Metric sales

Climate action decision threatens political delays and creates ‘chaos’

A February court order stifling the agency’s use of a key carbon cost metric has thrown federal climate action into a state of uncertainty, legal experts say.

Use of the Biden administration’s draft social cost of carbon estimate — used by agencies to calculate the monetary costs of the impacts of burning greenhouse gases — was banned by a Louisiana court this month. this, a victory for Louisiana, Texas and eight other states that disputed the estimates.

The injunction is unlikely to withstand further court scrutiny, the lawyers said. But if the restriction stays in place, it will have an “extraordinary effect”, according to Holland & Hart LLP partner Emily Schilling.

“I’ve never seen an order that has the magnitude of impact that this order has had, it covers all agencies,” she told Bloomberg Law.

Start from nothing

Agencies seeking to craft regulations will now have to start from scratch in their analyzes if the order is not overturned on appeal, exacerbating an already slow timetable on critical climate policy.

Agencies will have to “take a closer and closer look at all the best relevant information an agency can gather, which means rulemaking, oil and gas permits, leases, highway planning, auto regulations, everything,” according to the Georgetown law professor. William Buzbee.

These delays were confirmed in a brief filed Feb. 19 by Dominic Mancini, acting chief of the Office of Information and Regulatory Affairs.

“Agencies would be required to redirect resources to revise previously drafted proposed rules, regulatory impact analyzes and other analyzes in support of other agency actions,” the brief notes.

“Created chaos”

The federal government wants to stay the decision while an appeal is pending in the United States Court of Appeals for the Fifth Circuit, seeking a temporary freezing order by the end of the month.

“By saying, in effect, that all environmental decisions by the federal government for a decade or more are wrong and should be reversed, the Louisiana court’s ill-reasoned and sweeping decision has created chaos,” said John Leshy, professor in law at the University of California Hastings College of the Law, who served as an insider in the Clinton administration.

President Joe Biden directed the agencies in a January 2021 executive order to use estimates developed by an interagency task force in regulatory analyses, a move quickly challenged by several Louisiana-led states.

The states claimed the order violated the Administrative Procedure Act and the Separation of Powers Act, citing language in the order that agencies will “use” the interim fee. The U.S. District Court for the Western District of Louisiana sided with the states and dropped the use of the metric on February 11.

Aviation Policy Uncertainty

Groups have already started to intervene to take advantage of the void left by the order.

The Competitive Enterprise Institute urged the EPA on Feb. 15 to initiate a review of Biden’s new vehicle emissions standards, which relied on the social cost of carbon in its analysis.

The timing of much-awaited carbon limits for power plants could also take a hit, in addition to a major battle in the US Supreme Court over the scope of the EPA’s regulatory power.

“At the end of the day, the substance of any regulations wouldn’t necessarily be affected, but the rationale certainly would be, and that’s a big thing for this administration, if they’re going to cut greenhouse gas emissions hard from existing power plants,” Schilling said.

Interior rental takes a hit

The preliminary injunction creates numerous conflicting mandates for the Interior Department and forces the agency to abandon environmental scans and regulations and start over, according to Mancini’s statement.

Mancini’s statement says the department’s Office of Land Management has halted work on oil and gas leases and permits on federal lands.

Interior Department spokeswoman Melissa Schwartz declined to answer specific questions this week, referring only to an earlier statement that she is committed to considering the climate impacts of her programs.

The agency is taking advantage of the injunction to support its goal of slow-moving oil and gas leasing, said Scott H. Segal, partner at Bracewell LLP. The land office last week missed its deadline to announce a first-quarter lease sale, which the agency promised to hold following an earlier court ruling to end the oil lease hiatus. and gas from the White House.

“There’s an irony in that that they would say, ‘My God, if we ever decide to do a lot more leases on federal lands, that would slow us down,’ and at the same time they’re telling progressive congressional constituencies and elsewhere that they don’t. I don’t plan to do a lot of rentals,” Segal said.

Stopping the land office from working on oil and gas leases and permits is one of the most visible effects of the injunction, but the office’s work on other energy-related rules is also doubted.

The bureau uses the social cost of carbon to determine the global impact of methane leaks as part of its proposed waste prevention rule for leaks from oil and gas operations on federal lands.

The preliminary injunction may also prevent federal agencies from using the best available science — which includes the social cost of carbon — in its environmental analyses, forcing it to revise its environmental reviews of oil and gas lease sales, Mancini wrote. .

Federal scientists who comply with the injunction may violate scientific integrity policies that require the use of the best available scientific information, he wrote.

Next steps

Given the impacts, the Fifth Circuit could take the case fairly quickly and overturn the decision based on the court’s “unusual position” on executive authority as a potential ground, Schilling said.

The court’s decision “appears to be a rather aggressive use of an injunction,” as the judge in the case “stretched” the standard of evidence the court would normally need to justify granting an injunction, said Segal.

Many laws, including the Clean Air Act, also specify which courts can weigh in on such sweeping decisions, Buzbee noted.

“Many laws specify that major regulatory actions must be reviewed in the DC circuit,” Buzbee said. “There’s even a provision in the Clean Air Act that people have to basically, very specifically, make certain cases to the agency before they can go to court.”

It’s hard to see how a court could legally deny the federal government the right to decide how to assess the environmental impacts of its proposals, said Mark Squillace, professor of natural resources law at the University of Colorado-Boulder.

An estimate of the social cost of carbon does not dictate certain outcomes but “simply provides information that might be needed and that the agency might find relevant in reaching a reasoned decision,” he said.

The case is Louisiana v. Biden, 5th Cir., No. 22-30087, 2/23/22.