Bill Prohibits Federal Agencies from Using Climate Damage Costs in Rulemaking Analysis

A new piece of legislation, carrying the title 'Transparency and Honesty in Energy Regulations Act,' proposes a significant change to how federal agencies make decisions on new rules. At its core, the bill would stop agencies from using what's known as the 'social cost' of greenhouse gases – like carbon dioxide, methane, and nitrous oxide – when they weigh the pros and cons of proposed regulations or actions. This means specific estimates of long-term financial damage from pollution would be off the table for these analyses.

Climate Costs: Erased from the Equation?

So, what exactly is this 'social cost of greenhouse gases' that Section 3 of the bill wants to ban from consideration? The bill itself defines these terms by referencing various government documents and, crucially, includes 'any other estimate of the monetary damages' caused by an additional ton of these emissions. Think of it as an attempt to calculate the long-term price tag society pays for pollution – things like increased healthcare costs, damage from severe weather, or impacts on farming. Currently, under long-standing Executive Orders (like E.O. 12866 and E.O. 13563), federal agencies are often required to conduct a cost-benefit analysis for major new rules. This bill says that when they do this math, these specific climate damage estimates can no longer be part of the calculation.

Unpacking the Impact: From Boardrooms to Your Backyard

What does this mean in the real world if agencies can't use these metrics? Let's say a new energy project is proposed, or new pollution standards for factories are on the table. As per Section 3, the agency evaluating these would be barred from including the estimated dollar value of future climate damages linked to the project's emissions in their official cost-benefit rundown. For some industries, particularly those with significant greenhouse gas footprints, this could mean that regulations designed to cut emissions might appear less justified or carry a lower official 'cost,' potentially leading to less stringent rules and lower immediate compliance expenses for those businesses.

However, if these long-term societal costs – like communities facing higher risks from flooding or wildfires, families dealing with more pollution-related asthma, or even shifts in food prices due to agricultural disruption – aren't formally considered when making policy, they don't just disappear. Those costs could effectively be shifted onto the public and future generations. It's a bit like buying a car based only on the sticker price without considering its fuel efficiency or long-term repair costs; the initial figure might look appealing, but the total cost of ownership could be much higher. This is where the bill could have wide-ranging effects, potentially leading to decisions that don't fully account for the long-term economic and health burdens of climate change.

The Rearview Mirror: A Look Back at Banned Metrics

Interestingly, while the bill looks to halt the future use of these 'social cost' calculations, Section 4 also mandates a look backward. It requires every federal agency to compile a report for Congress within 120 days of the Act's passage. This report must detail every proposed and final rule, guidance document, or agency action since January 2009 where the social cost of carbon, methane, nitrous oxide, or other greenhouse gases was used. So, agencies will be busy cataloging their past reliance on these very metrics that the bill simultaneously seeks to prohibit for all future decisions.