US starts to use updated carbon 'cost' metric

President Joe Biden's administration has started to use higher estimates of the societal damages from greenhouse gas emissions into regulations it is writing to fight climate change.

The US Environmental Protection Agency (EPA), in a proposal last week meant to limit methane emissions from oil and gas facilities, used the new estimates of the "social cost of carbon" in a supplemental economic analysis. That marked the first time the new estimates, which were initially set to be finalized last January, were released in draft form.

EPA used the older carbon cost estimates — which were first developed in 2016 and peg the societal damage of methane emissions at $1,100-2,800/metric tonne in 2035 — when drafting the methane regulations. But if EPA used the updated estimates, which peg methane damage at $2,300-3,600/metric tonne based on newer research, the projected climate benefits would rise to $65bn over 2023-35, rather than $48bn.

The carbon cost estimates released last week are "closer to the current frontier of climate science and economics" and address many of the recommendations the National Academies of Science made through a 2017 report, EPA said as part of the methane rule.

Republican attorney generals in Louisiana and other states have unsuccessfully filed lawsuits trying to prevent the use of the social cost of carbon in regulations, based on concerns the Biden administration will use the estimates to justify more more stringent rules. US courts have found that states can only file lawsuits once the estimates are used for regulatory purposes.

EPA is accepting comments through 1 December on a slate of 14 potential candidates that will provide peer review of the updated social cost of carbon estimates. EPA has yet to say when it intends to finalize the updated estimates.

By Chris Knight