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115th Congress }                                      { REPT. 115-999
                        HOUSE OF REPRESENTATIVES
  2d Session   }                                      { Part 1

======================================================================
 
       TRANSPARENCY AND HONESTY IN ENERGY REGULATIONS ACT OF 2017

                                _______
                                

                November 2, 2018.--Ordered to be printed

                                _______
                                

Mr. Bishop of Utah, from the Committee on Natural Resources, submitted 
                             the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 3117]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 3117) to prohibit the Secretary of Energy, the 
Administrator of the Environmental Protection Agency, the 
Secretary of the Interior, and the Chair of the Council on 
Environmental Quality from considering the social cost of 
carbon, the social cost of methane, or the social cost of 
nitrous oxide, in taking any action, and for other purposes, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Transparency and Honesty in Energy 
Regulations Act of 2017''.

SEC. 2. FINDINGS.

  Congress finds that--
          (1) as a tool to justify Federal actions by the Secretary of 
        Energy, the Administrator of the Environmental Protection 
        Agency, the Secretary of the Interior, and the Chair of the 
        Council on Environmental Quality to address greenhouse gas 
        emissions, including the regulation or prohibition of the 
        exploration, mining, production, and use of coal and other 
        fossil fuels as energy sources, the social cost of carbon, the 
        social cost of methane, and the social cost of nitrous oxide 
        represent the hypothetical cost of 1 incremental ton of carbon 
        dioxide, methane, or nitrous oxide emissions in a given year;
          (2) the document of the Office of Management and Budget 
        entitled ``Circular A-4'' and dated September 17, 2003--
                  (A) guides Federal agencies on the development of 
                regulatory impact analysis required under Executive 
                Order 12866 (5 U.S.C. 601 note; relating to regulatory 
                planning and review) and other authorities; and
                  (B) instructs Federal agencies to include discount 
                rates of 3 and 7 percent and evaluate the costs and 
                benefits of the regulatory action that accrue to 
                citizens and residents of the United States;
          (3) first developed in 2009 by an interagency working group 
        that included the Department of Energy, the Environmental 
        Protection Agency, and the Council on Environmental Quality, 
        the estimates for the social cost of carbon, as well as the 
        subsequently developed estimates of the social cost of methane, 
        and the social cost of nitrous oxide fail to comply with the 3- 
        and 7-percent discount rates prescribed by the document of the 
        Office of Management and Budget entitled ``Circular A-4'' and 
        dated September 17, 2003;
          (4) while the document of the Office of Management and Budget 
        entitled ``Circular A-4'' and dated September 17, 2003, 
        specifies that, in carrying out an evaluation of the global 
        effects of a rule, regulation, or action, the evaluation shall 
        be reported separately from domestic costs and benefits of that 
        rule, regulation, or action, the social cost of carbon instead 
        calculates the global benefits in lieu of, not in addition to, 
        the domestic costs of a rule, regulation, or action;
          (5) the use of the estimates for the social cost of carbon, 
        the social cost of methane, and the social cost of nitrous 
        oxide, in the rulemakings of the Department of Energy, the 
        Environmental Protection Agency, the Department of the 
        Interior, and the Council on Environmental Quality without 
        public notice and an adequate opportunity for comment violates 
        scientific peer review requirements;
          (6) the Environmental Protection Agency relied upon the 
        social cost of methane, without appropriate peer review or 
        opportunity for public notice and comment, in justifying the 
        costs and benefits of the September 2015 proposed and the June 
        2016 finalized rules under the Clean Air Act for methane 
        emissions from new, modified, and reconstructed sources in the 
        oil and gas sector;
          (7) the Department of the Interior used the social cost of 
        methane estimate to justify the costs and benefits of the final 
        rule entitled ``Waste Prevention, Production Subject to 
        Royalties, and Resource Conservation'' (81 Fed. Reg. 83008 
        (November 18, 2016));
          (8) the Council on Environmental Quality issued final 
        guidance on August 1, 2016, that, with respect to a monetary 
        cost-benefit analysis for an evaluation of a proposed Federal 
        action under the National Environmental Policy Act of 1969 (42 
        U.S.C. 4321 et seq.), directed the head of each Federal agency 
        to include the social cost of carbon in any consideration of 
        the effect of greenhouse gas emissions;
          (9) the regulations of the Department of Energy, the 
        Environmental Protection Agency, the Department of the 
        Interior, and the Council on Environmental Quality are costing 
        families of the United States billions of dollars each year and 
        are justified, in large part, by the social cost of carbon, the 
        social cost of methane, and the social cost of nitrous oxide;
          (10) continued use of the social cost of carbon, the social 
        cost of methane, and the social cost of nitrous oxide by the 
        Department of Energy, the Environmental Protection Agency, the 
        Department of the Interior, and the Council on Environmental 
        Quality ignores sound science for the purpose of eliminating 
        the exploration, mining, production, and use of the abundant 
        domestic sources of fossil fuel energy of the United States;
          (11) Executive Order 13777 (82 Fed. Reg. 12285 (March 1, 
        2017)) states that the policy of the United States is to 
        alleviate any unnecessary regulatory burden on the people of 
        the United States; and
          (12) Executive Order 13783 of March 28, 2017 (82 Fed. Reg. 
        16093 (March 31, 2017))--
                  (A) disbands the interagency working group referred 
                to in paragraph (3);
                  (B) withdraws the social cost of carbon, the social 
                cost of methane, and the social cost of nitrous oxide; 
                and
                  (C) directs Federal agencies, in monetizing the value 
                of changes in greenhouse gas emissions as a result of a 
                regulation, to follow the document of the Office of 
                Management and Budget entitled ``Circular A-4'' and 
                dated September 17, 2003, by using the discount rates 
                specified in that document and evaluating only the 
                domestic effects of the regulation.

