There is something very significant going on in the federal regulatory world to which a lot of people need to pay attention, and not just inside the Beltway regulatory nerds like me. The Obama Administration developed the concept of the social cost of carbon to take into account climate effects, benefits and costs of potential regulations. The Trump Administration watered it down, some would say eviscerated it, and now the Biden administration has revived it with a vengeance. For those who only can applaud this push – – which is subject to litigation by a number of Republican attorneys general – – I just warn that pushing even a good concept too far will undoubtedly result in not only highly controversial, legally untenable regulations but also another reversal in the next administration. None of that is helpful for long-term, sound regulatory policy, and everybody left or right, the business community and environmental community, should favor incrementalism versus radical, unstable change in regulatory approaches.
The Biden administration isn’t awaiting a final price tag on a final greenhouse gas assessment metric before it starts working on new regulations—even though the final number could support even tougher regulation. The implications are far-reaching for the administration’s efforts to address climate change, affecting everything from vehicle emission standards to permits for oil, coal, and gas projects.