Judge Endorses Use of the Social Cost of Carbon in NEPA Analysis

Read the full story in the Climate Law Blog.

In 2010, the U.S. government formed an interagency working group of scientific and economic experts to develop an estimate of the social cost of carbon (SCC). The SCC puts a dollar figure on the damages done or damages avoided for possible scenarios resulting in discrete amounts of carbon dioxide emission. Designed for use in federal rulemakings, the SCC aims to provide a consistent and defensible quantification of the economic impacts of climate change. For example, it is used to assess the climate impact of regulations such as fuel economy standards for cars or appliance efficiency standards. Although the SCC is intended to be comprehensive, some critics have argued that the 2015 estimate of $37 per metric ton of CO2 underestimates the damages by failing to consider all relevant and material data.

In the midst of the controversy surrounding the SCC’s accuracy, the U.S. District Court for the District of Colorado recently endorsed the use of the SCC in environmental analysis under the National Environmental Policy Act (NEPA). In High Country Conservation Advocates v. United States Forest Service, a group of non-profit environmental organizations sued several federal agencies that together issued a permit for on-the-ground coal exploration activities in the pristine Sunset Roadless Area in Colorado’s North Fork Valley. The permit allowed two coal companies to build six miles of roads and to clear vegetation for several drill pads. As required by NEPA, the agencies evaluated the environmental impact of the proposed activity by preparing an environmental impact statement (EIS). In a draft EIS, the agencies had used the SCC protocol to evaluate the greenhouse gas (GHG) impacts from the mining but decided to abandon it in the final EIS after an agency economist called the SCC “controversial.” The final EIS stated that an SCC analysis was impossible and only used the quantification of the benefits associated with the project while completely excluding the GHG-related costs. Plaintiffs challenged the agencies’ issuance of the permit, claiming that the agencies should have retained the SCC in the final EIS.

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