June 6, 2022

Supreme Court Refuses To Hear Case Challenging How Benefits Of Federal Regulations Are Calculated

On May 26, the U.S. Supreme Court denied an emergency application by ten states to block federal agencies from using the social cost of carbon metric while Fifth Circuit Court of Appeals hears a case challenging the calculation. The single-sentence order contained no explanation or dissent.

As a reminder, the social cost of carbon is the estimated cost to society of releasing one ton of carbon dioxide into the atmosphere. Under the Biden administration, the calculation has played a significant role in how federal regulators weigh the costs and benefits of proposed regulations. Indeed, one of President Joe Biden’s first acts in office was to establish a cross-governmental team to calculate the social cost of carbon.

In February 2022, a Louisiana district court preliminarily enjoined the Biden administration from using the social cost of carbon in its decision-making. After the government appealed the ruling, the Fifth Circuit suspended the district court’s ruling, agreeing with the administration that the ruling was likely to complicate and delay federal environmental rulemaking.

The ten states had asked that the Supreme Court lift the stay and allow the lower court’s ruling to take effect. They called the government’s efforts to estimate the societal costs of greenhouse gas emissions, “the most consequential rulemaking in American history.”

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