A three-judge panel of the Fifth Circuit removed an injunction by Louisiana Judge David Cain Jr. preventing the administration of President Joe Biden from using a metric of climate costs to help federal agencies calculate costs and benefits of regulations. The case didn’t rule on the merits of the case, although the panel offered an analysis of why it believes the government will prevail on the merits. It only removed the stay while the case proceeds.
The plaintiffs were 13 energy-producing states, led by the office of Louisiana Attorney General and former member of Congress Jeff Landry. Wyoming filed a separate lawsuit over the same issue. According to one attorney, the plaintiffs have already asked for a review of the decision by the full Fifth Circuit.
The “social cost of carbon” metric is produced by the Interagency Working Group, which worked under the Obama administration to assign a number to carbon emissions impacts. It calculated the SCC at $51 per ton of carbon emitted. The Trump administration disbanded the IWG and scrapped that number, instead coming up with a much lower number.
Defenders of the carbon metric say it is a tool agencies can use in calculating costs and benefits of regulations and argue that it is not binding on any agency. The Fifth Circuit panel ruled that because the plantiffs were not responding to any final agency action, but only speculating about possible future impacts of regulations using the SCC, they had not shown any harm and the issue was not ripe for adjudicating.
The Biden administration had halted oil and gas leases while it waited for the panel’s decision on Judge Cain’s stay, arguing that suspension of the climate metric meant it could not move forward with anything that had a climate impact.
If ultimately upheld, the case against the social cost of carbon metric could strike a serious blow at Biden’s efforts to make the United States “carbon net zero” by 2050. One of these efforts was recently announced by Secretary of Agriculture Tom Vilsack: a plan to use $1 billion from the Commodity Credit Corporation to encourage “climate smart” ag practices, which would presumably require an agreed-upon measurement of carbon impacts to calculate incentives.
Judge Cain’s injunction enjoined federal agencies, including the U.S. Environmental Protection Agency, U.S. Department of Energy, U.S. Department of Transportation, U.S. Department of Agriculture, U.S. Department of Interior, National Highway Traffic Safety Administration, and the Interagency Working Group on Social Cost of Greenhouse Gases itself, from using the SCC metric.
Social cost of carbon
An SCC metric uses mathematical models to estimate various damages and costs of emissions of carbon dioxide, methane and nitrous oxide. The models can include a wide variety of posited environmental and health effects. According to a White House statement, “One specific tool–called the ‘social cost of greenhouse gases’–combines climate science and economics to help federal agencies and the public understand the benefits of reducing greenhouse gas emissions. The metric is a range of estimates, in dollars, of the long-term damage done by one ton of greenhouse gas emissions.”
To arrive at the cost figure, the IWG uses integrated assessment models, which use “highly aggregated representations of climate processes and the global economy combined into a single modeling framework.” Federal agencies began using carbon cost metrics in 2008 after a judge in the Ninth Circuit Court of Appeals ordered the Department of Transportation to estimate the social cost of emissions when setting fuel economy standards for cars. Climate activists had already been saying that “pricing carbon” was necessary to fight climate change.
Global effects
The Fifth Circuit lifting of the stay did not answer certain key questions in the controversy over SCC. A key point in the complaint by the attorneys general was that the Biden carbon cost estimate, which restored the Obama carbon price of $51 a ton, considered global effects of carbon emissions instead of just effects within the U.S.
David Murray can be reached at [email protected].
