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Obama administration raises the ‘social cost’ of CO2

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Michael Bastasch DCNF Managing Editor
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In a little-noticed move, the White House raised the “social cost” estimate for carbon dioxide emissions all federal agencies must use when formulating regulations.

The White House Office of Management and Budget raised the social cost of carbon — a monetary estimate of the damages caused by carbon emissions — from $21 per metric ton to $35 per metric ton, which some experts say could allow the White House to move forward with greenhouse gas limits on power plants.

“The big regulatory action that they’re looking at — that would certainly would be the most costly and have the biggest impact on the economy — are the rules for new and existing power plants,” Jeff Holmstead, air quality chief at the Environmental Protection Agency under President George W. Bush, told the Hill.

“It certainly gives them a justification to be more aggressive than they otherwise would be,” Holmstead added.

If the social cost of carbon is raised, it is more likely that the costs of imposing emissions limits on power plants would be lower than the claimed benefits.

“I think the White House is clearly now saying there is a much higher social cost from greenhouse gas emissions than previously acknowledged. That means it really puts the heat on the EPA to move soon and aggressively,” Frank O’Donnell, president of Clean Air Watch, told the Hill.

“The White House will look very weak-kneed and foolish if it doesn’t do something about existing power plants, based on this new analysis,” O’Donnell added.

The administration’s pending emissions limits have been challenged by states and industry who argue that the new regulations would cause more coal plants to shut down and increase energy costs.

The rule would effectively ban the construction of coal plants by limiting emissions to 1,000 pounds-per-megawatt-hour — which can only be met by combined-cycle power plants that are powered by natural gas. Coal plants must use carbon capture and sequestration technology in order to comply, which the industry claims is not commercially viable.

“The new regulations attempt to force standards on coal emissions that would not only be incredibly expensive, but impossible to achieve even with advanced technology,” said West Virginia Democratic Sen. Joe Manchin. “Even worse, there would be no benefit from these new regulations.”

Earlier this year, the administration missed the deadline to finalize the new greenhouse gas rules for new power plants, and the final rule is still pending.

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