Context:

The Trump administration has directed federal agencies to cease estimating the economic impact of climate change when formulating policies and regulations, except where required by law. This decision effectively halts the use of the 'social cost of carbon,' a metric that assesses the economic damage caused by carbon emissions, which was utilized by previous administrations to enforce stricter greenhouse gas limits. Critics, including scientists and environmental groups, argue that this policy ignores the scientific consensus on the detrimental effects of climate change. The American Petroleum Institute and some Republican attorneys general support this move, viewing the social cost of carbon as a hindrance to industry. The new policy may facilitate the rollback of climate regulations, but could face legal challenges for neglecting to account for climate change in project approvals like pipelines or power plants.

Dive Deeper:

• The directive from the Trump administration instructs agencies to disregard the economic damages of climate change in policy-making, except as legally mandated, thus sidelining the 'social cost of carbon' used for over two decades to evaluate policy costs and benefits.

• Under the Biden administration, the social cost of carbon was increased to $190 per ton to reflect inflation and reinforce emission limits, contrasting with the first Trump administration's reduction of this cost to less than $5 per ton.

• Jeffrey B. Clark, acting administrator of the White House Office of Information and Regulatory Affairs, expressed skepticism about the scientific consensus on pollution's role in climate change, citing uncertainties in calculating its economic impact.

• Environmentalists and scientists criticize the policy as a denial of reality, arguing that it ignores clear evidence of climate change's increasing harm, as noted by climate scientist Robert E. Kopp.

• Economist Michael Greenstone, who conceptualized the social cost of carbon, argues that the new guidance prioritizes subjective opinions over scientific facts, likening it to 'Alice in Wonderland's Humpty Dumpty.'

• The American Petroleum Institute and some Republican attorneys general oppose the social cost of carbon, viewing it as a threat to industry, with arguments that the metric could unjustly justify government actions to reduce emissions.

• Legal experts like Richard L. Revesz suggest the policy could ease the rollback of climate regulations, though it may lead to legal challenges for failing to consider climate impacts in project approvals.