SEC. 3. DEFINITIONS.

  In this Act:
          (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
          (2) Social cost of carbon.--The term ``social cost of 
        carbon'' means--
                  (A) the estimate of the social cost of carbon 
                described in--
                          (i) the document entitled ``Technical Support 
                        Document: Social Cost of Carbon for Regulatory 
                        Impact Analysis Under Executive Order 12866'', 
                        published by the Interagency Working Group on 
                        Social Cost of Carbon, United States 
                        Government, in February 2010; or
                          (ii)(I) the document entitled ``Technical 
                        Support Document: Technical Update of the 
                        Social Cost of Carbon for Regulatory Impact 
                        Analysis Under Executive Order 12866'', 
                        published by the Interagency Working Group on 
                        Social Cost of Carbon, United States 
                        Government, in May 2013 and revised in November 
                        2013 and July 2015, and published and revised 
                        by the Interagency Working Group on the Social 
                        Cost of Greenhouse Gases, United States 
                        Government, in August 2016; or
                          (II) any successor or substantially related 
                        document; and
                  (B) any other estimate of the monetized damages 
                associated with an incremental increase in carbon 
                dioxide emissions in a given year.
          (3) Social cost of methane.--The term ``social cost of 
        methane'' means--
                  (A) the estimate of the social cost of methane 
                described in--
                          (i) the proposed rule entitled ``Oil and 
                        Natural Gas Sector: Emission Standards for New 
                        and Modified Sources'' (80 Fed. Reg. 56593 
                        (September 18, 2015));
                          (ii) the final rule entitled ``Oil and 
                        Natural Gas Sector: Emission Standards for New, 
                        Reconstructed, and Modified Sources'' (81 Fed. 
                        Reg. 35824 (June 3, 2016));
                          (iii) the regulatory impact analysis entitled 
                        ``Regulatory Impact Analysis of the Final Oil 
                        and Natural Gas Sector: Emission Standards for 
                        New, Reconstructed, and Modified Sources'', 
                        prepared by the Environmental Protection 
                        Agency, Office of Air and Radiation, in May 
                        2016 and identified by docket ID number EPA-HQ-
                        OAR-2010-0505-7630; or
                          (iv)(I) the document entitled ``Addendum to 
                        Technical Support Document on Social Cost of 
                        Carbon for Regulatory Impact Analysis under 
                        Executive Order 12866: Application of the 
                        Methodology to Estimate the Social Cost of 
                        Methane and the Social Cost of Nitrous Oxide'', 
                        published by the Interagency Working Group on 
                        Social Cost of Greenhouse Gases, United States 
                        Government, in August 2016; or
                          (II) any successor or substantially related 
                        document; and
                  (B) any other estimate of the monetized damages 
                associated with an incremental increase in methane 
                emissions in a given year.
          (4) Social cost of nitrous oxide.--The term ``social cost of 
        nitrous oxide'' means--
                  (A) the estimate of the social cost of nitrous oxide 
                described in--
                          (i) the document entitled ``Addendum to 
                        Technical Support Document on Social Cost of 
                        Carbon for Regulatory Impact Analysis under 
                        Executive Order 12866: Application of the 
                        Methodology to Estimate the Social Cost of 
                        Methane and the Social Cost of Nitrous Oxide'', 
                        published by the Interagency Working Group on 
                        Social Cost of Greenhouse Gases, United States 
                        Government, in August 2016; or
                          (ii) any other successor or substantially 
                        related document; and
                  (B) any other estimate of the monetized damages 
                associated with an incremental increase in nitrous 
                oxide emissions in a given year.

