On Thursday, the Supreme Court of the United States issued an order in Louisiana, et al. v. Biden denying an emergency application to block the use of “the social cost of carbon” to take account of the cost of greenhouse gas emissions in regulatory actions.
The emergency application was submitted by Louisiana, Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia and Wyoming to challenge Executive Order 13990 which created the Interagency Working Group on the Social Cost of Greenhouse Gas (IWG). The IWG was originally created by the Obama administration to review scientific and economic literature to develop standardized estimates for the societal cost of greenhouse gasses. In 2010, the IWG announced a framework for assessing the costs of greenhouse gas emissions which accounted for “the social cost of carbon.”
The Trump administration later disbanded the IWG, and the Biden administration revived it with Executive Order 13990 on January 20, 2021. After the IWG published interim estimates of the monetized damages associated with incremental increases in greenhouse gas emissions that were identical to those in place when Trump disbanded the IWG, the applicants sued the Biden administration.
The states argued that the IWG’s actions had not been authorized by Congress and violated the Administrative Procedure Act. The Western District of Louisiana agreed with the states and issued a preliminary injunction prohibiting the federal government from using IWG’s estimates. However, the Fifth Circuit stayed the district court’s injunction while the Biden administration appealed the district court’s decision.
In the Fifth Circuit opinion, the three-judge panel unanimously held that the states were likely to lose the case because they do not challenge any specific regulation or agency action, and “the interim estimates on their own do nothing to the plaintiff states.” Additionally, Louisiana requested that the Fifth Circuit re-hear the case, which was denied with the court stating that no judge had requested a vote on the matter.
Subsequently, Louisiana urged the Supreme Court to step in with its application to vacate the Fifth Circuit stay presented to Justice Alito. In the application, the states argued that the estimates “are a power grab designed to manipulate America’s entire federal regulatory apparatus through speculative costs and benefits” so the Biden administration “can impose its preferred policy outcomes.”
The Supreme Court through Justice Alito denied the states’ application in a one-sentence order and therefore has allowed the federal government and the Biden administration to continue to account for “the social cost of carbon” in regulatory decisions.
