Congress Demand EPA Explain Their Scheme to Calculate ‘Social Cost’ of ‘Greenhouse Gases’ Despite Court Order

U.S. Senator Shelley Moore Capito (R-W.Va.), Ranking Member of the Senate Environment and Public Works (EPW) Committee, and House Energy and Commerce Committee Republican Leader Rep. Cathy McMorris Rodgers (R-Wash.) sent a letter to U.S. Environmental Protection Agency (EPA) Administrator Michael Regan requesting transparency and information on EPA’s use of Social Cost of Greenhouse Gases (SC-GHG).

A U.S. District Court recently issued a preliminary injunction that blocked federal agencies from using so-called SC-GHG estimates in regulatory reviews and other activity. The ruling raised important issues that are pertinent for congressional oversight, including questions about transparency and the application of these controversial estimates to justify stricter regulations on American energy and its economy.

“Aside from fundamental technical limits to the reliability of future global climate impacts and economic growth estimates identified by experts, the controversy involved serious questions about applying highly uncertain and speculative estimates to inform near-term domestic regulatory judgements. Contrary to Office of Management and Budget (OMB) and EPA peer review guidance, the estimates were also not subject to peer review. The potential for abusing this information to skew important regulatory decisions or to mislead the public about the real costs of regulatory actions remains our central concern,” the members wrote.

The Wall Street Journal Editorial Board noted over the weekend the following on the social cost of greenhouse gases — “[t]he [Biden] Administration’s estimate captured all of the potential harm from carbon emissions globally over three centuries – yes, centuries. They threw in everything from property damage to health harms and war.”

This letter follows a previous letter Ranking Member Capito sent in February to President Biden asking the administration to postpone any current efforts to set interim cost values on the social cost of greenhouse gases. The cost assumptions set by this working group process will have significant implications for regulatory policies and the national economy.

The full letter can be found here and below:

Dear Administrator Regan:

On February 11, a federal judge on the U.S. District Court for the Western District of Louisiana issued a preliminary injunction blocking federal agencies from using so-called Social Cost of Greenhouse Gases (SC-GHG) estimates in any regulatory reviews or proceedings pending final resolution of Louisiana, et al v. Biden. The judge’s forty-four-page ruling raises several issues that are pertinent to Congressional oversight. These include the Administration’s process for developing the estimates and potential application of the estimates in agency proceedings, procurement, communications, and other activities. 

Although this Administration’s efforts concerning SC-GHG appear to be run out of the White House, your agency has been involved in critical aspects of the development of these estimates. For example, the Environmental Protection Agency (EPA) issued a Federal Register Notice this past January 19 soliciting nominations for “scientific experts” to perform a peer review of forthcoming, new SC-GHG estimates.

Questions about the process and transparency of developing SC-GHG estimates first emerged during the Obama Administration. President Obama created an obscure and opaque ad hoc “Interagency Working Group” (IWG) to establish such estimates for use in regulatory impact analyses. The SC-GHG estimates, which presented a dollar value for estimated global damage of each ton of greenhouse gas emissions, measured over the extraordinary time-period of 300 years into the future, remained controversial throughout the Obama Administration. Aside from fundamental technical limits to the reliability of future global climate impacts and economic growth estimates identified by experts, the controversy involved serious questions about applying highly uncertain and speculative estimates to inform near-term domestic regulatory judgements. Contrary to Office of Management and Budget (OMB) and EPA peer review guidance, the estimates were also not subject to peer review. The potential for abusing this information to skew important regulatory decisions or to mislead the public about the real costs of regulatory actions remains our central concern.

The Trump Administration limited the use of the SC-GHG to domestic impacts and to economic evaluation consistent with long established regulatory guidance.  However, the Biden Administration resurrected the controversy on President Biden’s first day in office, when he issued Executive Order 13990 that, among actions such as the canceling the Keystone pipeline permit, resurrected the SC-GHG IWG to change the estimates. That order also provided for the reestablishment, without any public notice and comment, of a requirement that agencies use the Obama Administration estimates in environmental and regulatory assessments.

We write today for information to develop a better understanding of the nature and scope of EPA’s work to develop SC-GHG estimates, its use of SC-GHG, and its related actions to comply with the recent District Court ruling. Accordingly, we respectfully request that you respond to the following by March 22, 2022:

• Describe how EPA has complied with E.O. 13990, including the agency’s use of the so-called Interim SC-GHG estimates in any assessments, reviews, regulatory activity, briefing materials, and litigation.
• Describe EPA’s participation in and support for the IWG, including but not limited to EPA’s technical support and economic assessments, and EPA’s role in the peer review process. Please list all staff that participated in or supported the IWG, including relevant title and office.
• Describe how EPA is complying with the District Court’s Ruling Memorandum and Order concerning the use of the interim SC-GHG Estimates in any agency regulation, procurement, or other decision, review, analysis, or action. If you have not taken any action, explain why not. Please provide a copy of any communications from EPA’s Office of General Counsel to EPA staff regarding your agency’s efforts to comply with the District Court ruling.

Please provide the following:

• A list of all draft or proposed agency actions where the Interim SC-GHGs Estimates have been cited in agency documents, including but not limited to all Clean Air Act Section 309 reviews of other agency actions.
• A list of all EPA judicial statements or court filings where the Interim SC-GHG estimates have been cited.
• A list of all EPA final agency actions where the Interim SC-GHGs Estimates have been employed.
• The steps EPA is taking to withdraw, amend or suspend these listed actions either to comply with the District Court’s Order or to address the issues raised in the District Court’s Ruling Memorandum in general.

We appreciate your prompt attention to this request.  Please have your staff work with our Minority Committee staff to address any questions about complying with this request.

Sincerely,

The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.

Donny Ferguson

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Donny Ferguson is a professional fundraiser and organizational manager. Born and raised in Texas, he has lived in Washington, D.C. for 16 years. Ferguson also served as Senior Communications and Policy Adviser in the United States House of Representatives, operating one of Capitol Hill's most effective media operations.

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