Federal District Court Enjoins Use of the “Social Cost of Carbon” • Watts Up With That?


Francis Menton

In the U.S. so far, efforts to enact legislation in Congress to “save the planet” by restricting fossil fuels and transforming our energy economy have gone almost entirely nowhere. President Obama’s big idea of “cap and trade” legislation died early in his first term and was never resurrected. President Biden’s “Green New Deal” has so far suffered a similar fate. If the Republicans retake even one house of Congress later this year, prospects for legislation on this subject may be dead for many years, if not for good.

Surely, you might think, without any legislative support from the Congress, the Executive Branch has little to no power on its own to effect a multi-trillion dollar total transformation of our energy economy. Well, you might think that, and you would have the Constitution on your side; but unfortunately for you, the current President and the bureaucracy think otherwise. In their view, “saving the planet” from you having a warm home in the winter is a moral imperative so compelling that it overrides the Constitution and demands that they have the power to make you do as they say in every respect. Only the courts stand in their way.

But meanwhile, under Biden, there is a bureaucracy-wide full court press underway to do everything they can think of to suppress use of fossil fuels. As discussed here on January 20, on his first day in office Biden issued Executive Order 13990, making it the “policy of [his] Administration” to “reduce greenhouse gases,” and directing every agency to further that policy. Such efforts are in progress throughout the federal bureaucratic behemoth, in every agency from the EPA to the Department of Energy to the SEC to the Federal Reserve to the Agriculture Department and many more.

We can all have our favorites among these dozens of lawless bureaucratic initiatives. But certainly a leading contender for the very worst of the worst is the thing going by the name of the “Social Cost of Carbon” (SCC). If you haven’t heard of it, here’s the idea: Since we all know that CO2 emissions and associated modern lifestyles are destroying the planet, therefore the bureaucracy should declare that these emissions are woefully harming us all, and place an enormous value on that harm, such value to be used in evaluating any proposed project, to be sure that going forward no major project producing or using fossil fuels can ever again be built or implemented. The SCC is not a product of any statutorily-created agency, but rather of something called the “Interagency Working Group,” or IWG, co-ordinated out of the White House.

On Friday, the Federal District Court for the Western District of Louisiana issued a preliminary injunction enjoining all use of the SCC by the federal government pending resolution of the litigation (or action by an appellate court). Here is the court’s Order, and here is the Opinion giving its reasoning. This Opinion and Order are a clear indication that the bureaucracy can no longer count on the court system as patsies to rubber stamp whatever the Left wants at the moment, no matter how ridiculous and how lawless. As of now, this is only a District Court decision, and it has a long way to go through the court system before it is beyond further challenge. But for now the Opinion and Order stand as a major roadblock to Biden Administration “green” plans.

I first dug into the Social Cost of Carbon back in June 2016, when Barack Obama was still President, and the SCC was a shiny new toy recently devised by the bureaucracy. My post had the title “Annals Of Government Fraud.” The post marveled that the bureaucracy, caught up in anti-fossil-fuel hysteria and groupthink, had somehow managed to declare fossil fuels a net negative for humanity, and indeed such a significant net negative that they would come up with a way to block any further development of fossil fuel resources. I noted that benefits of fossil fuels included: “electricity, . . . light, telecommunications, computers, smartphones, the internet, music, television and movies, refrigeration, air conditioning, tools, appliances, . . . automobiles, planes, trains, buses, ships, even motorcycles, . . . mechanized agriculture [which is] the difference between having our food supply produced by 2% of the population (as we have today) versus the 90% of the population it took to produce the food before mechanization . . . .”, etc., etc., etc. Can use of fossil fuels possibly be a net cost versus a net benefit to humanity?

On any conceivable scale of measurement, the benefits to mankind from the use of fossil fuels have to outweigh the negatives by a factor of hundreds if not thousands. The benefits so wildly exceed the costs that the whole effort to try to quantify and weigh the two can’t really even be justified.

On taking office, the Trump administration took steps to neutralize the SCC, so that not much has been heard from it for a while. But Biden’s EO 13990 caused the Obama-era version to get re-instated. The Biden people claim that they are working on further tweaks to the regulations, but meanwhile a large group of Republican-led states went ahead and commenced litigation.

With a regulatory initiative obviously intended to force a gigantic transformation of the economy without statutory basis, the Biden people defended against the Complaint using every shuck and jive and technicality known to man. The SCC rules were not “final” because the administration was still working on a few more tweaks (and then a few more, and then a few more); the state plaintiffs lacked “standing” because the harm was to citizens rather than the state itself; and so forth. The court was having none of it.

The heart of the court’s decision is its determination that the SCC falls under the Supreme Court’s “major questions doctrine,” under which the bureaucracy cannot on its own authority impose “new obligations of vast economic and political significance” unless Congress “speaks clearly.” The states had identified some 83 pending projects involving something in the range of $447 and $561 billion dollars as affected by the SCC rule. That impressed the court as easily within the concept of “major questions.” From the court’s Opinion, pages 30-31:

Plaintiff States argue that the SC-GHG Estimates implicate a matter of major importance and there is no statutory authority for the Executive branch to issue the SC-GHG Estimates. The major questions doctrine ensures that agencies do not impose new obligations of “vast ‘economic and political significance’” upon private parties and States unless Congress “speaks clearly.” . . . Plaintiff States assert that the SC-GHG Estimates will impose significant costs on the economy. The total cost of these 83 regulatory actions [using social costs] is estimated to be between $447 billion and $561 billion (in 2020 dollars).” Courts have found that less costly and far-reaching regulations have triggered the major questions doctrine.

We are at the beginning of what could be a very long battle. The bureaucracy has many ways to wear down its opponents.

Read the full article here.


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