DEQ working group considers social cost of climate change
Laura Lundquist
(Missoula Current) As a working group debates how Montana should evaluate permits on projects that could worsen climate change, the Department of Environmental Quality is advocating for more agency say.
On Monday, the social cost of climate change and how the DEQ will include it in project analyses was the main topic of discussion during the second meeting of the Climate Analysis subgroup of the Montana Environmental Policy Act working group. But by the end of the meeting, few conclusions were reached, as some participants questioned how and when models and assumptions would be used and whether the social cost of climate change should be balanced against economic costs.
In January, DEQ formed a 20-member working group that will spend the first half of 2024 discussing aspects of the agency’s implementation of the Montana Environmental Policy Act, or MEPA. About seven of those members sit on the Climate Analysis subgroup.
Derf Johnson of the Montana Environmental Information Center gave a rundown of the social cost of climate change and how other states, Canada and the federal government use it. The social cost of carbon concept originated during the George Bush administration to look at mileage standards on motor vehicles. Agencies use computer models to characterize the social cost of primary and secondary greenhouse gas emissions that are produced over time by a particular project. Social costs include effects on human health, agriculture, property values and sea-level rise.
One of those models developed by the Environmental Protection Agency is a greenhouse gas equivalent model that looks at the cost as well as the benefits associated with reduced emissions. Johnson said the values of social cost range from $5 a ton when considering effects only in the U.S. to $190 a ton when considering effects worldwide.
Former University of Montana Environmental Studies professor Dan Spencer gave a brief survey of how other states, including Colorado and Washington, use the social cost of climate change in project permitting, including transportation and utilities projects.
“It’s probably the most adopted model for evaluating emissions in the world at this point,” Johnson said. “There’s guidance associated with it. It’s used by numerous agencies. And in terms of predictability, it’s the most predictable for both DEQ and permittees.”
Historically in Montana, when citizen’s working groups have met, agency representatives provide information but don’t take the lead in discussions. However, on Monday, DEQ Director Chris Dorrington was present, and he interjected, saying the EPA model is highly contested. Johnson said all computer models have at least some margin of error, and they require people to make certain assumptions, which is where political differences can arise. But models are just tools and this one is the most used and well-understood, Johnson said. Johnson added that he didn’t know what aspects of the model have been challenged in court.
“If we’re looking at methods and we know they’re contested, is there a way we can build in logical steps such that we don’t accept a method that is either onerous or known to be contested and we just end up in more litigation?” Dorrington said. “It is a very huge waste of time and costly on resources at every level of the agency. I don’t want to step into something that is just a new mess.”
Johnson said in 2022, the federal Council on Environmental Quality developed guidelines for incorporating social cost into agency decisions, which included a rule of reason where agencies have deference. It is intended to allow agencies to do analyses within reasonable boundaries, Johnson said.
Gordon Criswell of Talen Montana, which runs the power plants in Colstrip, said he’s familiar with models and that users just have to pay attention to the assumptions so they know what the model is really indicating. He suggested that the group might also consider the market cost of carbon or follow what Texas is doing and look at the “loss of load value,” which reflects reduced reliability of different forms of energy.
Dorrington then asked whether there would be a threshold below which his department wouldn’t have to calculate social cost and how much discretion his department could have to decide what went into the social cost or whether it was required. He repeated the idea twice more during the meeting, saying DEQ oversees 58 programs, so it would be overwhelming to have to determine the social cost for everything, such as installing a petroleum tank in a rural gas station.
“I go back to scaling - we have to be practical with how we apply our analysis. If you have limited anticipated emissions, I don’t think it’s wise to go straight to social cost of carbon for light - or what I would kinda call 'irrelevant' - projects and then leave a scaled analysis option open. I don’t believe that one-size-fits-all makes sense, and I don’t think it’s practical,” Dorrington said.
Group member Chelsea Liddell suggested having a predetermined value of social cost for simple things that occur repeatedly, such as installing a petroleum tank, that DEQ employees could refer to.
“I see the point of not using resources on these projects that we know will have minimal climate carbon equivalent impacts. But I would say that the calculation of the social cost of carbon is not a big lift,” Liddell said.
As to the question of a threshold below which DEQ wouldn’t do a social cost analysis, the group debated whether DEQ should make that determination or whether the public should be involved. Jon Bennion, Washington Companies government relations director, cautioned that the Legislature might get involved if DEQ had to spend too much time and money on social cost analyses.
The subgroup decided to ponder the questions of whether a threshold should be created, would it be an agency rule or statute, what kinds of assumptions should be used in the social cost model and should other variables be considered. They’ll present the questions to the full MEPA group when it meets in a week. The climate subgroup meets again on April 15.
After Dorrington said DEQ was looking for only five recommendations from the subgroup, Bennion asked Dorrington how specific the recommendations should be. Dorrington said he wanted just general recommendations.
“As much as I respect the wisdom we would gather (from this group), I don’t think it would be wise to be really specific and not go through a further public engagement process regarding use of the agency’s discretion to pick a set of projects, a model and a data set. I think that works better and honors MEPA at its core.”
Contact reporter Laura Lundquist at lundquist@missoulacurrent.com.