The IWG is back — and so is the social cost of GHGs
The White House Interagency Working Group (IWG) is reconsidering the social cost of greenhouse gases (GHG). In a recently released document, the IWG presented interim estimates of the social cost of carbon, methane, and nitrous oxides, noting that the values are the same as those it developed in 2013 and 2016.
The IWG will consider comments on recent developments in the science and economics for its final update to be released in January 2022.
Proposed values based on a 3 percent discount rate* | ||
2020 | 2025 | |
Carbon dioxide | $51/ton | $56 |
Nitrous oxide | $18,000/ton | $21,000 |
Methane | $1,500/ton | $1,700 |
*A discount rate is the present trade-off for future benefits, or what future cash flows are worth today. |
Federal agencies have been estimating the social cost of GHGs in developing regulations since as early as 2002, and an interagency process to harmonize the values began in 2009. In 2017, President Trump issued an executive order that effectively disbanded the IWG and revised the way agencies considered cost-benefit calculations.
In January 2021, President Biden re-established the IWG and directed it to reevaluate the social cost of carbon and other GHGs.
Why does this matter to you? The higher the social cost of carbon, the more likely EPA will find it necessary to regulate greenhouse gas emissions from more facilities.