New York Department of Environmental Conservation Applies Social Cost of Methane to Measure Benefits of Methane Emissions Regulations
To monetize benefits of greenhouse gas emissions reductions from adoption of standards requiring reductions in methane emissions from the oil and gas sector.
In March 2022, the New York Department of Environmental Conservation promulgated a rule to limit methane and volatile organic compound emissions from the oil and gas sector. In assessing the benefits and costs of this regulation, New York applied the social cost of methane values that it had previously adopted using a range of discount rates from 1–3%. Based on those valuations, the agency found that the regulation would have climate benefits of up to $345 million and that the regulation’s climate benefits would likely exceed its compliance costs.
Applying the values that it had previously adopted, DEC used a range of values for the social cost of methane: $6,578/metric ton (at a 1% discount rate), $2,782/ metric ton (2%), and $1,527/metric ton (3%).
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