September 19, 2021

Volume XI, Number 262

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September 16, 2021

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OMB Seeks Public Comments on Its Interim Social Cost of Carbon Metrics

The Office of Management and Budget (OMB) announced that it will solicit public comments on the interim social cost of carbon (SCC) metrics released in February by the Interagency Working Group on the Social Cost of Greenhouse Gases (IWG). 

Key Take-Aways and Actions

  • The Social Cost of Greenhouse Gases and specifically the SCC is a key metric used by the U.S. Environmental Protection Agency (EPA) and other agencies to place a monetary value on greenhouse gas (GHG) emissions and reductions during rulemaking and permitting actions. 

  • The Biden Administration previously announced that it would restore the use of the SCC metrics and undertake a process to reevaluate the values and uses of the metrics in agency decision-making processes.

  • Interested parties must submit comments on or before June 21, 2021.

On behalf of the IWG, the OMB announced that it is seeking public comment on the interim SCC and other greenhouse gases (collectively SC-GHG) established by IWG’s “Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide Interim Estimates under Executive Order 13990” (TSD). Comments are due June 21, 2021 and should focus on the interim TSD, as well as on how best to incorporate the latest peer-reviewed science and economics literature in order to develop an updated set of SC-GHG estimates.

The SC-GHG metrics place a dollar value per metric ton for future damage and harms caused by GHG emissions. Federal agencies use these social costs in rulemakings, permitting actions, and in analyzing other policy matters. EPA has already used the interim value in its March 15 regulatory impact analysis to project the climate-related co-benefits of its just-finalized “update” to the Cross-State Air Pollution Rule, and in the recent hydrofluorocarbons rule.

As directed by Executive Order 13990, the IWG released the interim figures in February 2021, with final and updated figures expected in January 2022. For the cost estimate of three greenhouse gases—carbon, methane, and nitrous oxide—the interim social costs tracked closely with the Obama-era figures, when adjusted for inflation. For carbon dioxide, the social cost of releasing a metric ton is valued at $51. Releasing a metric ton of methane currently is valued at $1,500, and releasing a metric ton of nitrous oxide currently is valued at $18,000. In each case, these values reflect a 3 percent discount rate, with the TSD noting that “[w]hile point estimates are important for providing analysts with a tractable approach for regulatory analysis, they do not fully quantify uncertainty associated with the SC-GHG estimates.” These interim figures also take into consideration GHG’s international impacts, eliminated from the analysis by the previous administration.

Notably, OMB’s notice comes shortly after two lawsuits challenging the interim SC-GHG. Louisiana and several other states asked a Missouri federal court to block agencies from using these interim values, saying they violated notice-and-comment regulatory requirements. In a separate Louisiana federal court filing, Texas and nine other states challenged the process to determine the social cost of carbon, claiming President Biden exceeded his authority and circumvented normal rulemaking procedure.

In addition, the request for public comment follows pressure from major industry groups for “ample” public comment opportunities on the SCC. “We believe that the directives associated with updating these values should adhere to rigorous methodology including ample channels and opportunities for public and stakeholder input,” industry groups said in a February 2021 statement to the White House.

Next Steps

Interested parties should submit comments on or before June 21, 2021 and watch for the final costs expected in January 2022.

© 2021 Beveridge & Diamond PC National Law Review, Volume XI, Number 132
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About this Author

Jennifer J. Leech Product Liability Attorney Beveridge & Diamond Washington, DC
Associate

Jenny’s leadership and problem-solving skills help provide clients with solutions for a diverse mix of complex regulatory matters and environmental litigation.

Jenny brings a diversity of experience to Beveridge & Diamond, where her practice centers on regulatory compliance counseling and environmental litigation.  Her experience includes defending product liability suits as well as handling matters arising under a variety of environmental laws including Clean Air, Clean Water, Resource Conservation and Recovery Acts as well as CERCLA (Superfund). 

Prior to joining B&...

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Kirstin K. Gruver Environmental Litigation Attorney Beveridge & Diamond Seattle, WA
Associate

Kirstin Gruver is efficient and responsive to clients' needs.

She maintains a diverse environmental litigation and regulatory practice, working with clients nationwide across industrial sectors with a focus on wetlands and water issues. She also has experience in product stewardship and sustainability matters.

Prior to joining Beveridge & Diamond, Kirstin worked as a deputy prosecuting attorney at the Clark County Prosecutor's office. She also worked as a legal intern with the Department of Transportation, Maritime Administration, and as a summer clerk at Earthjustice....

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Brook Detterman Environmental Litigation Attorney Beveridge & Diamond Boston, MA
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Brook's practice focuses on climate change, renewable energy, and environmental litigation.

Brook helps his clients to navigate domestic and international climate change programs, develop renewable energy projects, and generate carbon offsets.  He helps his clients to negotiate, structure, and implement transactions related to carbon offsets and renewable energy, and works with clients during all phases of renewable energy and carbon offset project development.  Brook also represents clients during complex environmental litigation, having served as litigation and appellate counsel...

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Allyn L. Stern Environmental Attorney Beveridge & Diamond Seattle, WA
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Allyn brings over 30 years of insider understanding of government operations.

Her experience as former Region 10 Counsel at the Environmental Protection Agency (EPA) informs her deep policy, regulatory, and enforcement knowledge. Allyn draws on her breadth and depth of expertise to help clients comply with an array of environmental statutes and regulations applicable to their businesses, including Clean Water Act (CWA) and Resource Conservation and Recovery Act (RCRA) permit approvals, risk management under the Clean Air Act 112(r), civil and criminal enforcement, Superfund cleanup...

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