DOE Says No to Reversing Rule that Raises Carbon Costs

Call it a win for environmentalists. For now.

What has been defended by the Obama Adminstration as a pragmatic review of the cost of carbon emissions to average Americans was challenged recently by the Conservative-leaning Landmark Legal Foundation as a political ploy by which to spin the benefits of carbon regulation.

“DOE's unannounced, dramatically increased, and improperly altered ‘Social Cost of Carbon’ valuation presented for the first time in this microwave oven regulation will certainly become the standard by which all other agencies will place a purportedly beneficial economic value on new carbon regulations.”

On June 17, 2013, the Office of Management and Budget raised the cost of carbon from $21 to $35 per metric ton (pmt). Critics called foul, saying it would raise utilities and unfairly benefit those who want stiffer regulations for carbon emissions.

In August, the LLF filed a petition to remove information regarding “social cost of carbon” from a rule governing microwaves. The organization argued that the rule contravenes the Administrative Procedure Act, which tells agencies how they can set regulations. It also said that  that the rule included information about the administration’s revised (higher) 2013 social cost of carbon estimates in it that the public should have had the right to comment on. It called attention to the Obama Administration’s earlier statement that a comment period “should generally be at least 60 days.”

The DOE’s response December 24 denied the petition, saying that it had published the rule back on August 16, 2013 and “[b]ased upon its evaluation of the petition and careful consideration of the public comments,” it had decided to deny the petition.

The heart of the LLF’s argument, it would seem, is that that the administration’s actions didn’t appear to reinforce the spirit of generosity that it had advised agencies to show when asking for comments. It gave the expected 60 days, nothing more and nothing less. Comment periods, however, have been more an issue for repeat objection during previous administrations, which is why the Obama Administration advocated for a minimum of 60-day comment periods for all agencies.

But the real bone of contention is the effect that this ruling could have to proposed projects like the Keystone XL Pipeline, which the president has vowed to stop if it appears that the project would increase global warming.

Still, it’s hard to understand how it would. The “social cost of carbon estimates” are exactly that: how carbon, being generated today, affect Americans, their pocketbooks, health and property. Would a $35 pmt assessment for carbon emissions really stand in the way of Keystone more than a cost of $21 pmt if it is recognized that there is a significant cost to carbon emissions that have already been blamed for climate change and environmental injustice issues?

The new rule does underscore the need for change. It does give that further reason to energy companies to upgrade to less-expensive power sources and work toward developing an energy grid that is multi-sourced and more environmentally supportive. And it makes it painfully clear to those who deny that there is such a thing as global warming, that there is a real and tangible way to measure climate change before it hits coastlines.

Still, it’s curious that the Obama Administration expedited this rule in the manner that it did. Presented this way, the rule clearly draws objections, not support, from the other side of the political isle and provokes debate from corners that may not have yet joined the fray. It’s likely, given the amount of criticism that the DOE's decision has received, that we haven’t heard the end of the debate about the costs of carbon emissions, or their contentious administrative rulings.

Wausau WI Power Plant - Image by Royalbroil