Obama Quietly Raises 'Carbon Price' as Costs to Climate Increase

Obama Quietly Raises 'Carbon Price' as Costs to Climate Increase. (Bloomberg).

Buried in a little-noticed rule on microwave ovens is a change in the U.S. government’s accounting for carbon emissions that could have wide-ranging implications for everything from power plants to the Keystone XL pipeline.

The increase of the so-called social cost of carbon, to $38 a metric ton in 2015 from $23.80, adjusts the calculation the government uses to weigh costs and benefits of proposed regulations. The figure is meant to approximate losses from global warming such as flood damage and diminished crops. 

With the change, government actions that lead to cuts in emissions -- anything from new mileage standards to clean-energy loans -- will appear more valuable in its cost-benefit analyses. On the flip side, environmentalists urge that it be used to judge projects that could lead to more carbon pollution, such as TransCanada Corp. (TRP)’s Keystone pipeline or coal-mining by companies such as Peabody Energy Corp. (BTU) on public lands, which would be viewed as more costly.

“As we learn that climate damage is worse and worse, there is no direction they could go but up,” Laurie Johnson, chief economist for climate at the Natural Resources Defense Council, said in an interview. Johnson says the administration should go further; she estimates the carbon cost could be as much as $266 a ton.

Even supporters questioned the way the administration slipped the policy out without first opening it for public comment. The change was buried in an afternoon announcement on May 31 about efficiency standards for microwave ovens, a rule not seen as groundbreaking.

“This is a very strange way to make policy about something this important,” Frank Ackerman, an economist at Tufts University who published a book about the economics of global warming, said in an interview. The Obama administration “hasn’t always leveled with us about what is happening behind closed doors.”

Industry representatives are equally puzzled.

“It’s a pretty important move. To do this without any outside participation is bizarre,” said Jeff Holmstead, a lawyer at Bracewell & Giuliani LLP (1222L) representing coal-dependent power producers and other industry groups. A legal challenge to the determination would be difficult, but could be tried by itself or in a challenge to a specific rulemaking that uses the cost, he said.Read the full story here.

Meanwhile :

 Hmmmm.......No significant warming for 17 years 4 months.

By Christopher Monckton of Brenchley.

As Anthony and others have pointed out, even the New York Times has at last been constrained to admit what Dr. Pachauri of the IPCC was constrained to admit some months ago. There has been no global warming statistically distinguishable from zero for getting on for two decades.