Wednesday, March 29, 2017

Social Costs 2

There is a lot to be concerned about in the recent executive orders regarding environmental regulation. Looking beneath the headlines here is some detail that points to the complexity of some of the issues. One of the executive orders requires the EPA to revisit the Clean Power Plan. This is the plan that would reduce carbon emission by 30% by 2030. The basis for the plan is found in the Clean Air legislation that gives the EPA the power to regulate emissions that are harmful to human health.
The Supreme Court ruled that if the EPA finds that carbon is harmful to human health then it must regulate carbon. The EPA found it it to be harmful and the Clean Power Plan proceeded from there. Furthermore a Federal appellate court ruled "while the record shows that there is a range of values [for the social cost of carbon], the value of carbon emissions reduction is certainly not zero.” This led the EPA to calculate a cost which is also an important factor in rationalizing the Clean Power Plan.

The executive order cannot overturn the Supreme Court ruling that the EPA is required to regulate carbon but it does tell the EPA to ignore the current calculations on the cost of carbon. Certainly there is "guesswork" or "best available science" in such a calculation. What will be the "best avaialble science" for a new calculation?



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