Biden Orders Federal Agencies to Integrate 'Social Cost of Carbon' in Operations

In a recent move, President Joe Biden has directed federal agencies to integrate the "social cost of carbon" into various aspects of their operations, ranging from annual budgeting to procurement procedures and environmental evaluations. This White House mandate compels these agencies to scrutinize their activities and purchases in terms of potential climate impact.

They will employ an estimate which suggests that the emission of a metric tonne of CO2 results in societal damages valued between $120 and $340. This metric is envisioned to empower federal agencies to make more informed decisions that factor in the broader environmental impact.

The concept of determining the "social cost of carbon" is not novel for the US government. Introduced over a decade ago, it was conceived as a mechanism to monetize the climate implications of various regulations. However, this metric underwent a significant reduction during former President Donald Trump's tenure, a decision many experts critiqued as not being evidence-backed. President Biden reinstated its earlier value upon assuming office.

Lately, federal agencies have started referencing this climate estimate more frequently, especially when assessing the implications of amplifying oil and gas ventures. With Biden's new directive, there's an emphasis on broader application of this metric across routine operations, such as discretionary grants and regular schemes. Moreover, it's being integrated into evaluations undertaken under the National Environmental Policy Act.

This move has garnered mixed reactions. Democrats, including US Senator Sheldon Whitehouse from New York, advocate for its more extensive application. They argue that by acknowledging the full costs of carbon emissions, future climate-associated financial burdens on taxpayers can be mitigated. Contrarily, some Republicans express skepticism about the metric's robustness and anticipate it will hinder the fossil fuel industry. In the words of US Senate Energy and Natural Resources Committee's ranking member Shelley Moore Capito from West Virginia, the calculations underlying this estimate are questionable.

Concurrent with this directive, the US Climate Alliance, comprising governors from 25 states, announced their pledge to decarbonize infrastructures. This will partly be achieved by promoting the use of heat pumps. States such as New York, Washington, California, and Massachusetts have made new commitments in this direction.

According to the article by Procurement Resource, President Joe Biden has instructed federal agencies to incorporate the "social cost of carbon" into their operations, using a metric that values CO2's societal damages between $120 and $340 per metric tonne. This aims to better account for environmental impacts in decision-making.

Though introduced over a decade ago, this metric's value was diminished under President Trump but reinstated by Biden. Now used more broadly, it evaluates oil, gas, and even regular operations. While some Democrats support its wide application, certain Republicans, like Shelley Moore Capito, question its basis. Simultaneously, the US Climate Alliance's 25 state governors are moving towards infrastructure decarbonization.