SEC. 4. PROHIBITION ON CONSIDERING THE SOCIAL COST OF GREENHOUSE GAS, 
                    INCLUDING THE SOCIAL COST OF CARBON, THE SOCIAL 
                    COST OF METHANE, AND THE SOCIAL COST OF NITROUS 
                    OXIDE.

  (a) In General.--The Secretary of Energy, under any authority, the 
Administrator, under the Clean Air Act (42 U.S.C. 7401 et seq.), the 
Secretary of the Interior, under any authority, and the Chair of the 
Council on Environmental Quality, under the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.), may not consider the 
social cost of carbon, social cost of methane, or social cost of 
nitrous oxide--
          (1) as part of any cost-benefit analysis required under--
                  (A) any law;
                  (B) Executive Order 12866 (5 U.S.C. 601 note; 
                relating to regulatory planning and review); or
                  (C) Executive Order 13563 (5 U.S.C. 601 note; 
                relating to improving regulation and regulatory 
                review);
          (2) in any rulemaking;
          (3) in the issuance of any guidance;
          (4) in taking any other agency action; or
          (5) as a justification for any rulemaking, guidance document, 
        or agency action.
  (b) Exception.--The Secretary of Energy, the Administrator, the 
Secretary of the Interior, and the Chair of the Council on 
Environmental Quality may consider the social cost of carbon, social 
cost of methane, or social cost of nitrous oxide in carrying out an 
activity described in subsection (a) only if, after the date of 
enactment of this Act--
          (1) a Federal law is enacted that explicitly authorizes the 
        consideration; or
          (2) the Secretary of Energy, the Administrator, the Secretary 
        of the Interior, or the Chair of the Council on Environmental 
        Quality uses an estimate for the social cost of carbon, social 
        cost of methane, or social cost of nitrous oxide that--
                  (A) complies with the requirements of the document of 
                the Office of Management and Budget entitled ``Circular 
                A-4'' and dated September 17, 2003;
                  (B) uses the discount rates of 3 and 7 percent 
                specified in that document;
                  (C) considers only the domestic costs and benefits of 
                the activity; and
                  (D) uses only--
                          (i) the most up to date and empirically 
                        estimated equilibrium climate sensitivity 
                        distributions; and
                          (ii) realistic time horizons.
  (c) Restriction on Use of Estimates.--The Secretary of the Interior 
and the Chair of the Council of Environmental Quality in carrying out 
an activity described in subsection (a), may not use an estimate under 
subsection (b)(2) for--
          (1) the determination of indirect or cumulative effects;
          (2) the determination of localized or regional impacts; and
          (3) project-level review.

