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A Hard Look’s Gonna Come: The Energy Executive Order, NEPA, and the Social Cost of Carbon

Wednesday, June 6, 2018

In March of last year, President Trump issued fossil-fuel friendly Executive Order No. 13783, Promoting Energy Independence and Economic Growth. Section 5 of this Order directed agencies to discontinue use of the “social cost of carbon” (SCC), a protocol developed under the Obama Administration to monetize the impacts of climate-related disasters and disruption. In the June issue of ELR’s News & Analysis, Doyle Elizabeth Canning argues this directive conflicts with existing NEPA requirements and should be challenged in the courts.

The social cost of carbon quantifies the economic impact of greenhouse gas emissions.

The SCC has been used to comply with cost-benefit analysis requirements when greenhouse gas (GHG) emissions are a major factor. Called “the most important number you’ve never heard of,” it attaches dollar figures to the impact of GHG emissions on society. The SCC schemata is based on three widely cited predictive models, all of which incorporate variables like sea-level rise, land loss, changes in agricultural production, methane emissions, and ocean heating, along with population, gross domestic product, and other tools of economic forecasting. Expressed in terms of dollars per ton of carbon, the SCC is designed for use in rulemakings, regulatory impact analyses, and assessing costs and benefits of complex regulatory frameworks.

NEPA, meanwhile, prescribes how agencies must account for environmental impacts and engage the public in approval processes for projects that impact the environment. It requires agencies to take a “hard look” at environmental impacts, which include direct GHG emissions and can extend to downstream emissions—as well as the monetized cost of those emissions.

But as Canning discusses, Trump’s Executive Order mandates that federal agencies may no longer use the SCC to calculate the dollar value of GHG impacts. This leaves agencies with two options: (1) leave GHG impact costs out of NEPA analysis entirely and invite litigation; or (2) create a new carbon accounting protocol that makes the price point lower, and risk litigation for arbitrary and capricious changes to the GHG monetization framework.

This conflict between the Executive Order and the judicially sanctioned trend of carbon accounting for downstream emissions creates litigation costs for agencies and novel legal strategies for public interest groups seeking to stop carbon-intensive infrastructure projects. Canning’s article offers a comprehensive treatment of Trump’s directive and its NEPA implications, and canvasses precedent for NEPA challenges to the SCC rollback.

In this epoch of the Anthropocene, NEPA’s “hard look” ethic remains relevant and crucial, warns Canning. A robust accounting of both downstream emissions and their monetized costs using the SCC is essential—without revealing these impacts, the public and policymakers cannot know the true consequences of continued fossil fuel expansion.

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