This bill prohibits federal agencies from using the social cost of greenhouse gases in regulatory analyses while mandating specific reporting on past usage and restricting environmental considerations to those explicitly required by existing law.
James Lankford
Senator
OK
The Transparency and Honesty in Energy Regulations Act of 2025 strictly defines the official government reports that must be used when calculating the monetary costs of greenhouse gas emissions. Furthermore, the Act prohibits federal agencies from using these social cost estimates in their required cost-benefit analyses for new rules or actions. It also mandates that agencies limit environmental considerations in permitting and rulemaking only to factors explicitly required by existing Acts of Congress. Finally, the bill requires agencies to report to Congress on their past use of these climate cost estimates since 2009.
Proposed Energy Act Bans Agencies from Calculating Climate Costs in New Rules
The “Transparency and Honesty in Energy Regulations Act of 2025” sounds like a good thing on the surface—who doesn't want transparency? But when you dig into the details, this bill is less about clarity and more about making sure the federal government can’t put a price tag on pollution anymore. It essentially removes the economic impact of climate change from the government’s decision-making process for new rules and permits.
The Cost of Carbon: Defined and Then Dismissed
Section 2 of the Act starts by meticulously defining the “Social Cost of Carbon” (SCC), “Social Cost of Methane” (SCM), and other greenhouse gas costs. These are the dollar figures that estimate the financial damage caused by releasing one extra ton of pollution—things like health costs, crop damage, and property loss from flooding. The bill locks these definitions to specific, older technical documents from 2003, 2010, and 2021, effectively freezing the calculation in time. However, the real kicker is Section 3. This section explicitly prohibits the head of any federal agency from using these SCC or SCM figures in any required cost-benefit analysis for new rules, guidance, or agency actions. Think of it this way: when the government decides whether a new regulation is worth the cost, they usually weigh the compliance costs for businesses against the benefits (like cleaner air or fewer hospital visits). This bill says they can no longer include the financial benefit of avoiding climate damage in that equation.
What This Means for Your Wallet and Your Air
For regular people, this change has huge implications. Right now, if the Environmental Protection Agency (EPA) wants to issue a rule requiring better pollution controls on power plants, they can justify the cost by saying, “This rule will cost the industry $100 million, but it will save the public $150 million in climate damages and health costs.” Under this new Act, the EPA loses the $150 million climate justification. They can only argue the health benefits, making it much harder to justify expensive, but necessary, environmental protections. This could accelerate permitting for projects—like pipelines or industrial facilities—that have high climate costs but might look cheaper on paper without the SCC factored in. If you live near a proposed facility, the agency reviewing it can no longer factor in the full economic impact of the greenhouse gases it will emit.
Narrowing the Environmental Review
Section 5 further restricts how agencies consider the environment. It states that when an agency reviews a permit or writes a regulation, they can only consider environmental factors that are specifically required by an existing Act of Congress. If a factor isn't explicitly listed in an existing law—even if it's a known environmental risk—the agency is prohibited from considering it. This drastically narrows the scope of environmental review. Imagine a project that might damage a local wetland in a way that wasn't specifically covered by the original Clean Water Act language. Under this bill, the reviewing agency might have to ignore that damage entirely because it’s not explicitly mandated for consideration.
To top it off, Section 5 forces agencies to revert to using the Office of Management and Budget (OMB) Circular A-4 guidance from 2003 when valuing climate change impacts. Science and economic modeling have advanced significantly since 2003, and using this older, potentially less comprehensive guidance could result in lower estimated damages from climate change. This move ensures that even if agencies find a loophole to consider climate impacts, they must use an outdated yardstick to measure them.