The Sustainable Economy by Robert Devine

Author:Robert Devine [Devine, Robert]
Language: eng
Format: epub
Publisher: Knopf Doubleday Publishing Group
Published: 2020-10-27T00:00:00+00:00

AMERICA FIRST

Global warming is, well, global. We don’t say “national warming.” Whether emitted in Poland or Brazil, rising greenhouse gases end up in the one and only atmosphere we all share. This shared fate provides the basic ethical rationale for using a global social cost of carbon. A global SCC estimates the impact of a ton of carbon dioxide on everyone on the planet.

The interagency working group used a global SCC, as do most nations that employ a social cost of carbon. But the Trump administration has rejected the global perspective in favor of a domestic SCC. Trump made his underlying rationale clear in a speech about withdrawing the United States from the Paris climate agreement: “I was elected to represent the citizens of Pittsburgh, not Paris.” Never mind that the residents of Pittsburgh will likely suffer just as much as Parisians from Trump’s climate policies. Assuming the use of a domestic SCC survives legal challenges and is implemented, it means the federal government will only account for the impact that a ton of CO2 has within the boundaries of the United States. Like a high discount rate, a domestic estimate drastically reduces the SCC. In the case of a proposed climate regulation that hinges on cost-benefit analysis, either a high discount rate or a domestic SCC can make its adoption unlikely. In combination, they make adoption nearly impossible.

Take the Clean Power Plan (CPP). Arguably the centerpiece of Obama’s climate agenda, the CPP aimed to greatly reduce greenhouse gas emissions from power plants. Using the then-prevailing SCC, with its global scope and 3 percent central discount rate, the EPA estimated that by 2030 the CPP would return annual net benefits between $26 billion and $45 billion—far more than the cost to industry of abiding by the plan. But then Trump moved into 1600 Pennsylvania Avenue and appointed a staunch climate skeptic and fossil fuel booster, Scott Pruitt, to head the EPA. Before he resigned in scandalous ignominy a year and a half later, Pruitt devised a scheme to scuttle the CPP by, in part, proposing a new approach using a domestic SCC and discount rates of 7 percent and 3 percent. The IWG’s updated SCC had climbed to about $40 just before Trump’s executive order vaporized the working group. And remember, many experts considered $40 much too low. But by applying a domestic SCC and a 7 percent discount rate, Pruitt’s recalculation sank the SCC to an impotent $1 ($6 at the 3 percent rate). As of this writing, the whole matter is up in the air; the Trump administration has issued a fossil-fuel-friendly plan intended to replace the CPP, but it faces tough courtroom battles. Predictably, the Trump plan features a domestic SCC and a 7 percent discount rate.

Pruitt is not the first person to advocate for a domestic SCC. Ever since the SCC appeared, the usual suspects—the fossil fuel industry, many Republican politicians, an array of conservative think tanks—have pushed for a domestic perspective. For example,

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