SEC. 5. REPORT OF THE ADMINISTRATOR.

  Not later than 120 days after the date of enactment of this Act, the 
Administrator, in coordination and consultation with the Secretary of 
Energy, the Secretary of the Interior, and the Chair of the Council on 
Environmental Quality, shall submit to the Committees on Energy and 
Commerce and Natural Resources of the House of Representatives and the 
Committees on Environment and Public Works and Energy and Natural 
Resources of the Senate a report describing the number of proposed and 
final rulemakings, guidance documents, and agency actions that, since 
January 2009, have used the social cost of carbon, the social cost of 
methane, or the social cost of nitrous oxide, including the use of the 
social cost of carbon, the social cost of methane, or the social cost 
of nitrous oxide as part of any cost-benefit analysis required under 
Executive Order 12866 (5 U.S.C. 601 note; relating to regulatory 
planning and review) or other relevant authority.

                          PURPOSE OF THE BILL

    The purpose of H.R. 3117 is to prohibit the Secretary of 
Energy, the Administrator of the Environmental Protection 
Agency, the Secretary of the Interior, and the Chair of the 
Council on Environmental Quality from considering the social 
cost of carbon, the social cost of methane, or the social cost 
of nitrous oxide, in taking any action.

                  BACKGROUND AND NEED FOR LEGISLATION

    The ``social cost of carbon dioxide'' (SC-CO2) allows 
agencies to compare the ``benefits'' of emission reductions 
with the costs of mitigation.\1\ The SC-CO2 has been used by 
the Environmental Protection Agency (EPA) and other agencies 
for regulatory actions that are subject to Executive Order 
12866.\2\ That Order directs agencies ``to assess both the 
costs and benefits of the intended regulation. . . .''\3\ Prior 
to 2009, multiple federal agencies, including the EPA, began 
developing their own analyses of the SC-CO2 as part of the 
rulemaking process because of a November 2007 Ninth Circuit 
decision directing the Department of Transportation to consider 
the SC-CO2 in a rulemaking process.\4\ The Ninth Circuit 
premised this decision on an assumption that ``the value of 
carbon emissions reduction is certainly not zero.''\5\
---------------------------------------------------------------------------
    \1\Jane A. Leggett, Social Costs of Carbon/Greenhouse Gas: Issues 
for Congress (2017), http://www.crs.gov/Reports/
IF10625?source=search&guid;=6e7f5979caa44d48bbd4928a85c5509b& index=0.
    \2\Id.
    \3\Exec. Order No. 12866, 58 FR 51735; October 4, (1993), https://
www.reginfo.gov/public/jsp/Utilities/EO_12866.pdf.
    \4\Linda Tsang, Courts Evaluate How Federal Agencies Put a Price on 
Carbon (2016), http://www.crs.gov/LegalSidebar/details/1684.
    \5\Leggett, supra, note 1.
---------------------------------------------------------------------------
    In 2009, an interagency working group was convened by the 
Council of Economic Advisers and the Office of Management and 
Budget (OMB) to determine how best to monetize the net effects 
(both positive and negative) of CO2 emissions and sought to 
harmonize a range of different SC-CO2 values across multiple 
federal agencies.\6\ The purpose of this process was to ensure 
that agencies were using the best available information and to 
promote consistency in the way agencies quantify the 
``benefits'' of reducing CO2 emissions.\7\ The interagency 
group was comprised of scientific and economic experts from the 
White House and federal agencies, including: Council on 
Environmental Quality, National Economic Council, Office of 
Energy and Climate Change, Office of Science and Technology 
Policy, EPA, and the Departments of Agriculture, Commerce, 
Energy, Transportation, and Treasury.\8\ The interagency group 
identified a variety of assumptions, which EPA then used to 
estimate the SC-CO2.\9\ EPA relied on three integrated 
assessment models, which combined climate processes, economic 
growth, and interactions.\10\
---------------------------------------------------------------------------
    \6\Exec. Office of the Pres. Council on Environmental Quality, 
