April 05, 2023 By Seth D. Jaffe
Categories: Climate Change , Regulation , Litigation , Guidance , Cost-Benefit Analysis
Today, the 5th Circuit Court of Appeals dismissed for lack of standing claims by a number of states challenging the Biden Administration's Interim Estimates of the Social Cost of Carbon. The Court had telegraphed this outcome last spring when it vacated a District Court injunction against use of the Interim Estimates, noting that:
The Government Defendants are likely to succeed on the merits because the Plaintiff States lack standing.
Indeed. The Court's opinion today basically just fleshes out last year’s simple statement.
Plaintiffs' allegations of “injury in fact” rely on a chain of hypotheticals: federal agencies may (or may not) premise their actions on the Interim Estimates in a manner that may (or may not) burden the States. Such injuries do not flow from the Interim Estimates but instead from potential future regulations, i.e., final rules that are subject to their own legislated avenues of scrutiny, dialogue, and judicial review on an appropriately developed record.
As I noted last spring, the “fun” begins when an agency promulgates a regulation based at least in part on the Interim Estimates (or a final SCC, once promulgated). Interestingly, that case arguably is already pending before the District of Columbia Court of Appeals, in Texas v. EPA, which challenges EPA's most recent motor vehicle emissions standards. The plaintiff states in that case argue that EPA's misplaced reliance on the Interim Estimates wildly skewed EPA's cost-benefit analysis in support of the rule.
And, wouldn't you know it, EPA's first argument in defense of the states' claims is that the states don't have standing. As the 5th Circuit noted in yesterday's decision, “A panoply of reasons can underlie a regulation, and agencies are required to dictate and publicly report such reasons.” And EPA is free to argue, perhaps successfully, perhaps not, that whatever injuries Texas may have suffered as a result of the motor vehicle emissions standards were not caused by the Interim Estimates.
It’s also worth noting that the panel in yesterday's decision included two Republican appointees, one appointed by President Trump. After all, all sorts of folks, of varying political persuasions, have occasion to challenge federal regulations of various kinds.
Those applauding today’s decision might do well to remember that what is sauce for the gander is also sauce for the goose.
