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Appellate court rules Biden can consider climate damage in policymaking

The U.S. Court of Appeals for the 5th Circuit stayed a Louisiana federal judge’s order blocking the federal government from calculating the cost of climate change

The Galveston Island Historic Pleasure Pier in Galveston, Tex., on Feb. 16. An appeals court ruled Wednesday that the federal government can factor in the societal costs of climate change, including sea-level rise across the country, when crafting policies. (Brandon Bell/Getty Images)
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An appeals court on Wednesday lifted a ban blocking the federal government from factoring damage from rising greenhouse gas emissions into its decisions, offering a temporary reprieve for President Biden’s plans to tackle climate change.

The ruling by the U.S. Court of Appeals for the 5th Circuit stayed an order issued last month by a U.S. District Court judge in Louisiana that prevented agencies from considering the harm climate change causes, known as the “social cost of carbon.” This figure is used across the federal government in rulemaking, from issuing new drilling permits to assessing the growing potential for damage such as crop losses and flood risks.

The decision means that, at least until there’s a ruling on the case’s merits, the Biden administration can continue to consider the economic cost of climate change as it writes new rules, and strengthen existing ones, that could inch the country closer to Biden’s goal of cutting emissions in half by the end of the decade compared with 2005 levels. With sweeping climate legislation stalled in Congress, the administration is counting on these regulations to meet its emissions reduction targets.

The ruling also raises questions about whether Biden officials will restart federal oil and gas leasing, which they paused after Judge James Cain blocked the government from considering the real-world cost of climate change. Last month, the Interior Department delayed decisions on new drilling, including a large lease sale of more than 170,000 acres in Wyoming that had been planned for this spring.

An Interior Department spokesperson said officials are reviewing the decision.

Here's what Biden is doing to tackle climate change

In its decision, the unanimous three-judge panel wrote that the government was likely to prevail in the end because the suing states could not show they had been harmed and so lacked standing to bring the case.

“The Plaintiff States’ claimed injury is ‘increased regulatory burdens’ that may result from the consideration of [the social cost of carbon],” the court wrote. Yet the judges found the states’ concerns “merely hypothetical.”

“The Interim Estimates on their own do nothing to the Plaintiff States,” they wrote.

Under President Barack Obama, the government estimated that each ton of carbon dioxide released into the atmosphere would cause $37 in societal damages. The Trump administration lowered that number significantly, concluding that the risks from burning fossil fuels amounted to between $1 and $7 per ton. When Biden became president, he restored the Obama-era cost calculation, adjusting it for inflation and setting it at $51.

A group of Republican-led states sued, arguing that Biden did not have the authority to change the value of climate change risks without soliciting public input. They also said that by altering the cost-benefit analysis, the president had dealt a blow to their states’ economies, which depend heavily on the extraction of oil, gas and coal.

Cain agreed with the states, writing in his order that the change would harm their “ability to purchase affordable energy.” His injunction barred the Biden administration from using the higher estimate, leaving the government with the only the lower cost figure imposed by the Trump administration.

Here, the appellate court found that Cain went too far. The judges wrote that ordering the Biden administration to comply with Trump-era policies on regulatory analysis, absent a specific agency action, “appears outside the authority of the federal courts.”

Cain’s preliminary injunction ground much of the administration’s climate rulemaking process to a halt.

According to the Office of Information and Regulatory Affairs, the White House office that reviews agency rules, 38 regulations across four different agencies were identified as needing to be postponed or rewritten if the temporary ban stayed in place. The Transportation Department said 60 of its final decisions or environmental impact analyses would be affected.

Environmentalists hailed Wednesday’s ruling.

“Today’s decision by the 5th Circuit sent a strong message that the rule of law cannot be short-circuited to score political victories,” Hana Vizcarra, an attorney for the environmental law firm Earthjustice, said in an email. “It puts the government back on track to address and assess climate change.”

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