Court Ruling May Reverberate on ‘Social Cost’ of Carbon

Greenhouse gas emissions from burning and extracting coal, oil and natural gas drive climate change, and as communities feel the effects of a warming world — rising seas, burning forests and withering crops — communities’ pocketbooks take a hit, too.

That’s called the social cost of carbon.  And if a recent federal court decision stands, the U.S. government may have to calculate those climate-related costs from any new fossil fuels development on public lands before a new project can be approved.

In temporarily blocking a coal mine expansion, a federal judge in Denver ruled in June that the government wrongly dismissed as “impossible” its ability to quantify the climate costs of expanding a western Colorado coal mine.  The court ruled that the government should be able to calculate the project’s impact on climate change and how that would affect the total human and environmental costs associated with expanding the mine.

In their review of the project, government economists said the 1.23 million tons of carbon dioxide that the existing mine currently emits each year could already cost society up to $984 million annually because of how those emissions affect climate change.  Some examples of social costs could include the pricetag of a coastal city adapting to sea level rise, property damage due to increased flood risk, or costs associated with changes in agricultural productivity because of increased temperatures.

Experts say the ruling is one of the America’s most significant court decisions regarding greenhouse gas emissions, and it could have broad implications for future fossil fuels development on land owned by the federal government.

If federal land management agencies have to consider how the carbon emissions of a fossil fuels project will affect climate change and how much money that will eventually cost cities and homeowners, it could convince the government to deny any new proposal to develop coal, oil, and natural gas on public lands, said Mark Squillace, a law professor and former director of the Natural Resources Law Center at the University of Colorado Law School.

“This is just the beginning of the debate,” he said.  “As we get better data (and) social costs continue to go up, that will put further pressure on limiting the development of fossil fuels.”

The ruling will give those opposed to fossil fuels extraction on public lands more tools to fight it on the grounds that its costs associated with climate change may be too great, said Michael Gerrard, director of the Center of Climate Change Law at Columbia University in New York.

Court Ruling May Reverberate on ‘Social Cost’ of Carbon