President Biden on Friday raised the social cost of carbon, a little-known but important figure that is the basis for a wide variety of policies that regulate industry and energy production. Mr. Biden’s move restores numbers to the Obama-era price tag 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 Interagency Working Group (IWG) that set the number in 2017, and ordered agencies to drastically devalue the social cost of carbon. Biden’s announcement restores the IWG and reduces the cost of carbon to $ 51 per ton of carbon dioxide.
However, that number was settled by the IWG before the group disbanded in 2017, and does not reflect “ recent developments in the science and economics ” of climate change, according to a technical support document released by the working group on Friday. . The IWG has now been mandated to recalculate the social costs of carbon – as well as the social costs of other greenhouse gases – and provide an updated number by January 2022.
“A more complete update that follows the best science takes time. Therefore, we are quickly reverting to earlier estimates as an intermediate step,” said Heather Boushey, a member of the president’s Council of Economic Advisers, in a White House statement on behalf of the IWG Co-Chairs. With these estimates in effect temporarily, the Interagency Working Group will continue its critical work to evaluate and incorporate the latest climate science and economic research and respond to the National Academies’ recommendations as we develop a more complete revision of the estimates for publication within one year. “
Activists and experts say the number must be significantly higher if the United States is to deliver on the pledges made under the Paris Agreement, a climate treaty aimed at reducing greenhouse gas emissions in more than 180 countries around the world. Mr. Trump withdrew from the agreement in 2020, and Mr. Biden entered it again on its first day at work
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 Mr Biden’s decision to quickly get rid of the Trump’s ‘laughable estimate’. government was “understandable” but “flawed.” Stiglitz and Stern say the US needs to double the Obama-era figure to $ 100 per ton of carbon dioxide “to ensure policies and regulations are in line with the goals of the Paris Agreement.”
“The low value adopted by the Obama administration was based on the output of economic models that are known to be inadequate and ignore the greatest potential impacts of climate change,” they wrote. “We trust that Biden’s administration will conduct a thorough assessment of the social cost of carbon before publishing its final assessment of its value next year.”
Other experts believe the cost should be as high as $ 125 per ton, as New York State estimated last year.
“As this process continues, we are committed to engaging with the public and diverse stakeholders, seeking the advice of ethical experts and ensuring that the social costs of greenhouse gases take into account climate risks, environmental fairness and intergenerational equality” , the White House statement reads. “The result will be even stronger science-based estimates developed through a transparent and robust process.”