By Andres Restrepo, Sierra Club
Today, Donald Trump and his EPA Administrator Scott Pruitt announced their intention to repeal the Clean Power Plan, the Obama Administration’s landmark program to cut dangerous climate-disrupting carbon pollution from the nation’s power plants. We’ve also learned that Trump and Pruitt plan to support this egregious decision by using accounting tricks, invented numbers, and various baseless assumptions. In other words, the administration’s justification for its proposed repeal requires some good, old-fashioned cooking of the books.
When it first issued the rule, EPA calculated the benefits that the program would achieve by reducing both carbon dioxide emissions, which drive climate change, and conventional pollutants, which form soot and smog and can lead to missed school and work days, asthma attacks, bronchitis, heart attacks, and death. EPA estimated that the these monetized benefits would outweigh the program’s compliance costs by between $25 and 40 billion per year in 2030 and would avoid 90,000 childhood asthma attacks and up to 3,600 premature deaths that same year. And this figure doesn’t even account for the Plan’s many non-quantified benefits, including reductions of toxic mercury, ecosystem benefits, and improved visibility.
It’s long been clear, then, that by repealing the Clean Power Plan, the Trump Administration would be pulling away substantial benefits to communities all around the country without providing nearly as much savings in return. Now that he’s formally proposed to abandon the program, Scott Pruitt has attempted to escape this inconvenient reality by twisting the numbers to suit his preferred outcome in three ways.
First, there’s the Clean Power Plan’s climate benefits. Until very recently, federal agencies used an accounting tool called the social cost of carbon to convert into monetary value the harm done to the global climate from each additional ton of carbon dioxide emissions. As a corollary, this metric also predicts the monetary benefits that come from reducing each additional ton of carbon. While the government’s social cost of carbon tool significantly downplays the true risks of carbon pollution for various technical, scientific, and economic reasons, it nevertheless remains the best and most scientifically rigorous tool available for monetizing the climate impacts from carbon pollution.
Unfortunately, EPA has now abandoned the social cost of carbon in favor of a watered-down metric that dramatically understates the Clean Power Plan’s benefits. Unlike the prior metric, the new version calculates domestic impacts only rather than global benefits. This makes neither scientific nor economic sense. Climate change is an inherently global phenomenon, and meaningful action can only occur if the nations of the world coordinate their actions. Each country must therefore account for the impacts of its carbon emissions not only on its own residents, but on those of every other country as well. If instead, other countries follow Trump’s “America First” lead and consider domestic impacts alone, most of the harms from climate pollution will remain uncounted and no country would take action to reduce its emissions.
Furthermore, EPA now assumes that the value to society of future carbon reductions must be discounted by between 3% and 7% per year, a markedly higher range than the one used in the previous social cost of carbon. This accounting choice renders future carbon dioxide reductions nearly valueless, even though all evidence suggests the exact opposite: sharp reductions in greenhouse gas pollution will become much more necessary as the world approaches critical climate tipping points. Even from a basic economic standpoint, EPA’s new discount is unjustified for many reasons, including the fact that climate regulations primarily impact consumer behavior rather than investment behavior, the public’s tendency towards risk aversion, and the many climate impacts that cannot be formally quantified. Pruitt has simply ignored these considerations in order to trash the Clean Power Plan’s climate benefits and justify his repeal decision.
Next, there’s the Clean Power Plan’s public health benefits. By reducing electricity generation from fossil fuel-burning power plants, the Plan would reduce not only carbon dioxide but also traditional pollutants, including emissions that form fine particulate matter, or soot. These particles can lodge deep in people’s lungs and cause serious cardiovascular and respiratory conditions, and even result in premature death. After decades of research, scientists have been unable to pinpoint any level of fine particulate matter concentration in the atmosphere that is entirely safe, so the agency has long assumed that reduced concentrations of this pollutant will provide public health benefits at any concentration.
That is, until now. Pruitt’s EPA has concocted two additional new scenarios in which the benefits of reducing fine particulate matter emissions fall to zero at specific threshold concentrations. One of these concentrations is EPA’s national ambient air quality standard for fine particulate matter, which is the legally required baseline level for the entire country. The other represents the lowest measured levels of fine particulate matter in two epidemiological research studies that the agency used to assess the health impacts of this pollutant. The problem is, little scientific evidence suggests that no health benefits result from further emission reductions when fine particulate matter concentrations fall below either of these two cut-off points. The agency simply made those assumptions up. Because EPA has suddenly changed course from its prior position, which did not analyze imaginary threshold concentrations of fine particulate matter, the burden is on the agency to justify its new policy, but it hasn’t provided one shred of supporting evidence to support its position. But Pruitt needed to justify repealing the Clean Power Plan, so he’s launched an assault on the rule’s public health benefits in order to make the program seem less necessary than it actually is.
Finally, there’s the Clean Power Plan’s energy efficiency savings. EPA previously estimated that the Plan would encourage significant new investments in energy efficiency programs, which save customers money on their monthly electric bills while also reducing power companies’ compliance costs through fuel savings and other such factors. While Pruitt’s EPA still assumes that these energy efficiency savings will occur, it has calculated the utilities’ compliance costs under the assumption that those savings won’t occur. That is, to evaluate the Clean Power Plan’s costs, EPA assume that electricity avoided through efficiency programs will actually be generated, and that utilities won’t save money on fuel costs after all. Instead, Pruitt and company shift those efficiency savings to the other side of the ledger and count them as benefits. While this subtle accounting trick doesn’t ultimately affect the rule’s overall cost-benefit calculus, it allows Pruitt to represent to the public that the Clean Power Plan is far costlier than it actually is. For example, whereas the Obama Administration reported that the program’s costs would be between $5 and $8 billion in 2030, Pruitt’s EPA now reports costs ranging from $24 and $33 billion in that same year, an increase solely due to a change in bookkeeping.
If this all seems cynical, it’s because it is. Scott Pruitt may deny on national television that human activity causes climate change, but he knows full well that the public would never tolerate a Clean Power Plan repeal that sacrifices major climate and health benefits in favor of only modest cost savings to big industry. And so he’s cooked the numbers in hopes that people wouldn’t notice. That’s the only way he can justify a move that is ultimately designed to help out fossil fuel interests and advance his own political career. But agency decisions must be rational and legal to survive, and Pruitt’s action is neither of those things. That’s why we’re fighting his decision tooth and nail, and why we’re confident we’ll ultimately win.