Court Ruling on Social Cost of Carbon Upends Biden’s Climate Plans

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February 22, 2022

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by Maxine Joselow (Washington Post) A recent court ruling that bars the Biden administration from accounting for the real-world costs of climate change has created temporary chaos at federal agencies, upending everything from planned oil and gas lease sales to infrastructure spending.

The Feb. 11 decision by a Louisiana federal judge blocked the Biden administration from using a higher estimate forthe damage that each additional ton of greenhouse gas pollution causes society. This formula, calledthe social cost of carbon, applies toconsequential decisions affecting fossil fuel extraction on public lands, infrastructure projects and even international climate talks.

The Justice Department said it intends to appeal the Louisiana judge’s preliminary injunction. But in the meantime, the ruling could set off a scramble at federal agencies to redo their analyses of major decisions that relied on the higher social cost of carbon, a top Biden administration official warned in a brief filed Saturday.

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Mancini (Dominic J. Mancini, deputy administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget) noted that the Energy Department had identified 21 rulemakings that would be affected by the ruling, while the Environmental Protection Agency had identified five and the Interior Department had pinpointed three. In addition, he said, Transportation Department officials had expressed concern about the potential for months-long delays to a grant program for rail and transit projects.

President Biden last year directed federal agencies to applyan interim social cost of carbon of $51 per ton — the figure used under Barack Obama — while his administration weighed whether to raise itto as high as $125 per ton. Under Donald Trump, that figure had fallen as low as $1 per ton, as his appointees recalculated the impacts of climate change on present and future generations. READ MORE

COLLATERAL DAMAGE: (Politico's Morning Energy)

Court's move hamstrings climate actions across the board (The Hill)

Feds predict NEPA delays after court nixes climate metric (E&E News)

Biden Appeals Court Ruling on Social Cost of Carbon (World War Zero; includes VIDEO)

The Social Cost of Carbon; Destined for SCOTUS (Energy Today)

ADMIN APPEALS SCC INJUNCTION: (Politico's Morning Energy)

Feds Push For Stay Of Carbon Cost Injunction At 5th Circ. (Law360)

Appellate court rules Biden can consider climate damage in policymaking -- The U.S. Court of Appeals for the 5th Circuit stayed a Louisiana federal judge’s order blocking the federal government from calculating the cost of climate change (Washington Post)

SOCIAL COST OF CARBON LIVES ANOTHER DAY: (Politico's Morning Energy)

RED STATES ASK 5TH CIRCUIT TO BLOCK SOCIAL COST OF CARBON: (Politico's Morning Energy)

SOCIAL COST OF CARBON TO SCOTUS: (Politico's Morning Energy)

NOT DOWN WITH SCC: (Politico's Morning Energy)

The social and political cost of carbon -- COST OF CARBON CUDGEL: (Politico's Morning Energy)

ANOTHER GO AT SOCIAL COST TRANSPARENCY: (Politico's Morning Energy)

Excerpt from Politico's Morning Energy: The administration is also saying that the ruling, which was intended to curb environmental reach, will force it to once again put a pause on oil and gas lease sales. And a DOI spokesperson said Saturday the injunction would have an even deeper impact, causing a slowdown in issuing permits to drill given that the department had been incorporating the social cost of carbon into its process per a Bureau of Land Management notice in October.

This is sure to anger industry officials and Republicans, who had been irked with the department’s previous moratorium on lease sales that was ended by a federal court. The sector had also benefited from the speedy drilling permit approvals the Biden Interior Department had been issuing, which may now be threatened. It will even take time to discern whether the administration is bluffing, given that the administration plans to appeal Cain’s decision.

The administration’s move adds another level of drama to what’s become a three-way-fight between industry, the Biden administration and environmental groups' desire to end oil and gas development on public land, said Kevin Book, director of consulting firm ClearView Energy.

“The Administration halting the activities that producer states were effectively suing to expand—because the states prevailed—is a form of ‘juris-jujitsu,’” Book said in an email. READ MORE

Excerpt from World War Zero: On Saturday night, the Biden Administration filed an appeal that paused all projects where the government applied the social cost of carbon. For environmentalists, it's a win-win. While the Administration fights for the social metric in the courts, new fossil projects are put into limbo. READ MORE includes VIDEO

Excerpt from Poltico's Morning Energy: ADMIN APPEALS SCC INJUNCTION: The Biden administration on Tuesday asked the New Orleans-based U.S. Court of Appeals for the 5th Circuit to stay a district judge's injunction against the social cost of carbon. That nationwide block, the administration has said, is wreaking havoc on executive branch functions. The Justice Department had asked the Louisiana judge to stay his own injunction by Monday — and when no word came, took their request to the higher court. “Not only is the injunction overbroad—going well beyond appropriate [Administrative Procedure Act] relief—but its specific substantive provisions are illogical, unreasonable, and unlawful,” DOJ wrote. The filing asks for a decision by March 15.

