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Biden’s Win on Carbon Costs Temporarily Dodges Rulemaking Bullet

May 26, 2022, 9:32 PM

A Supreme Court decision reviving a key interim carbon metric provides some relief from uncertainty while the Biden administration moves forward with new climate rules—but lower court hurdles still lie ahead, according to legal experts.

Justices on Thursday, without explanation or dissent, moved to restore the administration’s use of a social cost of carbon figure within rulemaking cost-benefit analyses. The decision scraps Republican states’ bid to halt the estimate’s use, while broader litigation moves forward in other courts.

“The Supreme Court’s decision today not to reinstate an injunction on the use of that science—an injunction that was the result of a profoundly flawed decision by a lower court—allows the Biden administration to rely on the best available science and economics to address the climate crisis,” Rosalie Winn, the Environmental Defense Fund’s methane and clean air director, said in a statement.

The U.S. District Court for the District of Louisiana chose to halt the metric in February through preliminary injunction, but the U.S. Fifth Circuit Court of Appeals froze that order—action the Supreme Court on Thursday declined to overturn.

There is still a chance that lower courts could thwart the metric’s use as litigation presses forward, Center for Progressive Reform senior analyst James Goodwin told Bloomberg Law. But a “huge bullet” against a “dangerous” precedent on regulatory procedure was dodged, at least for now, he said.

“The proposition of the lower court decision was that judges should have pretty free rein to interfere in agency science,” Goodwin said. “That was sort of the blueprint that that decision set up, and that got scrapped with this decision today, at least temporarily.”

Ongoing Battle

Thursday’s decision “removes a cloud of uncertainty” over the Biden administration’s continuing rulemaking, according to Georgetown University Law Center professor William Buzbee.

“The district court’s action was so unprecedentedly broad, and on such weak legal footing, that it is unlikely to stand when assessed by the court of appeals,” Buzbee said of the continuing litigation.

Critics of the litigation see the lawsuits—filed by Texas and nine other states in Louisiana and Missouri district courts—as both premature and baseless, especially since the contested metrics were only temporary placeholders while the administration crafted final numbers.

Advocates worry that an adverse court decision against the metric will stymie an administration already strapped on options to mitigate emissions thanks to a stalemated Congress and Supreme Court poised to hem Clean Air Act authority in West Virginia V. EPA.

The Justice Department filed an appeal of the Louisiana district court decision, which is currently pending at the Fifth Circuit.

“No news is good news, in a way,” University of California Berkeley professor Dan Farber said. “If the Court had granted the request to reinstate the district court’s stay, or even if any Justices wrote to support that opinion, it would have been a worrisome sign of judicial activism.”

The case is Louisiana v. Biden, U.S., No. 21A658, Order 5/26/22

To contact the reporter on this story: Jennifer Hijazi in Washington at jhijazi@bloombergindustry.com

To contact the editor responsible for this story: Zachary Sherwood at zsherwood@bloombergindustry.com