This bill forbids Federal agencies from considering any monetized social-cost estimate for greenhouse gases — explicitly naming the social cost of carbon, methane, and nitrous oxide and any comparable estimate — when performing cost‑benefit analyses, issuing rules or guidance, taking agency actions, or using such estimates as a justification for regulatory activity. It defines the covered terms by reference to a set of Interagency Working Group and EPA technical support and regulatory-impact documents and by capturing successor or substantially related documents and any other monetized damage estimate.
The Act also requires each agency to report to specified Senate and House committees within 120 days of enactment, showing how many proposed and final rulemakings, guidance documents, and agency actions since January 2009 used those social-cost estimates. For regulatory and compliance professionals, the bill replaces a commonly used monetized input in regulatory analyses with an explicit statutory prohibition and forces agencies to disclose historical reliance on those metrics.
At a Glance
What It Does
The bill prohibits agencies from using monetized social-cost estimates for greenhouse gases as part of any cost‑benefit or cost‑effectiveness analysis required under law or Executive Orders (including 12866 and 13563), in rulemaking, in guidance documents, in any other agency action, or as a stated justification for such actions. Definitions sweep in named Interagency Working Group and EPA documents plus successors and any other monetized estimates.
Who It Affects
Federal executive-branch agencies that perform regulatory impact analyses (notably EPA, DOE, DOT and other rulewriting agencies), industry participants whose compliance costs or benefits were routinely offset with social-cost inputs, and congressional committees that will receive the mandated usage reports. Regulatory economists, OIRA reviewers, and agency rulewriters will face immediate analytic changes.
Why It Matters
Monetized social-cost estimates have been a common tool for valuing long-term climate damages in regulation; removing them changes how costs and benefits are compared, can reduce quantified benefits attributed to greenhouse‑gas reductions, and alters the evidentiary basis agencies use to justify rules. The retroactive-report requirement creates a paper trail for congressional oversight of past agency reliance.
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What This Bill Actually Does
The bill creates a bright‑line prohibition: agencies may not use monetized estimates of the social costs of greenhouse gases when doing any kind of regulatory or programmatic analysis or when justifying rules or guidance. It does not create an alternative valuation method; it simply removes this particular class of monetized metric from agency toolkits.
The statutory definitions are broad: they name specific Interagency Working Group and EPA technical support documents from 2010 through 2024 and explicitly capture successor or substantially related documents and “any other” monetized estimate of greenhouse‑gas damages.
Practically, agencies that incorporated social‑cost numbers into regulatory impact statements and benefit‑cost calculations will have to exclude that line item from the quantifiable benefits when producing future analyses. That affects how agencies present net benefits, cost‑effectiveness comparisons, and sensitivity analyses.
The prohibition applies wherever an agency might have previously invoked a social‑cost number — not only in formal rule text but also in guidance and other actions and in the agency’s stated rationale for regulatory choices.The bill adds a disclosure obligation: within 120 days of enactment, each agency must report to four named congressional committees the number of proposed and final rulemakings, guidance documents, and other actions since January 2009 that used the social‑cost metrics named in the bill. That reporting requirement forces agencies to inventory historical analytic choices, which may reveal the extent to which different agencies relied on these monetized estimates across major regulations.The statute is procedural and definitional rather than prescriptive about alternative analytic approaches.
It does not, for example, require agencies to adopt a particular replacement method (such as qualitative descriptions or non‑monetized modeling), nor does it specify enforcement mechanisms or civil penalties for violations; implementation will therefore depend on agency internal controls, Office of Management and Budget review practices, and potential judicial scrutiny.
The Five Things You Need to Know
Section 2 defines covered terms by listing specific Interagency Working Group and EPA documents (2010, 2013/2015/2016 updates, 2021 interim estimates, and several 2023–2024 EPA regulatory impact analyses) and then capturing any successor or substantially related document.
The prohibition (Section 3) applies in five contexts: cost‑benefit/cost‑effectiveness analyses under law or Executive Orders 12866/13563, rulemaking, guidance issuance, any other agency action, and when an agency cites such estimates as justification.
Section 4 requires each Federal agency to deliver a report within 120 days after enactment to four named Senate and House committees, counting how many proposed and final rules, guidance documents, and agency actions have used those social‑cost estimates since January 2009.
The statutory definition of 'Federal agency' incorporates the definition in 5 U.S.C. § 551, so the prohibition reaches the broad class of executive branch agencies covered by the Administrative Procedure Act.
The bill does not include an express enforcement provision (civil penalties, private right of action, or criminal sanctions); compliance would rely on internal agency processes, OMB oversight, and the possibility of judicial review challenging agency actions that courts conclude violated the statutory ban.
Section-by-Section Breakdown
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Short title
Provides the Act's short name: the 'Transparency and Honesty in Energy Regulations Act.' This is a standard housekeeping provision that has no operative effect on agency conduct, but it signals the legislative framing and targeted policy area (energy and related regulation).
