Social cost of carbon, NEPA guidance in Trump’s crosshairs

Source: Hannah Hess, E&E News reporter • Posted: Monday, November 14, 2016

Once President-elect Donald Trump takes office, he could send an early signal to the oil and gas industry that he cares about their priorities by targeting White House guidance related to climate change.

Attacking nonbinding guidance, such as guidelines from the White House Council on Environmental Quality for how federal agencies should incorporate climate concerns into environmental reviews under the National Environmental Policy Act (NEPA), may be an easier lift than repealing regulations.

While Trump might want to roll back U.S. EPA’s Clean Power Plan, methane regulations and other actions subject to the public notice and comment process, taking aim at the Obama administration’s calculations of the social costs of greenhouse gases could be another way to unravel the climate agenda.

“Very early on in the Trump administration, you will see Obama executive orders undone,” said Stephen Brown, vice president for federal government affairs at oil refiner Tesoro Corp. He predicted the social cost of carbon and NEPA guidance, both of which have “far-reaching implications” for fossil fuel infrastructure, would be among the first to go.

Throughout the campaign, Trump made it clear he wants to remove the Obama administration’s regulatory threats to energy production, support hydraulic fracturing and bring back mining. The social cost of carbon, a metric that represents the long-term economic damage to society from each ton of carbon dioxide released into the atmosphere, has been used in more than 150 federal regulatory actions since 2008 at various dollar amounts, according to a recent report from the Congressional Research Service.

Amit Narang, a regulatory policy advocate for the nonprofit group Public Citizen, said Trump eliminating the social cost of carbon would wipe out the cost side of the ledger for climate action, creating a “one-sided analysis.”

Such action could be swift, if Trump ignores potential public opposition and outrage from environmentalists, Narang added. Issuing guidance is “not the kind of thing where technical requirements are lengthy,” he said, so it could be a preliminary step to tip the scales in favor of repealing rules down the road — a process that will likely take longer than Trump’s first 100 days in office.

The website launched yesterday by Trump’s transition team pledges to “rescind the coal mining lease moratorium,” eliminate EPA’s Waters of the U.S. rule and to “scrap the $5 trillion dollar Obama-Clinton Climate Action Plan and the Clean Power Plan” (E&E Daily, Nov. 10).

Trump’s team also promises to “streamline the permitting process for all energy projects, including the billions of dollars in projects held up by President Obama, and rescind the job-destroying executive actions under his Administration.”

Industry groups, including the American Energy Alliance, have requested Trump’s team consider the NEPA guidance and social cost of greenhouse gases.

In a questionnaire released by AEA during primary season, Trump responded to questions about whether he supports a carbon tax and whether agencies should use the social cost of carbon in rulemakings with a succinct “no and no” (Greenwire, March 30).

“Those are low-hanging fruit, but they may or may not decide to lead with those. I think we’ve got a good chance to reset the energy and environmental policy space,” said AEA President Thomas Pyle. He said a “smart, systematic, holistic” approach is needed, involving immediate action that would build up the capital to make meaningful structural changes.

Support exists among Republicans on Capitol Hill, who have introduced legislation to bar the Department of Energy and EPA from using the government’s social cost of carbon calculation in rulemaking (Greenwire, July 8). They also question how the government came to its estimates.

A working group made up of federal agencies last revised the estimate in 2015 to $36 per metric ton of CO2. That cost will rise to $50 a metric ton in 2030 and $69 a metric ton in 2050.

Environmentalists argue climate change already costs communities billions of dollars, in damages from extreme weather and rising seas. They claim the calculation helps determine savings from government actions to improve energy efficiency and reduce carbon emissions.

James Goodwin, a regulatory expert with the Center for Progressive Reform, said getting rid of the social cost of carbon might not have a huge impact on rules already finalized or the long administrative process Trump will have to go through to eliminate them.

“This would be a political statement about how they view the issue of climate change,” Goodwin said, sending a signal to public interest groups, industry and the international community about where Trump’s administration stands.

Trump’s transition team has declared regulatory reform a “cornerstone” to its agenda and promised a temporary moratorium on all new regulations. They acknowledge the need for reasonable regulations to ensure public safety and proper stewardship of “our National Parks’ crown jewels” but said that “this can be accomplished without the profound damage to our economy and our freedoms that is currently inflicted by the regulatory bureaucracy.”

Goodwin said for all the anti-establishment momentum of the campaign, a Trump administration appears set to “basically carry on the establishment Republican’s anti-regulatory wish list.”