The 5^th Circuit isn’t known to be particularly friendly to Biden’s agenda, but there are a few factors that might benefit the White House here. To start, the social cost of carbon has been used for over a decade, and presidents have issued orders defining how rules are analyzed since Richard Nixon. In addition, legal observers have pointed to some unusual aspects of the Louisiana judge’s order, including a novel use of the “major questions” doctrine and citation of a (non-existent) “separation of powers clause.” READ MORE

Excerpt from Politico's Morning Energy: A federal appeals court picked apart a lower court ruling Wednesday that gutted President Joe Biden’s social cost of carbon, meaning federal agencies will be able to get back to using the figure in writing rules and assessing projects.

The Biden administration set the social cost of carbon last year at $51 per ton — the same as under the Obama administration — and environmentalists hoped that number would go up following further review. But Republican states challenged the SCC’s legality, with a federal court in Louisiana siding with them and preventing the Biden administration from using the figure, which the administration warned would lead to chaos by cutting out a major variable in their assessments.

The 5th Circuit Court of Appeals found the whole GOP-led exercise specious and lifted the injunction. The judges rejected the argument that the metric could cause real, measurable harm, and dismissed the claims as “generalized grievance” against the administration. Their stay on the Louisiana decision is temporary, but the judges cast serious doubt on the red states’ case.

Louisiana Attorney General Jeff Landry will appeal the stay, his press secretary, Cory Dennis, told POLITICO in an email. "We strongly disagree with the 5th Circuit’s opinion that we lack standing in Biden’s latest attempt to inject the federal government into the everyday lives of Americans," Dennis wrote. "We will petition for a rehearing en banc and will continue to stand up against this Administration’s vast overreach." READ MORE

Excerpt from Politico's Morning Energy: RED STATES ASK 5TH CIRCUIT TO BLOCK SOCIAL COST OF CARBON: Louisiana and other red states on Wednesday asked the full 5th Circuit Court of Appeals to overturn a recent panel decision that stayed a district judge's injunction against the social cost of carbon — if you haven’t had your coffee yet, that means they asked the appellate court to once again block the administration’s use of the analytical measure. In an en banc petition filed last night, the states argued that the panel had made several errors worthy of reversal. Somewhat ironically, that includes an argument that the panel failed to give the states their due “special solicitude” in determining whether they have standing to challenge the social cost of carbon — quoting the standard set by the Supreme Court in its landmark 2007 ruling on EPA’s climate authority in Massachusetts v. EPA.

What’s next: Further briefing likely will take at least a few weeks, and it’s unclear how long the 5th Circuit may take to act. The panel that issued the stay earlier this month consisted of two Obama appointees and one from George W. Bush. But the 5th Circuit overall leans more conservative, with 12 of its members appointed by Republican presidents and five by Democrats. Still, Louisiana’s case has been criticized by some conservative legal scholars like Jonathan Adler, and it’s not clear that a majority of the court will want to overturn the panel. READ MORE

Excerpt from Politico's Morning Energy: SOCIAL COST OF CARBON TO SCOTUS: Red states vying to gut the social cost of carbon plan to take their grievances to the Supreme Court after a federal appeals court turned down their latest attempt to shoot down the metric. The 5th Circuit Court of Appeals said Thursday it would not revive a lower court’s order gutting the metric, which the administration said had caused chaos by eliminating a key variable in its environmental work.

“We are disappointed in the 5th Circuit’s decision and we will appeal to the Supreme Court,” said Cory Dennis, a spokesperson for Louisiana Attorney Jeff Landry. Read more from Alex Guillén. READ MORE

Excerpt from Politico's Morning Energy: NOT DOWN WITH SCC:Louisiana and other Republican-controlled states on Thursday asked the Supreme Court effectively to block the Biden administration's social cost of carbon metric in regulations, putting a core part of the president’s climate agenda in front of the conservative-dominated high court, reports Pro’s Alex Guillén.

The strongly worded application portrays the social cost as "the most consequential rulemaking in American history" that touches on many aspects of American life.

"And which sentence in the United States Code does the Executive Branch cite as the source of its congressional authority for any of this? Zilch," the states wrote.

It's unclear whether SCOTUS will bite given that the 5th Circuit, widely considered the most conservative appellate court, recently found that the states lacked standing because the social cost metric on its own does not represent imminent harm

The court has ordered the Biden administration to file a response by May 9 at 5 p.m. READ MORE