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Biden’s Greenhouse Gas Climate-Cost Rules Restored, for Now (2)

March 17, 2022, 3:07 PM

States and companies can’t keep using Trump-era formulas to estimate the social cost of greenhouse gas emissions for future energy and infrastructure projects while they fight over Biden administration calculations that are roughly twice as costly.

The federal appeals court in New Orleans on Wednesday granted the White House’s request to temporarily let federal agencies use Biden’s new cost-benefit analysis rules, which aim to slow climate change by making activities that emit greenhouse gases sharply more expensive.

“The interim estimates on their own do nothing to the plaintiff states,” a three-judge panel of the court wrote in a unanimous decision. “The plaintiffs states’ claims therefore amount to a generalized grievance of how the current administration is considering” the social costs of greenhouse gases.

Regulations covering emissions of carbon dioxide, nitrous oxide and methane affect a broad swath of economic activity, sweeping in such disparate generators as agricultural processes, petrochemical plants and government royalties from oil, gas and coal production. “Monetizing the value of changes in greenhouse gas emissions resulting from agency actions,” as the government calls it, is an integral part of the federal regulatory process, as esoteric as it may seem.

Read More: Biden’s Climate Agenda Takes Hit After Judge Halts Carbon Price

A group of 10 energy-producing states, with the support of a raft of industry trade groups, claimed in their legal challenge that Biden’s formulas would cost the U.S. economy “hundreds of billions or trillions of dollars” and “may be the most significant regulatory encroachment upon individual liberty and state sovereignty in American history.” They argued that the increased regulatory burden would drive up the cost of electricity and prices for food, fuels and manufactured goods.

The states persuaded a Louisiana-based judge appointed by former president Donald Trump to block federal agencies from relying on Biden’s interim estimate formulas. U.S. District Judge James D. Cain Jr. ruled that Biden likely usurped congressional authority and skipped federal rule-making steps when he restored Obama-era greenhouse gas estimation formulas that Trump had gutted.

Biden contends his revamped formulas, which price in higher global costs for greenhouse gas emissions as much as 300 years out into the future, are necessary to combat catastrophic climate change. U.S. regulators typically aren’t allowed to consider global benefits when estimating economic costs to be borne by taxpayers.

Justice Department lawyers urged both Cain and the appellate court to let regulators use the overhauled interim estimates because suspending the formulas would potentially derail environmental reviews for as many as 60 major infrastructure projects. The Interior Department has already delayed oil and gas leasing activities on public lands as a result of Cain’s injunction.

Two of the three judges on the appeals court panel were appointed by Democratic presidents, while the third was appointed by a Republican.

Louisiana said it would seek a hearing by the full appellate court, which is dominated by conservatives.

“We strongly disagree with the 5th Circuit’s opinion that we lack standing in Biden’s latest attempt to inject the federal government into the everyday lives of Americans,” Cory Dennis, a spokesperson for the state attorney general’s office, said in a statement. Dennis said the AG’s office would “continue to stand up against this administration’s vast overreach.”

The office of the Texas attorney general didn’t immediately respond to a request for comment on the ruling.

The case is Louisiana v. Biden, 22-30087, U.S. Court of Appeals for the Fifth Circuit (New Orleans).

(Adds comment by Louisiana attorney general’s office near bottom.)

--With assistance from Jennifer A. Dlouhy.

To contact the reporter on this story:
Laurel Calkins in Orwell, Vermont at laurel@calkins.us.com

To contact the editors responsible for this story:
Katia Porzecanski at kporzecansk1@bloomberg.net

Peter Blumberg, Peter Jeffrey

© 2022 Bloomberg L.P. All rights reserved. Used with permission.