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Federal Citations to the Social Cost of Greenhouse Gases

Federal Citations to the Social Cost of Greenhouse Gases

Full Title: Federal Citations to the Social Cost of Greenhouse Gases
Author(s): Jane A. Leggett
Publisher(s): Congressional Research Service
Publication Date: March 1, 2017
Full Text: Download Resource
Description (excerpt):

Executive Order 12866 requires that federal agencies assess the cost and the benefits of intended regulations as part of their regulatory impact analyses (RIAs). The 1993 executive order stated that “recognizing that some costs and benefits are difficult to quantify, [each agency shall] propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs.”1 In 2008, a federal appeals court remanded a rule in part because, despite acknowledging the uncertainty, the agency did not monetize climate-related benefits of anticipated emission reductions in its RIA. 2 In response, in 2008, federal agencies began using various values of the social cost of carbon (SCC or SC-CO2) as a means to estimate the climate-related benefits of abating emissions of carbon dioxide (CO2). Since then, they have begun using similar estimates for the benefits of reducing emissions of other greenhouse gases (GHG), including methane (CH4) and nitrous oxide (N2O).

The SC-CO2 is an “estimate of the monetized damages associated with an incremental increase in carbon emissions in a given year,” according to a federal Interagency Working Group (IWG). 3 This group4 developed a range of SC-CO2 values “to make it possible for agencies to incorporate the social benefits from reducing carbon dioxide emissions into cost-benefit analyses of regulatory actions that have small, or ‘marginal,’ impacts on cumulative global emissions.” 5 In the United States, the SC-CO2 has been expressed as U.S. dollars per metric ton of carbon dioxide ($/t CO2) for a given year’s emissions. Agencies primarily used their own, differing SC-CO2 values until the IWG recommended in 2009 a set of values to improve consistency across regulations. Estimations of the social cost of methane (SC-CH4) and the social cost of nitrous oxide (SC-N2O) have used methods similar to those for the SC-CO2. Federal agencies began using the SC-CO2 in regulatory actions in 2008, the SC-CH4 in 2015, and SC-N2O in 2016. Since August 2016, federal agencies collectively call these analyses and applications the social cost of greenhouse gases (SC-GHG).

This report compiles a table of Federal Register notices of 160 federal regulatory actions that specifically cite the SC-CO2, SC-CH4, SC-N2O, or SC-GHG. The actions listed in Table 1 were identified by searches online of the Federal Register6 for the terms “social cost of carbon,” “social cost of methane,” “social cost of nitrous oxide,” and “social cost.” The table below reflects searches completed by March 20, 2017. Table 1 first lists the actions that used the SCCO2 estimate and then the actions citing other SC-GHG estimates. The table includes proposed, final, and additional actions, sometimes for the same rule (so a simple count of entries in the table would double-count the number of regulations with benefits calculated using the SC-GHGestimates). All non-regulatory notices are omitted, including notices of funding availability for grant programs. One column identifies which version of the SC-CO2, SC-CH4, or SC-N2O was cited in each regulatory action. In this report, CRS does not analyze the social cost values or methods used in the cited agency actions. In addition, this report does not review or analyze the listed actions.

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