Senators urge FERC to use social cost of carbon in decision-making

A group of senators recently lodged a formal argument with the Federal Energy Regulatory Commission (FERC) urging the agency to incorporate the social cost of carbon in its evaluation of energy projects.

The social cost of carbon is a metric for measuring the long-term harm of carbon pollution and climate change. It includes reductions in agricultural productivity, public health effects, property damage and changes in energy costs.

In March 2017, President Donald Trump issued an executive order that dissolved an interagency working group charged with formulating the social cost of carbon and withdrew the guidance it had issued. The Trump Administration then directed agencies to use an older Office of Management and Budget policy to monetize the value of greenhouse gas emissions from changes in federal regulation.

FERC does not currently use the social cost of carbon in its cost-benefit analysis.

“As FERC evaluates projects that contribute to greenhouse gas pollution, it must have a comprehensive and defensible estimate of the total costs of greenhouse gas pollution,” the senators wrote in their letter. “The [social cost of carbon] is commonly used to evaluate the economic costs of greenhouse gas pollution, but FERC continues to reject it, effectively taking the position that carbon pollution has no cost on society. That is clearly wrong.”

The senators who signed the letter include Sheldon Whitehouse (D-RI), Jeff Merkley (D-OR), Ben Cardin (D-MD), Chris Van Hollen (D-MD), Edward J. Markey (D-MA), and Brian Schatz (D-HI).