In a sweeping policy reversal, the White House has instructed federal agencies to stop considering the economic damages of climate change—known as the “social cost of carbon”—in most regulatory decisions. The move marks a significant departure from long-standing practices that integrated climate science and economic analysis into environmental rulemaking.

The directive effectively eliminates the use of the social cost of carbon in cost-benefit analyses, unless explicitly mandated by law. This metric, which assigns a dollar value to the future economic damages caused by each ton of carbon dioxide emitted, has been used for over a decade to shape regulations aimed at curbing pollution. By removing it from the rulemaking process, the administration is stripping away a crucial tool that has helped justify a broad range of environmental protections.

Initially developed during previous administrations, the social cost of carbon has undergone refinement over the years. Its estimated value has varied—from approximately \$42 to as high as \$190 per metric ton—depending on the methodology and the time horizon used. These figures account for a wide array of projected climate impacts, including rising sea levels, more frequent wildfires, prolonged droughts, stronger storms, and disruptions to global food and water supplies. The calculation has served as an essential guide for agencies in assessing whether the benefits of climate-related regulations outweigh their economic costs.

With the new policy, federal agencies are no longer required to include these climate-related economic harms in their regulatory analyses, unless there is a statutory obligation to do so. Critics argue that this change not only sidelines science but also weakens the foundation of evidence-based policymaking. Without accounting for the long-term consequences of greenhouse gas emissions, new rules may favor short-term industrial gains over environmental and public health protections.

The implications of this decision could be profound. Regulations governing vehicle fuel efficiency, power plant emissions, and oil and gas drilling permits, among others, may now be evaluated without regard to their climate impact. This shift is likely to ease restrictions on emissions-heavy industries and could accelerate the approval of fossil fuel projects. Observers warn that such actions may lock in higher emissions for decades, compounding the risks of climate instability.

Environmental and policy analysts have expressed concern that the move undercuts decades of work to integrate economic modeling with climate science. The social cost of carbon was widely regarded as a vital instrument for capturing the hidden costs of carbon pollution—costs that otherwise fall on communities, ecosystems, and future generations. Without it, regulatory frameworks may overlook the broader economic and societal consequences of environmental degradation.

Moreover, legal experts suggest that the change could lead to a wave of lawsuits. By disregarding climate damages in regulatory analyses, agencies risk violating foundational environmental statutes that require comprehensive impact assessments. Legal challenges are expected from advocacy organizations, which argue that ignoring the climate costs of federal actions is not only scientifically unsound but potentially unlawful.

The broader economic ramifications are also under scrutiny. Climate change is already exacting a significant toll on the U.S. economy. Flooded cities, catastrophic wildfires, record-breaking heat waves, and shrinking coastlines are becoming more frequent and more severe. These impacts strain public infrastructure, reduce agricultural productivity, increase insurance costs, and threaten public health. Failing to account for these factors in policymaking could exacerbate existing vulnerabilities and place greater burdens on taxpayers in the long term.

The decision reflects a broader ideological shift that prioritizes deregulation and economic expansion over environmental protection. It also signals a potential rollback of climate policies that have been built on the premise of balancing economic growth with ecological responsibility. Critics view the move as a retreat from science-based governance at a time when the consequences of climate change are becoming increasingly evident.

As climate-related disasters escalate in frequency and cost, the exclusion of the social cost of carbon from policymaking raises fundamental questions about how governments assess risk and value the future. By discounting these long-term harms, the new policy may chart a course that intensifies environmental damage and complicates future efforts to mitigate it.