Definitions of covered terms and documents
Sets out precise definitions for 'Federal agency' (incorporating 5 U.S.C. § 551) and for the social‑cost terms. For social costs the statute lists a sequence of technical support documents and regulatory‑impact analyses from the Interagency Working Group and EPA (covering SCC, SCM, and SCN2O) and then adds any successor or substantially related documents. Each social‑cost term also includes a residual clause capturing 'any other estimate' of monetized damages tied to incremental emissions. That drafting makes the ban expansive: it covers not only named technical reports but also any monetized estimate that performs the same function.
Prohibition on considering social‑cost estimates in agency activity
Imposes the substantive bar: agencies may not consider the named social‑cost estimates when conducting cost‑benefit/cost‑effectiveness analyses required by law or Executive Orders 12866/13563, in rulemaking, guidance, any other agency action, or as a justification for such actions. The provision is broad in application language and in the list of contexts where the metric cannot be used, signaling Congressional intent to preclude both quantitative inputs in formal analyses and rhetorical reliance on those numbers in agency explanations.
Retroactive usage report to Congress
Requires each agency to submit a report within 120 days after enactment to four specific congressional committees (Senate Environment and Public Works; Senate Energy and Natural Resources; House Energy and Commerce; House Natural Resources). The report must enumerate the number of proposed and final rulemakings, guidance documents, and other agency actions since January 2009 that used the social‑cost metrics named in the Act, including use under Executive Order 12866 or other authority. The provision creates a discrete oversight task and a cross‑agency inventory requirement.
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Explore Energy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Emitters regulated on greenhouse gases (e.g., coal and natural‑gas power plants, oil and gas producers): Removing monetized social‑cost inputs can reduce the quantified benefits of emission‑reducing measures in rulemakings, potentially lowering the apparent net benefits of stringent standards and easing compliance burdens.
- Industry trade associations and regulated businesses: These parties gain a stronger analytic footing for contesting rules that previously relied on social‑cost monetization to show benefits—fewer monetized benefits can make it harder for agencies to justify stricter limits.
- Congressional committees and oversight offices seeking transparency: The mandated retrospective reports provide a concrete record of historical reliance on these metrics, aiding legislative oversight and targeted inquiries into past regulatory decisions.
Who Bears the Cost
- Federal agencies that prepare regulatory analyses (EPA, DOE, DOT, etc.): They must change analytic practices, remove or reformat previously used monetized benefits, and compile the retrospective reports within a 120‑day window—creating administrative and analytic burden.
- Environmental and public‑health stakeholders advocating for climate accounting: NGOs and state regulators lose a commonly used quantitative input for demonstrating the societal benefits of greenhouse‑gas reductions, which can weaken the evidentiary record supporting stricter protections.
- Office of Information and Regulatory Affairs (OIRA) and agency regulatory economists: They face the practical challenge of reviewing analyses that omit a standard monetized externality, complicating cross‑agency comparability and OMB’s review of net‑benefit claims.
Key Issues
The Core Tension
The central dilemma is between excluding contested, model‑dependent monetized estimates to avoid uncertain long‑term damage valuations and preserving agencies' ability to account for greenhouse‑gas externalities in regulatory decisions; the bill solves the former by banning monetization but leaves no statutory framework for reliably capturing the latter, forcing trade‑offs between analytic simplicity and comprehensive accounting of societal climate harms.
The bill draws a wide net in two ways: by enumerating specific historical documents and by including 'any successor or substantially related document' and 'any other estimate' of monetized damages. That phrasing will force agencies and courts to litigate the boundary between prohibited monetized estimates and permissible non‑monetized climate information.
For example, would a monetized estimate produced by an external academic group count as an 'other estimate'? Would an agency’s internal sensitivity analysis that includes climate‑damage monetization be considered 'considering' the social cost?
The statute does not define 'consider' or set a standard for incidental references, leaving room for dispute over de minimis uses.
Implementation logistics are also unresolved. The Act prohibits use but does not prescribe alternative quantitative methods or require agencies to present unquantified benefits in a standardized way; agencies may respond by relying more on qualitative descriptions or sectoral modeling that avoids monetization.
The lack of an express enforcement mechanism means compliance will likely be enforced through OMB review, internal counsel advice, and litigation challenging agency decisions as contrary to statute. The retrospective reporting requirement imposes a definitional and record‑search task across agencies for a 16‑year lookback period (2009 onward), which may be time‑consuming and uneven because older rulemaking records vary in structure and metadata.
Finally, the prohibition could create perverse incentives in rule design: agencies may avoid conducting comprehensive long‑term benefit accounting rather than replacing monetized estimates with transparent non‑monetized alternatives. That outcome risks reducing the comparability of regulatory impact statements across agencies and over time, complicating congressional oversight and public understanding of how regulatory choices address climate externalities.
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