US to analyze carbon 'cost' of federal programs

President Joe Biden is ordering federal agencies to start folding in estimates of the "social cost of carbon" into their annual budgets, procurement decisions and in environmental reviews.

The new directive from the White House would require federal agencies to take a closer look at how their activities and purchases could affect the climate, using an estimate that finds emitting a metric tonne of CO2 causes $120-340 of damage to society. Federal agencies will be able to make "clear-eyed decisions" by using the metric, the White House said.

The US government began using the "social cost of carbon" more than a decade ago, offering a way to estimate in dollar terms how a regulation would affect the climate. Former president Donald Trump cut its value to a fraction of what many scientists say is backed by evidence, an action Biden reversed after taking office.

Federal agencies have started using the climate estimate more often, such as to review the effects of expanding oil and gas projects. Biden's directive encourages agencies to use the metric for regular activities, such as discretionary grants and regular programs, while also incorporating the estimate in reviews prepared under the National Environmental Policy Act.

Democrats support using the estimate more often because using the full costs of carbon emissions will cut "taxpayers' bills for climate-related disasters over the long term," US senator Sheldon Whitehouse (D-New York) said. But Republicans believe the estimate is not sufficiently supported and will be used to block fossil fuels.

"The math doesn't add up, and in fact, doesn't exist," US Senate Energy and Natural Resources Committee ranking member Shelley Moore Capito (R-West Virginia) said.

Biden's order comes as the US Climate Alliance, a coalition of governors from 25 states, made commitments to decarbonize buildings in part by increasing the use of heat pumps. New York, Washington, California and Massachusetts are among the states that made new commitments.

By Chris Knight