This Act prohibits federal agencies from using the social cost of carbon or other greenhouse gases in regulatory cost-benefit analyses and requires agencies to report past usage of these metrics to Congress.
Richard Hudson
Representative
NC-9
The Transparency and Honesty in Energy Regulations Act establishes strict definitions for various social cost metrics related to greenhouse gas emissions. The core provision of the bill prohibits federal agencies from using these specific social cost estimates—including the social cost of carbon, methane, and nitrous oxide—in their required cost-benefit analyses for rulemaking and official actions. Furthermore, the Act mandates that federal agencies must report to Congress on all past uses of these climate-related cost figures in their decision-making processes since 2009.
Energy Bill Bans Agencies From Using Climate Costs in Rulemaking: What That Means for Your Air and Wallet
The aptly named "Transparency and Honesty in Energy Regulations Act" is a short, sharp piece of legislation that aims to fundamentally change how federal agencies, like the EPA, justify their environmental rules. The core of the bill, found in Section 3, bans any federal agency from using the "social cost of greenhouse gases"—including the social cost of carbon, methane, and nitrous oxide—in any required cost-benefit analysis for rules, guidance, or other formal actions.
The Ban on Climate Math
Think of the "social cost of carbon" (SCC) as the official government estimate of the long-term economic damage caused by emitting one extra ton of carbon dioxide into the atmosphere. This cost factors in everything from rising healthcare expenses due to pollution to crop damage from extreme weather. Currently, agencies use this dollar figure to justify rules that reduce emissions. For example, if a new power plant regulation costs the industry $100 million but prevents $500 million in future climate damages (based on the SCC), the rule is deemed economically sound.
Section 3 of this Act pulls the rug out from under that calculation. It specifically prohibits agencies from using these climate cost metrics when doing their required economic reviews under Executive Orders 12866 and 13563. This is a big deal because it effectively removes the primary tool agencies use to quantify the public benefit of climate-related regulations. If you can’t put a dollar value on the harm caused by pollution, it becomes much harder to justify the cost of cleaning it up.
Who Pays the Price?
If this bill becomes law, the immediate impact is that future environmental regulations will be much harder to defend. Agencies will still have to show that their rules are cost-effective, but they won't be able to factor in the long-term economic savings from avoiding climate change. This shifts the focus almost entirely to the short-term costs for businesses, making regulations that address long-term, diffuse problems—like climate change—look prohibitively expensive.
For the average person, this means potentially weaker environmental and public health protections. Imagine a rule designed to limit factory emissions. Without the social cost of carbon, the agency only sees the cost to the factory owner. What they can no longer fully account for is the benefit to the public: fewer asthma attacks in nearby neighborhoods, less damage to infrastructure from severe weather, and more stable food prices down the road. The result is that the costs of pollution—the higher insurance rates, the medical bills, the ruined crops—will be borne by the general public and future generations, rather than being factored into the regulatory decision-making today.
Defining the Past, Ignoring the Future
Section 2 of the bill also locks the definitions of these social costs into a specific, historic set of government documents dating back to 2010 and 2021. This is a subtle but important move. Science and economic modeling are constantly evolving, and the official SCC is periodically updated to reflect the latest data. By tying the definitions to specific, historical reports, the bill makes it difficult for agencies to use newer, potentially more accurate scientific estimates, even if they wanted to. It essentially freezes the economic analysis to a specific point in time, regardless of what new data or scientific consensus emerges.
Finally, Section 4 requires every federal agency to send a report to Congress within 120 days, detailing every instance since 2009 where they used these social cost metrics in their rulemaking. While this is framed as a transparency measure, it also serves as a legislative fishing expedition, creating a detailed record of past environmental actions that could be targeted for future legislative or executive rollback. In short, this bill is less about transparency and more about removing the economic justification for rules that protect the environment and public health.