Appeals Court Reverses Judge’s Injunction Against Federal Social Cost Of GHG Order

by Paul Ciampoli
APPA News Director
March 29, 2022

The U.S. Appeals Court for the Fifth Circuit recently reversed a federal judge’s decision to grant a motion for a preliminary injunction filed by 10 states that had argued that they will be harmed as a result of an early 2021 Biden Administration move to set interim estimates for the social cost of greenhouse gas emissions for federal agencies to use.

Background

In April 2021, 10 states filed a complaint against the federal government seeking declaratory and injunctive relief as a result of Executive Order 13990 (EO 13990).

EO 13990 reinstated the Interagency Working Group on Social Costs of Greenhouse Gas Emissions. In addition, the Interagency Working Group (IWG) was directed to publish interim estimates for the social cost of carbon, nitrous oxide, and methane — collectively referred to as SC-GHG estimates — for agencies to use when monetizing the value of changes in greenhouse gas emissions resulting from regulations and other relevant agency actions.

The states that filed the complaint are Louisiana, Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia, and Wyoming.

A Louisiana-based federal judge agreed with the states and granted a motion for a preliminary injunction filed by the 10 states in February 2022.

In response, the federal government moved to stay the injunction pending appeal arguing, among other things, the states lack standing, their claims are not ripe, and the interim estimates are not final agency action under the Administrative Procedures Act.

Appeals Court

In conducting cost-benefit analyses, agencies consider the impact of the emissions of greenhouse gases. The impact of these emissions on various factors like health, agriculture, and sea levels, can be quantified into dollar amounts per ton of gas emitted—i.e., the SC-GHG, the appeals court noted in its March 16 opinion.

“Because we conclude the government defendants have made a strong showing that they are likely to succeed on the merits, and the balance of harms to the parties favors granting the stay, we grant the government defendants’ motion,” the appeals court said.

The appeals court said that the government defendants are likely to succeed on the merits because the states lack standing. “The Plaintiff States’ claimed injury is ‘increased regulatory burdens’ that may result from the consideration of SC-GHG, and the interim estimates specifically. This injury, however, hardly meets the standards for Article III standing because it is, at this point, merely hypothetical.”

Moreover, the appeals court said that the interim estimates on their own do nothing to the states, adding that the states’ claims “amount to a generalized grievance of how the current administration is considering SC-GHG.”

The appeals court said that the government defendants have shown they will be irreparably harmed absent a stay.

It is unclear how the states’ “qualms with the interim estimates justify halting the President’s IWG. All of this effectively stops or delays agencies in considering SC-GHG in the manner the current administration has prioritized within the bounds of applicable law,” the appeals court said.

“The preliminary injunction’s directive for the current administration to comply with prior administrations’ policies on regulatory analysis absent a specific agency action to review also appears outside the authority of the federal courts. We therefore find the government defendants are irreparably harmed absent a stay of the injunction.”