Fifth Circuit Permits The Use Of The Social Cost Of Carbon, For Now

• Jurisdiction: United States,Federal
• Author: Ms Anne Idsal Austin and David M. McCullough
• Law Firm: Pillsbury Winthrop Shaw Pittman
• Published date: 10 May 2023

The court's decision allows the Biden administration to further develop the Social Cost of Carbon (SCC) but leaves open the possibility of future judicial scrutiny of its implementation.

TAKEAWAYS

The Fifth Circuit's ruling allows the federal agencies to factor in the costs of additional greenhouse gas (GHG) emissions when considering rules, regulations and actions.

The court's finding that plaintiffs lacked standing may change the timing of when stakeholders challenge future agency actions.

With the Biden administration poised to substantially increase the Social Cost of Carbon (SCC), businesses should closely follow federal and state regulatory developments that will likely result in more stringent GHG reduction requirements that could affect their operations and bottom lines.

On April 5, 2023, the U.S. Court of Appeals for the Fifth Circuit dismissed Louisiana's challenge to the Biden administration's interim Social Cost of Carbon (SCC) estimates, citing a lack of standing. Louisiana, along with nine other states, sought to prevent federal agencies from using the SCC in their decision-making.

While the Fifth Circuit's ruling permits the Biden administration to continue to develop the SCC, questions remain regarding the SCC's implementation, scope and permissible uses.

The Social Cost of Carbon, Explained

The SCC is an attempt by the federal government to estimate the dollar cost of each additional ton of carbon emissions associated with a specific agency action. Beginning...