The benefits of Obama-era rules to curb greenhouse gas emissions would greatly exceed the costs in the coming years, according to a new analysis.
Regulations designed to control emissions from power plants, oil production and motor vehicles could together lead to close to $300 billion in net benefits per year by 2030, according to the report by Columbia University’s Sabin Center for Climate Change Law.
The paper comes as President Trump has sought to roll back any regulations his team says could hinder domestic energy development and is part of a broader shift in focus away from action on climate change throughout the administration.
While the Trump administration has taken other actions to depart from the Obama administration’s climate change priorities—like pulling out of the Paris Agreement—the analysis cites the elimination of these rules as having the greatest impact on the nation’s ability to address climate change.
“We wanted to challenge the argument made by the opponents of the rules that these rules impose undue costs on industry and society as a whole. We also wanted to look at these rules as a complete package,” said Jessica Wentz, a staff attorney at the Sabin Center and co-author of the paper, in an email.
In “The Price of Climate Deregulation,” Wentz and Nadra Rahman, a Sabin Center intern, analyzed the projected economic impacts of major regulations aimed at controlling carbon dioxide and methane: U.S. EPA’s Clean Power Plan, the Bureau of Land Management’s Methane and Waste Prevention Rule, EPA’s 2016 New Source Performance Standards for the oil and gas sector, and EPA’s emissions standards for both light-duty and heavy-duty vehicles.
The authors aimed to make federal data on the regulations’ impacts more accessible to the general public, Wentz said.
“I wouldn’t say the results were unexpected, but I do think this project helped us (and the public) to better understand the magnitude of the social impact of rescinding or modifying these rules,” she wrote.
Rahman and Wentz primarily aggregated EPA and Interior’s own cost-benefit projections of the Obama-era regulations. They also compared the values to separate cost-benefit analyses developed by independent researchers, a number of whom challenged the agencies’ analyses of the regulations, alternately stating that EPA and BLM had overestimated benefits or underestimated costs.
The $370 billion in gross benefits includes the positive impacts of reducing 980 million metric tons of carbon dioxide equivalent by 2030, along with the health benefits of also reducing other pollutants, such as nitrogen oxides.
These benefits would be four times greater than the projected $84 billion in total costs of implementing major regulations crafted under the Obama administration, said researchers in a paper published on the center’s website yesterday.
On a year-to-year basis, the economic benefits can either significantly exceed, or at the very least match, the cost of implementation. Some of the highest potential benefits come from implementing the Clean Power Plan and from standards for medium- to heavy-duty vehicles. The total does not include other benefits like job creation and long-term climate change mitigation benefits.
Clean Power Plan
Based on EPA’s estimates, the net economic benefits of the rule could be around $7 billion in 2020, and then rise to $46 billion in 2030.
These figures included: compliance costs, an estimated reduction of 74 million metric tons of CO2 emissions in 2020 and a reduction of 375 million metric tons in 2030. The dollar values also counted health benefits resulting from the reduction of other pollutants like sulfur dioxide and nitrogen oxides.
The economic benefits don’t include other potential positives of the rule like avoided premature deaths, lower exposure to hazardous air pollutants and impacts on ecosystems.
The researchers note that the economic benefits are calculated using a social cost of carbon, a complex metric that puts a dollar value on the emission of 1 ton of carbon. The value takes into account how rising global temperatures will affect the planet and society (Climatewire, Feb. 13).
In the president’s “energy independence” executive order, Trump signaled that the administration would seek to alter this method of calculating the costs of climate change, though agencies could use a related metric that would only take into account domestic impacts of climate change (Climatewire, April 6).
Motor vehicle emissions
Light-duty vehicles: The fuel efficiency improvements alone for light-duty vehicles are enough to offset the costs of implementing rules on emissions from these vehicles, according to the EPA figures the researchers cited.
The net economic benefits of fuel efficiency standards for model years 2012 to 2016 are expected to be $34.7 billion in 2020 and $100.4 billion in 2030. Meanwhile, standards for model years 2017 through 2025 could lead to net benefits of $168 billion in 2020 and $81.4 billion in 2030.
Medium and heavy-duty vehicles: According to EPA data, phase one of emissions standards for these vehicles, for model years 2014 to 2018, could lead to net benefits of $10 billion in 2020 and $27.3 billion in 2030. Phase two, for model years 2019 to 2028, could have net benefits of $31.5 billion in 2020 and $74.4 billion in 2030.
New Source Performance Standards for the oil and gas sector
As with the Clean Power Plan, EPA used the social cost of carbon metric to calculate the net monetary benefits of controlling methane, volatile organic compounds and toxic air pollutants emitted from new and modified sources. The net benefits of the rule could be $37 million by 2020 and go up to $180 million in 2025.
These numbers consider compliance costs and methane emissions reductions of 300,000 short tons in 2020 and 510,000 short tons in 2025.
Not all benefits were included. EPA did not put a dollar value on the health benefits of potential reductions in ozone, which is formed from volatile organic compounds. Estimates also did not include potential natural gas savings from captured methane.
Methane and Waste Prevention Rule
This BLM rule aims to reduce venting, flaring and leaking of methane on public and Native American lands.
Preventing the potent greenhouse gas from escaping could lead to net economic benefits of $126 million in 2020 and $197 million in 2025. This is based on methane reductions of about 177,000 short tons in 2020 and 179,000 short tons in 2025. It also considers factors like the resale value of recovered natural gas and costs of compliance.
Reprinted from Climatewire with permission from E&E News. E&E provides daily coverage of essential energy and environmental news at www.eenews.net.