Trump’s executive order includes a terrifying approach to the social cost of carbon.

Trump Says He’s Using the “Best Available” Data on Climate Change. It’s 14 Years Old.

Trump Says He’s Using the “Best Available” Data on Climate Change. It’s 14 Years Old.

The state of the universe.
March 29 2017 3:58 PM

Trump Thinks the “Best Available” Data on Climate Change Is From 2003

His new executive order insists on making far-reaching policy decisions using old data. The reasoning he offers up is laughable.

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By trying to turn back the policy clock, Trump’s denying the latest scientific and economic research, not bringing it to bear.

Konoplytska/iStock

There are many nonsensical assumptions made in President Trump’s new executive order, but one of the least defensible is the decision to calculate the “social cost of carbon” based on science from 2003.

The social cost of carbon puts a number on how much each ton of carbon dioxide emitted will cost us in the long run, thanks to its contribution to climate change. It’s calculated based on a big-picture estimation of how damaging climate change will be overall. This is obviously tough to estimate, but having even a ballpark number allows policymakers to have a rough way of comparing the potential future benefits of regulations to the small immediate savings. Currently priced at $36 a ton, the social cost of carbon is mostly used for internal calculations, but since 2008, government agencies such as the Environmental Protection Agency, the Department of Energy, and the Department of Transportation have had to take it into account when making regulations.

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Trump’s team has had its eye on this number for a while—in late January I wrote that while the existence of the number is mandated, how it’s calculated is flexible. Leaked memos had already shown that Trump’s people were targeting it, even though it technically wasn’t supposed to be recalculated until 2020.

With this new executive order, Trump has officially taken it on. His plan would return the calculation to its 2003 level—a time when regulators could get away with ignoring climate costs and the benefits to avoiding them because of how uncertain they were. It also disbands the nonpartisan group of federal scientists who make the estimate.

As the executive order explains, “In order to ensure sound regulatory decision making, it is essential that agencies use estimates of costs and benefits in their regulatory analyses that are based on the best available science and economics.” It then goes on to state that several assessments made by the Interagency Working Group on Social Cost of Greenhouse Gases “shall be withdrawn as no longer representative of governmental policy.” It doesn’t really give a reason for this.

It then mandates that “any such estimates are consistent with the guidance contained in OMB Circular A-4 of September 17, 2003 (Regulatory Analysis), which was issued after peer review and public comment and has been widely accepted for more than a decade as embodying the best practices for conducting regulatory cost-benefit analysis.”

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In sum, to make a calculation based on “the best available science,” they’re reverting to 2003 data.

The executive order itself doesn’t really bother to justify its decision, but here’s how a White House spokesperson explained it: “The previous administration put out its own estimates, not in a very transparent fashion, and in a fashion that we believe violates longstanding OMB policy. So, as a matter of federal policy, those estimates will no longer stand.”

Trump’s reasoning that the previous numbers “weren’t transparent” is laughable—check out the backup here. And also here. If Trump wanted to increase transparency, the National Academy of Sciences recently recommended more research on each step of the calculation, which could accomplish that goal. But by taking a Bush-era approach, Trump is indicating that he wants a higher discount rate, which is a bit like a reverse interest rate. The number is used to calculate how much less money earned or lost in the future is worth to people alive today. “A high discount rate means the long term doesn’t matter. The future isn’t worth very much,” says David Doniger, director of Natural Resources Defense Council’s climate and clean air program. The circular that Trump’s executive order cites doesn’t put a price on carbon, but the discount rate it suggests using is 7 percent. (The Obama-era discount rate was 3 percent.)

Of course, this is just smoke and mirrors—they just want the social cost of carbon to be as low as possible. Back in December, the head of Trump’s DOE transition team already planned to ditch the social cost of carbon, saying that “it would likely be reviewed and the latest science brought to bear,” resulting in a number that “would certainly be much lower than what the Obama administration has been using.”

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These justifications were tacked on later. Like many Trump policies, it doesn’t matter that it doesn’t make sense. For what it’s worth, the push to assess costs and benefits of regulations began in the Reagan era. But when it comes to the role of climate change in government decision-making, the Trump administration clearly aims to reduce it. To do that, it’s exploiting all the administrative levers it can pull and uncertainties in the social cost of carbon to try to lower its value so that it’s no longer relevant. In the speech he gave prior to signing the order on Tuesday, Trump never even used the phrase “climate change.”

By trying to turn back the policy clock, Trump’s denying the latest scientific and economic research, not bringing it to bear. “In no sense does that reflect an effort to draw on an understanding of the latest science, economics, and the law,” says Michael Greenstone, a University of Chicago economist.

If the number is lowered dramatically, emissions are likely to creep up via the elimination of the social cost of carbon’s current moderating effect on policies and regulations. The main effect will be on proposed policies; for example, the next time DOT or EPA officials evaluate the fuel economy standards of cars and trucks, they wouldn’t have to set such strict limits. Eventually there will be more heavily polluting vehicles on the road, less efficient appliances in the marketplace, etc.

All of this puts Trump against the consensus of the nation’s top scientists and economists. Scientists recently suggested that when actually using the best available research, the social cost of carbon could be as high as $220 per ton. At least when groups such as the Environmental Defense Fund and NRDC sue, they’ll have plenty of ammunition.

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Ramin Skibba is an astrophysicist turned science writer, and he’s based in San Diego. Follow him on Twitter.