As part of his comprehensive climate change agenda, President Biden convened a task force to assess the social cost of greenhouse gases. At the end of February, the task force published an interim report estimating the “cost” of carbon at approximately $52 per ton, a figure aligned with the Obama Administration’s estimates, but significantly increased from the negligible cost of carbon tagged by the Trump Administration. As discussed in this client alert, this report is significant because it suggests that the Biden Administration will use that social cost of carbon figure in the cost-benefit analysis supporting what is expected to be a robust regulatory regime.

Federal agencies often have significant latitude in issuing regulations under the statutes they administer. To guide the exercise of their discretion, for four decades, the White House has required agencies to analyze proposed regulations to ensure their projected benefits exceed their estimated costs. But doing so requires making assumptions, not only about monetary costs and benefits but also about the many nonmonetary benefits such as improved public health that, while sometimes difficult to quantify, are meant to accrue from federal regulation.