Final Guidance for Federal Departments and Agencies on Consideration of 
Greenhouse Gas Emissions and the Effects of Climate Change in the 
National Environmental Policy Act Reviews (2016). https://obama 
whitehouse.archives.gov/sites/whitehouse.gov/files/documents/
nepa_final_ghg_guidance.pdf.
    \7\Id.
    \8\Id.
    \9\Id.
    \10\Id.
---------------------------------------------------------------------------
    This metric, named the social cost of carbon (SCC), was 
used to validate many Obama administration environmental 
regulations that target direct and indirect carbon dioxide 
emissions from various sources. However, the SCC did not follow 
the specific, longstanding guidelines set forth by OMB in 
developing and calculating the SCC figures.\11\ As a result, 
the estimates were significantly higher than they would have 
been had OMB's guidance been followed. This in turn led to 
highly questionable--and often misleading--claims regarding the 
purported economic benefits that new regulations would provide.
---------------------------------------------------------------------------
    \11\See Id..; Office of Management and Budget, Circular A-4 (2003), 
https://obamawhitehouse.archives.gov/omb/circulars_a004_a-4/.
---------------------------------------------------------------------------
    Since its first use, the SCC has been re-calculated 
multiple times to inflate the supposed cost of small increases 
of CO2 in the atmosphere and thus, the purported monetary 
benefits derived from reducing those emissions.\12\ For 
example, the SCC metric was used to claim that EPA's Clean 
Power Plan (CPP) would ``lead to climate and health benefits 
worth an estimated $55 billion to $93 billion per year in 
2030.''\13\ However, the assumptions and parameters used to 
calculate SCC overwhelmingly skewed the estimates in favor of 
cutting carbon emissions.
---------------------------------------------------------------------------
    \12\U.S. Environmental Protection Agency, The Social Cost of 
Carbon--Estimating the Benefits of Reducing Greenhouse Gas Emissions, 
Climate Change (2017), https://19january2017snapshot.epa.gov/
climatechange/social-cost-carbon_.html.
    \13\U.S. Environmental Protection Agency, FACT SHEET: Clean Power 
Plan Benefits--Why We Need a Cleaner, More Efficient Power Sector, 
Clean Power Plan (2015), https://
archive.epa.gov/epa/cleanpowerplan/fact-sheet-clean-power-plan-
benefits.html.
---------------------------------------------------------------------------

Domestic costs versus global benefits

    During applications of SCC used to calculate the costs and 
benefits of U.S. climate regulations, the monetary benefits 
presented were global, not domestic.\14\ That is, in these 
cost/benefit calculations, domestic costs were compared with 
worldwide benefits. Even if the estimated benefits are 
correct--a problematic premise in and of itself for many 
reasons--such a juxtaposition is misleading, far overstating 
the true benefits to the United States relative to the costs 
that the American economy will incur.
---------------------------------------------------------------------------
    \14\See Exec. Office of the Pres. Council on Environmental Quality, 
supra, note 6.
---------------------------------------------------------------------------
    Further, the implicit argument made in weighing global 
benefits versus domestic costs is that any domestic regulation 
may be justifiable regardless of cost to our economy, if the 
benefits reaped by citizens of other nations around the globe 
outweigh the costs to the United States. For precisely this 
reason, OMB's Circular A-4--designed to ensure sound regulatory 
analysis by federal agencies--explicitly states: ``Your 
analysis should focus on benefits and costs that accrue to 
citizens and residents of the United States.''\15\ Previous SCC 
calculations ignore this directive.
---------------------------------------------------------------------------
    \15\Office of Management and Budget, Circular A-4 (2003), https://
obamawhitehouse.archives.gov/omb/circulars_a004_a-4/.
---------------------------------------------------------------------------

