Washington often indulges in magical thinking, as politicians conjure new budgetary gimmicks or announce ambitious goals without concrete plans to achieve them. The Trump administration’s latest hocus-pocus comes via a memo that effectively abandons the long-standing metric that quantifies the economic damages of climate change, known as the social cost of greenhouse gases (estimated in 2023 at about $210 per ton of carbon dioxide). With this memo, the administration is telling federal agencies to assume that the costs from climate change will be $0 when weighing policy decisions.
The social cost of greenhouse gases is not a perfect crystal ball. But it’s the best tool we have to ensure that when the government makes decisions about energy, infrastructure and environmental protection, the long-term economic consequences of climate change are part of the conversation. It was developed through decades of work by experts across multiple administrations in a rigorously peer-reviewed and transparent process.
The White House’s grand rationale for setting this value to zero is that the issue is just too “uncertain.” That isn’t a good-faith argument; it’s a flat refusal to confront the real-world costs of climate pollution.
If we applied this “too uncertain” sleight of hand across the board, both the government and the economy would grind to a halt. Should we defund national security operations because the nature of future threats is “uncertain”? Should we stop estimating Medicare costs because long-run healthcare expenditures are “uncertain”? Should people and businesses stop buying property insurance because accidents only occur sporadically?
Serious policy decisions require using the best available estimates in the face of uncertainty, understanding that imperfect information is much better than none. As the U.S. Court of Appeals for the D.C. Circuit recognized two decades ago, government “by nature work[s] under conditions of serious uncertainty, and regulation would be at an end if uncertainty alone were an excuse to ignore a congressional command.” Instead, an “agency’s job is to exercise its expertise to make tough choices about which of the competing estimates is most plausible.”
Yet when it comes to the economic costs of climate change, this administration wants to fool us into believing that “uncertain” effects are illusory and, therefore, ignorable. To the contrary, despite a degree of uncertainty, the costs of climate change are real, quantifiable and staggering.
This recent memo, signed by the White House office responsible for reviewing regulatory analyses, tells agencies they “should not monetize the impacts” from greenhouse gas emissions resulting from their rollbacks of environmental protections. The memo deploys every trick in the book to try to obscure reality.
It starts by attempting a vanishing act, doubting “whether … any supposed changes in the climate are actually occurring,” despite the well-settled scientific consensus that human-made climate change is “unequivocally” real. Next, a rope-cutting trick clumsily tries to sever the established links of “climate-economic interactions.” In fact, 89 percent of economists believe climate change is already negatively impacting the global economy, or soon will.
Then comes some classic misdirection, questioning “how to account for technological advancements that may … facilitate human adaptation” to climate change — even though adaptation and technological development are already accounted for in existing estimates of the social cost of greenhouse gases.
For its final act, the memo attempts some pick-a-card trickery, fanning out a range of socioeconomic scenarios and “discount rates” and implying that, no matter which selections are made, some uncertainty will exist. Fair enough: any projection involves a degree of uncertainty. But the models used to value the social cost of greenhouse gases explicitly analyze and account for such uncertainty in multiple ways. The approach was based on hundreds of peer-reviewed articles and recommendations from the National Academies of Sciences.
We’ve seen these tricks before, and they fell just as flat back then.
In 2007, under President George W. Bush, the Department of Transportation claimed that the benefits of cutting carbon emissions (by, for example, increasing cars’ fuel-efficiency) were too uncertain to value. The U.S. Court of Appeals for the Ninth Circuit ruled that failing to value the emissions was the same as assigning a value of “zero,” and that while a “range of values” could be plausible, the benefits were “certainly not zero.” Following that ruling, federal agencies began estimating the social cost of greenhouse gases, and have used non-zero values for nearly two decades — until now.
The Trump administration is trying to pull that same old rabbit out of a hat to conceal the real costs of environmental deregulation and make “barriers” to drilling, mining and pollution disappear. We shouldn’t buy into this stale illusion.
The memo feigns concern about imprecise numbers but attributes the least believable number of all — zero — to the substantial damages caused by each ton of climate pollution. The administration wants to wave a wand, recite the spell of “uncertainty” and make us believe that all future damages from ravaged coastlines, extreme weather and devastated ecosystems are, economically speaking, costless.
The irony is that leading economists argue that uncertainty makes the true social cost of greenhouse gases higher than our current cautious estimates, not lower. Climate change could trigger catastrophic, irreversible tipping points, but current estimates of the metric do not fully capture society’s rational aversion to such risks. Uncertainty strongly suggests we should be erring on the side of more aggressive action, not discarding the primary metric that tries to quantify the risk.
Ignoring the costs of climate change won’t make them magically disappear; it only guarantees they’ll be even higher for the next generation. The Trump administration needs to ditch the magical thinking, face reality and get serious about the costs of climate change.
Jason A. Schwartz is the legal director and Peter H. Howard the economics director at the Institute for Policy Integrity at NYU School of Law. They have frequently published academic work on the economics of climate change.
