The federal government uses the estimate in all sorts of regulations, including new drilling permits and assessing the costs of crop loss and flood risk.
The Estimates is a kind of political football. After the Trump administration lowered the cost estimate from that established in the Obama administration, President Biden’s administration increased it. Republican-run states went to court.
A federal district judge in Louisiana ruled for the states and said the estimates could not be used. But a panel of the United States Court of Appeals for the 5th Circuit disagreed and stayed the judge’s order. The Supreme Court’s action on Thursday keeps that decision in place.
Appeals court rules on Biden administration in climate change lawsuit
The Louisiana lawyers called the estimates a “power grab designed to manipulate the entire US federal regulatory apparatus through speculative costs and benefits so that the administration can impose its preferred policy outcomes on all sectors of the American economy”.
But the Biden administration responded that they had been used for years. He told the Supreme Court that the district judge’s decision was wrong but also premature. States should not be allowed to sue before an agency even implements a rule using the new cost estimates, Solicitor General Elizabeth B. Prelogar wrote, because they were not harmed.
Beyond that, the district judge’s order was delaying the government’s work, she said. “The sweeping injunction from the District Court threatens to cause irreparable harm to the entire executive branch,” she wrote. “While in effect, the injunction delayed or stopped work involving rules, grants, leases, permits and other projects. Even some internal discussions were halted to avoid violating the prohibition of the injunction to “rely on” the provisional estimates “in any way whatsoever”.
As is common in emergency orders, the Supreme Court gave no reason to deny Louisiana’s request.
The order means the Biden administration can continue to consider the economic cost of climate change as it writes new rules and strengthens existing ones.
For the administration, calculating the true cost of climate change — and factoring that cost into its leasing decisions and infrastructure projects — is a crucial tool in meeting its emissions reduction goals.
With sweeping climate legislation stalled in Congress and an upcoming Supreme Court ruling threatening the Environmental Protection Agency’s ability to regulate greenhouse gas emissions, the social cost of carbon has become a key way for the federal government to develop tougher environmental rules.
The cost that the government attributes to the damage caused by global warming has changed over time. Under President Barack Obama, the government estimated that every ton of carbon dioxide released into the atmosphere would cause $37 in damage to society.
The Trump administration has argued that the cost should be significantly lower, concluding that the risks of burning fossil fuels are between $1 and $7 per ton. This shift made it easier for Trump officials to defend weakening environmental protections, as they could argue that carbon pollution would hardly affect the economy.
When Biden became president, he restored the Obama-era costing, adjusting it for inflation and setting it at $51. However, this approach is temporary. In an executive order issued last year, Biden tasked an interagency task force with updating the government’s cost-benefit analysis, incorporating the latest scientific research.
The case is Louisiana vs. Biden.