Loris: Undoing useless climate rules will boost economy

President Donald Trump’s executive order to undo several Obama-era global-warming regulations has some critics steaming.

Andrew Steer, president and CEO of the World Resources Institute, accused Trump of “taking a sledgehammer to U.S. climate action.” U.S. Sen. Edward Markey (D-Mass.) called it “a declaration of war on American leadership on climate change and our clean energy future.”

In actuality, the order will benefit all Americans who want affordable and dependable energy and will help energy companies establish some independence from overzealous regulators. A closer look shows why. Among other things, the action:

• Orders the Environmental Protection Agency to review and repeal, or revise, President Obama’s Clean Power Plan.

The Clean Power Plan requires states to shift their electricity mix away from conventional fuels toward renewables. This would raise the costs of energy, and these costs will be borne by all Americans, especially low-income families who spend a larger portion of their budget on energy costs.

But what about the climate benefits promised by the plan? Sadly, they would be practically undetectable, mitigating a mere few hundredths of a degree Celsius warming by the year 2100.

Even proponents of action on climate change have savaged the regulation. Climatologist James Hansen called the Clean Power Plan “practically worthless.”

• Eliminates the use of the “social cost of carbon.”

As president, Obama created an interagency working group tasked with calculating the cost of carbon dioxide emissions to the U.S. economy as a whole.

This figure, called the “social cost of carbon,” is a dollar amount that federal agencies apply to different regulations to calculate the “climate benefit” of abated carbon dioxide emissions. In 2015, the social cost of carbon was said to be $36 per ton.

But the math behind these models is completely bogus. They are essentially a faux authority the Obama administration set up to justify its heavy regulatory agenda.

The working group, led by the EPA, used three statistical models to estimate the value of the social cost of carbon, which is defined as the economic damage that one ton of carbon dioxide emitted today will cause over the next 300 years.

In terms of accurately assessing the social cost of carbon, the EPA may well have pulled a number out of a hat. The models produce widely disparate results when making reasonable changes to key inputs, such as changing the discount rate and climate sensitivity.

To give an example, when changed from a 3 percent discount rate to a 5 percent discount rate, the EPA’s $20 billion in projected climate benefits from the Clean Power Plan regulation decreases to $6.4 billion — less than the EPA’s egregiously low projection of $8.4 billion in compliance costs.

The results are so different that in some instances, the social cost turns negative, indicating there’s actually a social benefit of carbon dioxide emissions.

Further, models start to lose credibility when they start predicting a few decades into the future. These models attempt to predict alleged climate costs centuries into the future.

The bottom line: These models are baseless tools for regulatory analysis, and scrapping the use of “social cost of carbon” can be a strong step along the Trump administration’s path of providing regulatory certainty and sanity.

• Rescinds the moratorium on new coal leases and methane emissions from oil and gas operations on federal lands. Under Obama, the Department of Interior would not issue new coal mining leases on federal lands until the agency conducted a more comprehensive environmental review that included the estimated effects the lease would have on global warming.

Even though the overall climate impacts of these leases would be minimal, the regulation was symbolic of how the Obama administration approached coal: “Defeat by delay” and “keep it in the ground.”

Rescinding this regulation keeps Trump’s campaign promise of giving coal communities a fighting chance. The methane regulations only added to the price of Obama’s costly climate policy without doing anything to mitigate global warming.

Unwinding Obama’s climate regulations is not just about saving money for industries. It’s about addressing the costs that will be incurred and meager benefits achieved by Obama-era regulations.

These regulations, even when combined with carbon dioxide cuts from rest of the developed world, do not buy much climate insurance. They are simply bad policy — both for the environment and for the economy.

Nicolas Loris is the Herbert and Joyce Morgan Research Fellow in energy and environmental policy at the Heritage Foundation in Washington, D.C.