Learn more at July 20-22 virtual conference, free to AGC members
The Biden Administration reinstated the Interagency Working Group (IWG) on Social Cost of Carbon (or Greenhouse Gases, SC-GHG) and set a deadline to publish final values by Jan. 2022. Currently, the SC-GHG values are used by federal agencies in decision-making and cost-benefit analyses of new rulemakings. The IWG chose the Obama Administration鈥檚 values as an interim measure. AGC joined a coalition to provide substantive recommendations to the IWG on the steps ahead to ensure a clear and transparent process with full engagement. The coalition urged the IWG to keep the focus of SC-GHG to the intended use, improve modeling/assumptions, address uncertainty, follow OMB guidance for evaluating opportunity costs, fix its analysis of intergenerational issues, and put global externalities into context.
Joint comments from AGC and other industry trade groups urge a narrow use of the SCC limited to the cost-benefit analysis for significant rulemakings (where permissible under an agency鈥檚 statutory authority), stating that 鈥渆stablishing these guardrails can ensure the estimates serve their intended purpose.鈥 The coalition letter notes 鈥淸t]he inherent inability to arrive at accurate and precise calculations of future impact of GHG emissions greatly limits the usefulness of SC-GHG as a tool to drive federal policy, including policy as it relates to the consideration of individual projects.鈥 For example, the SC-GHG 鈥渋s particularly inappropriate for NEPA analyses.
Background
One of the first executive orders signed by President Biden 鈥 , Protecting Public Health and the Environment and Restoring Science To Tackle the Climate Crisis 鈥 began a process to revise SC-GHG that are expressed as a dollar amount per metric ton of a GHG and intended to monetize GHG emission reductions and climate change resulting from each ton of GHG emitted. While SC-GHG estimates were developed by the IWG during the Obama Administration, the group was disbanded under President Trump, so federal agencies have been relying on an 鈥渋nterim鈥 SCC. The Biden Administration has given the interim SCC a value of $51 using a discount rate of 3%; this is the figure the Obama Administration used, adjusted for inflation (compared to the $1 to $7 per ton used by the Trump Administration). Per EO 13990, the IWG will recommend areas of use by Sept 2021 and publish the final SC-GHG estimates no later than January 2022.
Learn More at July 20-22 Virtual Conference
The Biden Administration is taking an 鈥渁ll of government鈥 approach to climate change. Join AGC and contractor members in a discussion on what that approach means for the construction industry---our projects and firms. Hear a briefing on administration actions related to climate so far, and how the cost of greenhouse gases may be factored into future regulations. Discuss how climate policies and trends may impact an owner鈥檚 decision on what to build---and how they want you to build it. Explore what the focus on greenhouse gases may mean for construction operations, equipment, risk, and materials. Find out how to get involved in AGC efforts related to climate. for more details on sessions, speakers, and discussion opportunities. (free to AGC members).
For more information, contact AGC鈥檚 Leah Pilconis at leah.pilconis@agc.org.