Discount rates

    Prior SCC calculations used favorable discount rates to 
make the case for greater benefits. Discount rates are used to 
estimate the value of actions taken today on the economy of the 
future. Because of inflation and other factors, one dollar's 
worth of benefit today is worth less. The higher the discount 
rate, the lower the projected benefit's value in the future.
    OMB's Circular A-4 explicitly states that ``a real discount 
rate of 7 percent should be used as a base-case for regulatory 
analysis.''\16\ Previous calculations of the SCC, however, 
ignored this directive and instead opted to use the lower 
discount rates of 2.5, 3, and 5 percent.\17\ The reason is 
simple: using a 7 percent discount rate, as directed by OMB, 
would lead to far smaller--or even negative--values for the 
SCC, greatly diminishing the calculated ``benefits'' of 
reducing carbon dioxide emissions.
---------------------------------------------------------------------------
    \16\Office of Management and Budget, supra, note 15.
    \17\U.S. Environmental Protection Agency, supra note 12.
---------------------------------------------------------------------------

Additional concerns

    There are other problems inherent to historical 
applications of SCC as well, including the use of climate 
modeling that likely misinterprets the sensitivity of the 
earth's climate to increased carbon dioxide emissions; the use 
of ``co-benefits'' of reductions of criteria pollutants such as 
ozone and particulate matter in climate policies; the 
projection of benefits over timelines that are decades longer 
than any other time horizons used in federal cost/benefit 
estimates; and failure to account for the economic benefits 
resulting from the use of the energy leading to the governed 
CO2 emissions.\18\
---------------------------------------------------------------------------
    \18\See Exec. Office of the Pres. Council on Environmental Quality, 
supra note 6.
---------------------------------------------------------------------------

H.R. 3117

    H.R. 3117 would require certain federal agencies to use 
certain assumptions as part of their analysis if they consider 
the social cost of greenhouse gases (carbon dioxide, methane 
and nitrous oxide) as part of any rulemaking, guidance issuance 
or justification for an agency action. Specifically, the 
agencies are required to comply with OMB Circular A-4 
(including discount rates), consider only domestic rather than 
international costs and benefits; and use the most up-to-date 
and empirically estimated equilibrium climate sensitivity 
distributions and realistic time horizons for climate change 
scenarios. As ordered reported, the bill places further 
restrictions on the use of social cost of greenhouse gases 
estimates by the Secretary of the Interior and Chair of the 
Council on Environmental Quality. The bill would also require 
EPA to submit a report to Congress describing the number of 
agency actions that have used estimates of the social costs of 
greenhouse gases since 2009.

                            COMMITTEE ACTION

    H.R. 3117 was introduced on June 29, 2017, by Congressman 
Evan H. Jenkins (R-WV). The bill was referred to the Committee 
on Energy and Commerce and additionally referred to the 
Committee on Natural Resources. Within the Committee on Natural 
Resources, the bill was referred to the Subcommittee on Energy 
and Mineral Resources. On July 27, 2017, the Subcommittee held 
a hearing on the bill. On November 29, 2017, the Natural 
Resources Committee met to consider the bill. The Subcommittee 
was discharged by unanimous consent.
    Congressman Greg Gianforte (R-MT) offered an amendment 
designated 003; it was adopted by a roll call vote of 18 yeas 
to 15 noes, as follows:


    No other amendments were offered, and the bill, as amended, 
was ordered favorably reported to the House of Representatives 
by a roll call vote of 18 ayes to 15 noes on November 30, 2017, 
as follows:


            COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

      COMPLIANCE WITH HOUSE RULE XIII AND CONGRESSIONAL BUDGET ACT

    1. Cost of Legislation and the Congressional Budget Act. 
With respect to the requirements of clause 3(c)(2) and (3) of 
rule XIII of the Rules of the House of Representatives and 
sections 308(a) and 402 of the Congressional Budget Act of 
1974, the Committee has received the following estimate for the 
bill from the Director of the Congressional Budget Office:

H.R. 3117--Transparency and Honesty in Energy Regulations Act of 2017

    H.R. 3117 would require federal agencies to use certain 
assumptions as part of their analysis when they consider the 
social cost of greenhouse gases as part of any rulemaking or 
justification for an agency action.\1\ For regulatory analysis, 
federal agencies currently may use estimates of the social 
costs of greenhouse gases as a way to quantify the costs or 
benefits of regulations that increase or reduce greenhouse gas 
emissions; agencies consider those effects along with other 
costs or benefits arising from proposed regulations. If federal 
agencies continue to use estimates of the social costs of 
greenhouse gases to evaluate a proposed rule or action, the 
bill would require them to:
---------------------------------------------------------------------------
    \1\The social cost of carbon, the social cost of methane, and the 
social cost of nitrous oxide are estimates of the net present value of 
economic and other damages caused by the climate change resulting from 
one ton of each of those greenhouse gases being emitted into the 
atmosphere in a given year. The estimates are expressed in terms of 
dollars per ton of each gas and use discount rates to combine the cost 
of damage incurred over long periods into a single, net-present-value 
estimate of the costs of climate change.
---------------------------------------------------------------------------
           Use discount rates consistent with the 
        Office of Management and Budget's (OMB's) Circular A-4 
        guidance to federal agencies;\2\
---------------------------------------------------------------------------
    \2\Discount rates are used in cost-benefit analysis to account for 
differences between cost and benefits over time, allowing for all 
benefits and costs to be considered in equivalent units at the present 
time. OMB's Circular A-4 instructs federal agencies to use discount 
rates of both 3 percent and 7 percent as a default, base-case scenario 
when performing cost-benefit analysis of all regulatory actions.
---------------------------------------------------------------------------
           Consider only domestic, rather than 
        international, costs and benefits of the activity; and
           Use only the most up-to-date and empirically 
        estimated climate sensitivity distributions and 
        realistic time horizons for climate change scenarios.
    H.R. 3117 also would require the Environmental Protection 
Agency (EPA) to submit a report to the Congress describing the 
number of agency actions that have used estimates of the social 
costs of greenhouse gases since 2009.
    The costs of implementing the bill would depend on the 
extent to which federal agencies use estimates of the social 
costs of greenhouse gases as part of the analysis of agency 
actions. Based on a review of regulatory actions by federal 
agencies in 2017 and using information from EPA, CBO expects 
that federal agencies will continue to use estimates of the 
social costs of greenhouse gases in the analysis of rules 
during the 2018-2022 period. Executive Order 13783, issued in 
2017, already requires federal agencies to use OMB's discount 
rates and to quantify only the domestic costs and benefits when 
using such social cost analysis.
    To comply with the bill's requirement that estimates of the 
social costs of greenhouse gases incorporate current 
assumptions about climate sensitivity and realistic time 
horizons, CBO expects that federal agencies would need to 
update estimates at least once over the 2018-2022 period to 
account for changes reported in the climate change literature. 
An interagency estimate of the social cost of greenhouse gases 
was first issued in 2010, and estimates were updated in 2013, 
2015, and 2016. Based on information from EPA about the process 
for past updates of the social costs of greenhouse gases, CBO 
estimates that the update would cost $1 million over the 2018-
2022 period.
    Enacting H.R. 3117 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    CBO estimates that enacting H.R. 3117 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2028.
    H.R. 3117 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Jon Sperl. The 
estimate was approved by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.
    2. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill is to prohibit the Secretary of Energy, 
the Administrator of the Environmental Protection Agency, the 
Secretary of the Interior, and the Chair of the Council on 
Environmental Quality from considering the social cost of 
carbon, the social cost of methane, or the social cost of 
nitrous oxide, in taking any action.

