The Supreme Court will allow the Biden administration to continue to use a metric that estimates the real-world cost of the climate crisis while legal challenges play out. The court’s order is a loss for Republican-led states that argued in part that the estimates were “speculative.”
The justices issued a one-line order and there were no noted dissents.
The metric, known as “the social cost of carbon,” uses economic models to assign a cost to planet-warming carbon dioxide emissions to help quantify the economic harm caused by the climate crisis, including sea level rise, more destructive hurricanes, extreme wildfire seasons and flooding.
It is used in federal rules that regulate carbon emissions, or in decisions from the Department of Interior around oil and gas drilling on federal lands.
In 2009, the White House Office of Management and Budget convened the Interagency Working Group on Social Cost of Carbon. The agency reviewed scientific and economic literature to develop standardized estimate for the societal cost of greenhouse gases, and recommended that federal agencies use those estimates. President Donald Trump dismantled the working group, which was later reestablished by President Joe Biden. Under Biden the working group published interim estimates.
“We are of course very pleased with the Supreme Court’s order,” a spokesperson for the OMB said in a statement. “Properly accounting for the harms caused by greenhouse gas emissions is critical to our work to reduce energy costs and protect Americans from the growing impacts of climate change, which is already costing American communities and businesses billions of dollars in mitigation and response.”
The Republican states – led by Louisiana – had argued that while the “stated purpose” of the estimates is to “try to approximate global harms to society from greenhouse gas emissions attendant to objects of regulated activities,” they are really a “power grab” designed to “manipulate America’s entire federal regulatory apparatus through speculative costs and benefits so that the Administration can impose its preferred policy outcomes on every sector of the American economy.”
“By design,” Louisiana Attorney General Jeff Landry said, the estimates, “drive up the cost side of every regulatory action even touching greenhouse gas emissions.”
US District Judge James Cain of the Western District of Louisiana blocked the use of the estimates last February while the legal challenges played out. He said the estimates likely violate the Administrative Procedure Act, a law that governs the process by which federal agencies develop and issue regulations.
His ruling had the effect of freezing any federal work and rulemaking using the social cost of carbon metric. For instance, oil and gas leases being considered by the Interior Department were delayed.
A federal appeals court, in March, put that district court order on hold, allowing the use of the estimates and holding that the states lacked the legal right to bring the challenge because the estimates did not directly impose regulatory burdens on the states behind the challenge.
Afterward, the states asked the justices to wipe away the appeals court stay while the legal challenges play out. The justices declined to do so.
“If this Court does not vacate the Fifth Circuit’s stay order, the Executive Branch will continue using this made-up, nonstatutory metric to arbitrarily tip the scales toward its preferred policy outcome for every activity the federal government touches,” they said.
The Biden administration asked the justices not to intervene. In court papers, Solicitor General Elizabeth Prelogar said that the states are barred from challenging the estimates now because they are so far “unconnected to any concrete final agency action.”
“If and when an agency relies on those estimates in issuing a rule or taking other reviewable action that injures the applicants, they may challenge that particular final agency action,” Prelogar told the justices in court papers.
She added that Biden “acted well within his constitutional authority in directing agencies to use the interim estimates when appropriate and consistent with applicable law.”
On his first day in office, Biden set the metric back at $51 per ton of carbon dioxide emissions – the same level set as the Obama administration.
This story has been updated with additional information.