A conservative economist who has written that “no consensus exists that man-made emissions are the primary driver of global warming” has resigned from the Environmental Protection Agency, according to multiple people notified of the move Thursday.
David Kreutzer, who also served on the president-elect’s “landing team” for the EPA, is returning to the conservative Heritage Foundation. Kreutzer, formerly a fellow at Heritage, left it for a permanent job at the EPA focused on economic policy. According to multiple officials there, he sent an email this week to colleagues informing them that Friday would be his last day.
Kreutzer is the second member of President Trump’s environmental team to leave the agency in recent weeks. David Schnare, a conservative who had worked at the free-market Energy and Environmental Legal Institute before joining the Trump administration, departed two weeks ago. Both were vocal critics of the Obama administration and advocated lifting federal restrictions on activities in the energy industry as well as elsewhere in the private sector.
An EPA spokeswoman declined to comment Thursday, noting that the agency does not comment on personnel matters. A Heritage spokesman said the same. Kreutzer did not respond to requests for comment by email and phone.
Top aides to EPA Administrator Scott Pruitt lobbied Kreutzer to stay, according to an individual familiar with the discussions who spoke on the condition of anonymity to talk about personnel decisions.
Working within the EPA would have provided Kreutzer with a prime platform to advance his arguments that the science behind climate change is not sufficiently robust to support stringent federal limits on greenhouse gases — just the sort of regulations that the agency has begun to reverse under Pruitt.
Kreutzer, an economist who previously served as the mayor of Dayton, Va., has pressed for recalculating the “social cost of carbon,” a metric that the Obama administration had used to assess the negative impacts of climate change. Kreutzer advocated for using a higher “discount rate” that would lower the current value of benefits or costs to take place far into the future. In short, the change would make it harder to justify action to reduce greenhouse-gas emissions.
Some administration backers, such as Thomas J. Pyle, who headed the Trump transition team for the Energy Department, want to abolish it altogether because it can vary so dramatically based on the discount rate an analyst uses.
“At the end of the day, the social cost of carbon is an arbitrary metric that has no place in federal rulemaking,” said Pyle, who heads the Institute for Energy Research.
Kreutzer played an important role in shaping and writing the executive order on energy policy that Trump issued Tuesday. The directive dismantled a White House working group on the social cost of carbon and rescinded a variety of Obama-era technical documents on the matter. It said that “when monetizing the value of changes in greenhouse gas emissions resulting from regulations,” agencies should rely on a 2003 guidance that the Office of Management and Budget issued during the George W. Bush administration.
That reference represented a big victory for Kreutzer. The 2003 OMB guidance instructed agencies to calculate the future costs of climate change using 3 percent and 7 percent discount rates. The lower rate makes immediate climate action more compelling and worthwhile; the 7 percent rate minimizes the benefits of taking climate action now.
Other economists and budgeting experts say that the government should use a single rate and that 7 percent is much too high given the nature of future damages as well as economic factors.
University of Chicago economics professor Michael Greenstone, who helped develop the social cost of carbon for the previous administration, said in an email that the 7 percent figure was “just plain outdated” because global interest rates had dropped so much since 2003, and that because “climate change could prove to be highly disruptive,” financial markets would normally dictate a lower rate.
Cass Sunstein, a Harvard Law School professor who was administrator of OMB’s Office of Information and Regulatory Affairs during the Obama administration, wrote in a column for Bloomberg News, “In the intergenerational context, there are compelling technical as well as ethical reasons to choose a relatively low rate, so as to avoid treating our children and grandchildren as if they are worthless.
He added that “use of a 7 percent rate would be pretty ridiculous — and should be struck down, in court, as arbitrary.”