                           EARMARK STATEMENT

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    COMPLIANCE WITH PUBLIC LAW 104-4

    This bill contains no unfunded mandates.

                       COMPLIANCE WITH H. RES. 5

    Directed Rule Making. This bill does not contain any 
directed rule makings.
    Duplication of Existing Programs. This bill does not 
establish or reauthorize a program of the federal government 
known to be duplicative of another program. Such program was 
not included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-139 
or identified in the most recent Catalog of Federal Domestic 
Assistance published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169) as relating to other programs.

                PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

    This bill is not intended to preempt any State, local or 
tribal law.

                        CHANGES IN EXISTING LAW

    If enacted, this bill would make no changes to existing 
law.

                            DISSENTING VIEWS

    We oppose H.R. 3117 because it is counterproductive to 
efforts to address climate change, one of the most pressing 
environmental, economic, public health, and national security 
issues of our time. Congressional Republicans have gotten used 
to failing to act to either mitigate or prepare for the harmful 
impacts of a changing climate, but with this bill they are 
attempting to go backwards, and take away a scientifically-
derived and scientifically-endorsed tool for federal agencies 
to measure the impacts of their actions on future generations.
    Responding to disasters such as storms, floods, and fires 
is a massive expense for the federal government: over $350 
billion in the past decade, not including the responses to the 
2017 hurricanes that battered Texas, Florida, Puerto Rico, and 
the U.S. Virgin Islands. Climate change will make these costs 
rise through stronger storms and more intense fires, while 
adding new costs for infrastructure replacement from rising sea 
levels, additional health care due to worsening air quality, 
new efforts to combat invasive species, and considerably more. 
The Rhodium Group has estimated that by 2040, these costs could 
add up to $316 billion each year, increasing to over 1 trillion 
dollars annually by 2080.\1\ It will be up to our 
grandchildren, and their grandchildren, to bear this burden 
that we are placing on their shoulders.
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    \1\U.S Government Accountability Office, GAO-17-720, CLIMATE 
CHANGE: Information on Potential Economic Effects Could Help Guide 
Federal Efforts to Reduce Fiscal Exposure, September 2017.
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    Using the social cost of carbon allows us to understand the 
impacts that our decisions today will have on these generations 
to come. To avoid doing so is morally unjustifiable. The lack 
of certainty about the specific impacts of a single ton of 
carbon dioxide emissions, which the Majority uses to excuse 
complete inaction on the issue, is both a cop-out and 
completely irrelevant. No one knows exactly how many years they 
can add to their lives if they quit smoking, but that doesn't 
keep people from making the effort. Climate change is already 
occurring, and blithely ignoring how much worse we are making 
it by refusing to consider the social cost of carbon is nothing 
more than whistling past the graveyard.
    While the underlying bill is bad in its own right, during 
markup the Majority adopted an amendment that even eliminates 
the ability to use outdated estimates of the social cost of 
carbon for indirect effects, cumulative effects, localized 
impacts, regional impacts, and project-level review. 
Understanding cumulative effects of decisions is a bedrock 
principle of federal environmental review, and ``project-level 
review'' would appear to eliminate the ability to do any sort 
of analysis whatsoever. The amendment simply digs the hole in 
the sand even deeper for Republicans to hide their heads in.
    For these reasons, and to protect the health and economic 
well-being of future generations, we oppose H.R. 3117.

                                   Raul M. Grijalva,
                                           Ranking Member, Committee on 
                                               Natural Resources.
                                   Grace F. Napolitano.
                                   Alan Lowenthal.
                                   Nanette Barragan.
                                   A. Donald McEachin.
                                   Jared Huffman.
                                   Colleen Hanabusa.
                                   Darren Soto.

                                  [all]