One of the most significant court cases about
climate change was
decided this month by a federal appeals court in Chicago. Given that it was steeped in the enervating context of refrigerator regulations, you may have missed it. But amid the stultifying discussions of compressors and insulation foam was a crucial advance in our nation’s belated attempts to forestall global climate catastrophe.
It all comes down to a new phrase: the
Social Cost of Carbon.
Here’s why it’s important. By law, government agencies—in this case, the Department of Energy—are often required to show
that the benefits of a proposed regulation exceed the costs. Sometimes this is straightforward: If it costs industry $100 million to prevent pollution that will do only $10 million in damage, the government (usually) can’t force them to do it.
Sometimes it’s downright
Solomonic. If that pollution regulation can save a single life, is that worth $100 million in industry costs? You might say yes, but usually, the government says no. In fact, we “price lives” all the time—by requiring some safety protections but not others, by building roads the way we do, and in a thousand other ways.
But what about climate change? The costs of a particular regulation—in this case, covering refrigerators—are sometimes easy to assess. But how do you capture the “benefits” of preventing cataclysmic climate change?
Beginning in 2010, a group of economists and scientists set about answering that question. They tried to calculate the likely future costs of shifting climate zones, agricultural disruptions, more extreme events like Superstorm Sandy, more outbreaks of disease, and the many other effects of climate change.
The result is the Social Cost of Carbon (SCC), which,
long story short, was calculated to be $36 per ton. That figure, while admittedly an approximation, is the best estimate that the government has put forward so far.
That’s why the Department of Energy used it in its refrigeration regulations—and that’s why some industry groups sued, alleging that the SCC is no better than a guess.
In
Zero Zone v. Department of Energy, two conservative judges on the Seventh Circuit Court of Appeals disagreed, upholding the use of the SCC and the regulations based on it.
“They did not equivocate,” said Daniel Esty, professor at Yale Law School and the Yale School of Forestry and Environmental Studies, and, from 2011-2014, commissioner of the Connecticut Department of Energy and Environmental Protection.
When he worked at the Environmental Protection Agency under President George H.W. Bush, Esty was part of the team that implemented similar economic analyses in the context of regulating acid rain. Since then, he’s worked on incentive-based ways to address environmental problems—like the “Cap and Trade” approach to climate change. His name is frequently bandied about as a possible director of the EPA in a Hillary Clinton administration.
“Putting a price on pollution in general, and carbon in particular, is the best strategy for motivating change in behaviors that cause harm,” Esty told The Daily Beast. “It’s been hard to figure out the right price… but the judges in this case made clear that this was a serious and thoughtful exercise… It wasn’t an eyeball guess.”
Indeed, while most industry groups have opposed the idea of an SCC, Esty said that having the SCC ratified by a federal appeals court (review by the Supreme Court is possible, but unlikely) will help companies who have already made commitments to sustainability.
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Traveler, on 03 March 2021 - 04:30 PM, said:
