The Independent View: Supreme Court Declines To Block Biden Policy On Social Costs Of Greenhouse Gases

The Supreme Court on Thursday, Rejected a plea from Louisiana and Nine other States, to bar Federal Agencies from considering the Social Costs of Greenhouse Gases, as part of their decision-making process. In a brief, unsigned Order, the Justices declined to Reinstate a District-Court Ruling that had temporarily blocked the Biden Administration from using the Cost Estimates.

The Dispute in which the Justices declined to intervene began last year, after President Biden, on his first day in Office, signed an Executive Order that revived an Agency, formed during the Obama Administration, but Disbanded during the Trump Administration, known as the Interagency Working Group on the Social Cost of Greenhouse Gases. The Executive Order gave the Working Group the power to issue Estimates on the “social costs” of Greenhouse Gases and required Federal Agencies to include these Estimates in each Cost-Benefit analysis for New Regulations. The Working group issued Interim estimates in February 2021.

States with Republican Governors or Attorneys General challenged the Policy. They called the Order and the Estimates a “power grab designed to manipulate America’s entire federal regulatory apparatus through speculative costs and benefits so that the Administration can impose its preferred policy outcomes on every sector of the American economy.” A Federal District Court in Louisiana, Temporarily Blocked the Biden Administration from using the Estimates as part of its Regulatory Decision-making Process while Litigation continues.

The Administration appealed to the conservative U.S. Court of Appeals for the 5th Circuit, which put the District Court’s Order on hold, clearing the way for the Administration to use the Estimates.

The States came to the Supreme Court on April 27th, asking the Justices to Reinstate the District Court’s Order barring Federal Agencies from using the Interim Estimates. The States argued that the use of the Estimates would affect “everything in modern life,” allowing the Federal Government to justify everything from killing cows (which emit methane) to stopping road projects (because of the impact of concrete and traffic on greenhouse gases). The estimates would also, the states contended, “impose crippling new hidden costs” – as much as $447 billion to $561 billion – “across all sectors of the American economy,” without any Authorization from Congress.

Given the Costs that would flow from using the New Estimates, the States continued, the estimates also violate the “major questions” doctrine – the idea that if Congress wants to give an administrative agency the power to make “decisions of vast economic and political significance,” it must say so clearly. Here, the states alleged, “Congress has not spoken on this issue at all.”

In a filing by U.S. Solicitor General Elizabeth Prelogar, the Biden Administration stressed that although Federal Agencies have long considered the social costs of Greenhouse Gases as part of their Cost-Benefit analyses, Biden’s January 2021 order does not “categorically require an agency to monetize costs and benefits in the first place.” Instead, Prelogar explained, the executive order “provides only that, if the agency does so, it generally must use the values provided by the Working Group rather than some other set of values.”

Prelogar told the Justices that the States’ challenge is premature. There is, she wrote, no way to know at this point whether, even if states are injured by future regulations, that injury could be attributed to the executive order or the interim estimates.

Prelogar argued that the Executive Order is consistent with the President’s authority under the Constitution, which gives him the power to “supervise how subordinate officers in the Executive Branch carry out their responsibilities, including analyzing costs and benefits in compliance with an earlier Executive Order.” As a result, she noted, the “major questions” doctrine does not apply here at all, because the executive order does not rely on authorization from Congress.

But even if the states were otherwise correct, she continued, the district court’s order was too broad, because it would bar agencies from using the estimates and analyses in any way – even if the district court had not found that their use would violate the law. And there was no emergency requiring the Supreme Court to intervene now, she added. Although the interim estimates have been in place since February 2021, the states only asked the district court to block their use five months later, in July 2021 – suggesting that there is no real urgency. Moreover, she continued, the court of appeals is acting quickly to decide the case on the merits.