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In a case challenging energy conservation standards recently issued
by the Department of Energy (DOE) for commercial refrigeration equipment, a federal court upheld the rules themselves and the approach the government uses to calculate the social cost of carbon when it issues regulations.
The social cost of carbon is meant to capture the economic damage of a ton of carbon emissions. The cost estimate, which in 2015 was $36 per ton, serves as the justification for countless regulations, including the Clean Power Plan, fuel-economy rules for automobiles and trucks, and energy-efficiency rules for appliances.
DOE estimated the refrigeration efficiency standards would cost manufacturers $93.9 million to $165 million annually, while projecting total benefits in excess of $4 billion.
Zero Zone Inc., a small commercial refrigerator equipment manufacturer, joined an association of manufacturers to challenge the standards in court, objecting the social cost of carbon calculations upon which they were based were “irredeemably flawed” – and therefore “arbitrary and capricious” under the Administrative Procedure Act – in part because DOE did not limit its calculation to the United States. When making cost–benefit calculations to justify new rules, the federal government doesn’t ordinarily account for global damages or benefits, and a purely domestic social cost of carbon would likely be less than $5.00 per ton. The manufacturers argued it was arbitrary and unlawful to consider global costs.
The court disagreed, ignoring U.S. regulatory and judicial precedent, and upheld the rules. Unless the U.S. Supreme Court takes up the case and overturns the ruling, or the next administration withdraws the social cost of carbon standards, this ruling is likely to harm domestic businesses and ordinary Americans by raising the costs of energy and products both absolutely and in relation to international competitors.
And all of this may be unnecessary since, as I pointed out in Climate Change Weekly #217, recent research shows calculations of the social costs of carbon grossly overstate Earth’s sensitivity to carbon dioxide, and the benefits of increasing carbon dioxide may be greater than the purported costs. DOE didn’t include, and the court did not require, a calculation of the benefits of rising carbon dioxide levels.
Regulations and court rulings such as this, that enact or enforce regulations to promote foreign interests while harming Americans are the kind of actions that lead many people to believe powerful, well-heeled, interests are involved in a global conspiracy with puppet U.S. politicians (whose campaigns they finance), to undermine American sovereignty, the market economy, U.S. economic progress and competitiveness.
Give me leaders who put America first!