The White House has ordered federal agencies to stop considering the economic damage caused by climate change when writing regulations, except in cases where it is “plainly required” by law.
The directive effectively shelves a powerful tool that has been used for more than two decades by the federal government to weigh the costs and benefits of a particular policy or regulation.
The Biden administration had used the tool to strengthen limits on greenhouse gas emissions from cars, power plants, factories and oil refineries.
Known as the “social cost of carbon,” the metric reflects the estimated damage from global warming, including wildfires, floods and droughts. It affixes a cost to the economy from one ton of carbon dioxide pollution, the main greenhouse gas that is heating the planet.
When considering a regulation or policy to limit carbon pollution, policymakers have weighed the cost to an industry of meeting that requirement against the economic impact of that pollution on society.
During the Obama administration, White House economists calculated the social cost of carbon at $42 a ton. The first Trump administration lowered it to less than $5 a ton. Under the Biden administration, the cost was adjusted for inflation and jumped to $190 per ton.
But “it is no longer federal government policy to maintain a uniform estimate of the monetized impacts of greenhouse gas emissions,” Jeffrey B. Clark, the acting administrator of the White House Office of Information and Regulatory Affairs, wrote in a May 5 memo.
In his memo, Mr. Clark doubted the scientific consensus that pollution from things like transportation and industry is heating the planet.
He argued that there were too many “uncertainties” in calculating the figure, including “whether and to what degree any supposed changes in the climate are actually occurring as a consequence of anthropogenic greenhouse gas emissions.”
Scientists and environmental groups say that the Trump administration is denying reality.
“It’s very clear that climate change is causing harms to people in the United States and around the world, and that these harms are growing worse with increasing warming,” said Robert E. Kopp, a climate scientist at Rutgers University. “By effectively saying the social cost of carbon should be treated as zero, this policy arbitrarily and capriciously ignores the science and economics of climate change.”
Michael Greenstone, an economist at the University of Chicago who first came up with the idea of the social cost of carbon as a justification for climate policy, said the new guidance means “feelings, not facts” would guide federal policy.
“The decision is like Alice in Wonderland’s Humpty Dumpty, who said ‘Words can mean whatever I choose them to mean,’” Mr. Greenstone said. “So, yes, it is possible to have policies that assume climate change will have no impacts, but that does not make it so.”
The American Petroleum Institute, which lobbies on behalf of the oil and gas industry, has called to “limit the application of the social cost of carbon” to only the construction phase of certain oil and gas projects. Republican attorneys general have fought the social cost of carbon and described it as an assault on industry.
That’s because when the metric is used, the economic benefits of, say, reducing emissions from cars or power plants, rises drastically. The higher the estimate of benefits, the greater the government’s justification for compelling the industries to cut back on pollution.
“This number means that the government has a weapon that it can use to justify anything it wants to do,” Elizabeth Murrill, then the solicitor general of Louisiana, said in 2023 as the Biden administration ramped up its cost estimate.
Richard L. Revesz, a climate law expert who served as the regulatory chief in the Biden administration, said the new policy would make it easier for the Trump administration to roll back climate regulations.
It remains unclear whether environmental groups will sue the administration for not considering the social cost of carbon. But analysts said the approval of projects, like pipelines or power plants, would most likely face legal challenges on the grounds that the administration was failing to take climate change into account.
