimated last year.
“As this process progresses, we are committed to involving the public and the various stakeholders, seeking the advice of ethics experts and working to ensure that the social cost of greenhouse gases takes into account climate risk, environmental justice and intergenerational equity, ”says the White House Declaration. “The result will be even more solid estimates based on science, developed through a transparent and robust process.”