Social Cost of Carbon: Biden raises key metric for greenhouse gases

March 5, 2021

Contributing to climate change is once again expensive — at least in the eyes of the federal government.
That’s after the Biden administration on Feb. 26th raised the social cost of carbon to about $51 per ton. The figure factors into a wide variety of policy decisions including EPA regulations and government spending according to a March 1, 2021 E&E News report.

The move dramatically raises the value of carbon, which had fallen to as little as $1 under President Trump. The figure used by Biden mirrors estimates from the Obama-era, when it was $50 a ton. And it stands to go higher in January after the administration completes a comprehensive overhaul of carbon’s value.

In a post on the White House’s blog Friday, White House Council of Economic Advisers member Heather Boushey said the new figures would enable agencies to “immediately and more appropriately account for climate impacts in their decision-making while we continue the process of bringing the best, most up-to-date science and economics to the estimation of the social costs of greenhouse gases.”

The new interim figures are likely to appear in actions the Biden administration takes in its first year, including EPA draft rules for both automobiles and oil and gas infrastructure, along with leasing programs and government procurement decisions. They’ll balance out the cost of regulation, arguing for more stringent efforts to address global warming.

Ultimately, the Biden administration used the Obama-era formula for a central social cost of carbon for 2020 of $51 a ton, with methane and nitrous oxide, which both pack a stronger climate punch than CO2, at $1,500 a ton and $18,000 a ton in 2020, respectively. These would rise to $85 a ton for CO2, $3,100 a ton for methane and $33,000 for nitrous oxide by 2050 as damage from warming is expected to progress.

These social cost figures replace the $1-to-$7-per-ton CO2 values and $55-per-ton methane value of the Trump administration, which were produced by ignoring all climate damages that occur outside the continental United States. The move dramatically raises the value of carbon, which had fallen to as little as $1 under President Trump.

What this means to you
The Biden administration on Feb. 26th raised the social cost of carbon to about $51 per ton. The figure factors into a wide variety of policy decisions including EPA regulations and government spending.

MIRATECH can help
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