Buried in a broader order titled Unleashing American Energy, this directive eliminates the social cost of carbon—a calculation used to measure the long-term economic damage caused by carbon pollution. Removing this tool makes it harder to justify good solutions like environmental protections and energy efficiency policies.
The social cost of carbon assigns a dollar value to pollution-related damages, such as disaster recovery, health costs, and agricultural losses. It helps policymakers weigh the benefits of reducing emissions against the costs of regulation. Without it, the full financial burden of climate change falls directly on individuals through higher insurance rates, energy costs, and taxes to rebuild after disasters.
This move follows recommendations from the Heritage Foundation’s Project 2025, which has long worked to weaken climate policy in favor of polluting industries. (Read their report here)
Industries that profit from fossil fuels—such as oil companies, utilities, and manufacturers—stand to gain the most. Without a cost placed on carbon emissions, they can continue polluting without accounting for the damage they cause. This ultimately increases profits for companies like Exxon, Chevron, and Shell while leaving communities to deal with worsening disasters, rising electricity bills, and extreme heat impacts.
Research shows the financial toll is already significant. Climate-related disasters are becoming more frequent and severe, leading to skyrocketing homeowners insurance rates (source) and higher energy bills. Studies predict that due to warming alone, U.S. electricity demand could rise by 9% within 15 years, increasing power costs by as much as 20% later this century.
Work and agriculture are also affected. Rising temperatures reduce worker productivity and farm yields, leading to lower incomes and higher prices. (Read more here) Local governments, struggling to rebuild after climate disasters, may raise taxes to cover infrastructure costs.
Canceling this calculation does not eliminate climate costs—it simply shifts them to the public. Researchers estimate these costs will reach nearly $2 trillion this decade in the U.S. alone. (More details) Climate-related losses are already slowing economic growth, especially in disaster-prone areas.
The social cost of carbon was first introduced in 2009 and has helped shape good solutions, such as fuel economy standards and energy-efficient appliances. These regulations have saved consumers money by reducing waste and lowering emissions. Without this economic tool, future policies to mitigate climate damage may be harder to justify, leading to unchecked pollution and even higher costs for individuals.
The Heritage Foundation and its allies argue that climate regulations impose unnecessary costs on businesses. However, they ignore the long-term economic damage caused by pollution. Some even go as far as to suggest that carbon emissions might be beneficial, claiming that warming could increase crop yields in some regions. But this ignores the broader harm caused by extreme weather, wildfires, and droughts.
Economists widely agree that pollution carries real costs. Ignoring these costs does not make them disappear—it just forces individuals, rather than corporations, to pay the price. Good solutions involve holding polluters accountable, investing in clean energy, and preparing for a changing climate, rather than pretending the problem does not exist.
03/04/2025 – Written by the FalseSolutions.org Team
