In Washington, there’s often a tendency to engage in what some might call “magical thinking,” especially when it comes to budgets and lofty goals that lack solid plans. The latest maneuver from the Trump administration seems to veer in that direction, as outlined in a recent memo that effectively discards traditional metrics for evaluating the economic fallout of climate change. This memo suggests that federal agencies should assume that the cost of greenhouse gas emissions is, well, zero.
The concept of social costs related to greenhouse gases isn’t flawless, but it’s one of the better tools available for governments making decisions about energy and environmental policies. These assessments have been developed through years of collaboration among experts. They’re grounded in peer-reviewed research and transparent methodologies.
The administration’s rationale for slashing this value to zero rests on the argument that the issues surrounding climate change are “uncertain.” That’s not a particularly strong stance. Denying the tangible impacts of climate-related pollution is essentially a refusal to confront the truth.
If we accept this rationale about uncertainty completely, it could impede both government functions and economic activity. Should we question funding for national security just because future threats are unpredictable? And can we ignore estimated Medicare costs since long-term healthcare expenses can be hard to pin down? Or, do we stop buying home insurance since accidents don’t happen all the time?
We know that significant policy decisions should be informed by the best estimates we can muster, even when faced with uncertainty. The U.S. Court of Appeals for the DC Circuit noted two decades ago that uncertainty can’t simply be a reason to disregard Congressional mandates. Instead, agencies are expected to use their expertise to make tough choices regarding the most plausible estimates.
Yet, regarding the financial implications of climate change, the administration seems to be trying to persuade us that the “uncertainties” are merely illusions. In reality, while there might be some unknowns, the economic impacts of climate change are distinct, measurable, and, frankly, alarming.
The recent memo from the White House indicates that greenhouse gas emissions linked to environmental rollbacks should not be assessed for their financial impact. It reads like a desperate attempt to obscure the reality of climate change.
It begins by questioning the very existence of climate change, despite the robust scientific consensus affirming its reality. There’s a troubling tactic at play that seeks to sever the understood connections between climate change and economic consequences. In fact, data shows that a significant majority of economists believe climate change is already adversely affecting the global economy.
Then, we see questions raised about how to account for technological advances that could help us adapt. Yet, those assessments have already been addressed in existing social cost estimates.
In a final push, the memo plays with various socioeconomic scenarios and “discount rates,” suggesting that uncertainty looms no matter the path taken. Sure, forecasts come with their fair share of uncertainty. However, the models utilized for evaluating the social costs of greenhouse gases already tackle this uncertainty from multiple angles, with support from numerous peer-reviewed studies.
These tactics have been seen before and have been widely debunked over time.
Back in 2007, during the Bush administration, the Department of Transportation claimed that the benefits of cutting carbon emissions—like improving vehicle fuel efficiency—were uncertain and valueless. The U.S. Ninth Circuit ruled that neglecting to quantify emissions effectively equated to assigning them a value of zero, which certainly isn’t correct. After that decision, federal agencies began to adopt non-zero estimates for the social costs of greenhouse gases, a practice that has been in place for almost 20 years until now.
The current administration seems intent on masking the real costs tied to environmental deregulation, trying to pull the same tricks from the past. The memo masquerades as caring about accuracy, but it reduces everything to zero, ignoring the devastating economic consequences of each ton of climate pollution. The administration seems to think it can cast a spell of “uncertainty” to make it seem like future damages from climate change aren’t significant.
The irony is that leading economists suggest that true social costs may actually be higher than what current cautious estimates reflect. Climate change could trigger catastrophic tipping points, and current metrics might not fully capture societal apprehension regarding such risks. Ignoring climate-related costs doesn’t make them disappear; it only ensures they will burden future generations more heavily.
The Trump administration needs to let go of this magical thinking, confront the reality of climate change, and take its financial impacts seriously.
