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Court ruling on social cost of carbon throws a wrench into Biden's climate plans

The Climate 202

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Good morning and welcome to The Climate 202! We hope you had a good long weekend. 

Our colleague Anna Phillips, a national environmental reporter at The Washington Post, helped report the top of the newsletter today:

Court ruling on social cost of carbon throws a wrench into Biden's climate plans

A recent court ruling that bars the Biden administration from accounting for the real-world costs of climate change has created temporary chaos at federal agencies, upending everything from planned oil and gas lease sales to infrastructure spending, Maxine reports.

The Feb. 11 decision by a Louisiana federal judge blocked the Biden administration from using a higher social cost of carbon, a key metric that assigns a dollar value to the harm caused by one ton of greenhouse gas emissions. The metric is used in a range of decisions affecting fossil fuel extraction on public lands, infrastructure projects and even international climate talks.

The Justice Department said it intends to appeal the Louisiana judge's preliminary injunction. But in the meantime, the ruling could set off a scramble at federal agencies to redo their analyses of major decisions that relied on the higher social cost of carbon, a top Biden administration official warned in a brief filed Saturday.

“The cumulative burden of the Preliminary Injunction is quite significant,” wrote Dominic J. Mancini, deputy administrator of the Office of Information and Regulatory Affairs of the Office of Management and Budget. “Regulatory impact analyses and analyses in support of other agency actions are often very complex and time-intensive studies that agencies can spend months developing and refining.”

Mancini noted that the Energy Department had identified 21 rulemakings that would be affected by the ruling, while the Environmental Protection Agency had identified five and the Interior Department had pinpointed three. In addition, he said, Transportation Department officials had expressed concern about the potential for months-long delays to a grant program for rail and transit projects.

The backstory

The social cost of carbon can be a wonky, confusing issue. To better understand the key climate metric, it's worth reviewing its recent history.

  • Under Barack Obama, the social cost of carbon was increased to $51 per ton, reflecting a greater emphasis on the harms that greenhouse gas pollution causes to present and future generations.
  • But under Donald Trump, the figure fell to as low as $1 per ton, reflecting almost no consideration of those climate damages in the analyses underpinning federal decisions.
  • Soon after taking office, President Biden issued an executive order that tasked an interagency working group with revising the social cost of carbon. The working group last year endorsed an interim number of $51 per ton. The final number could be as high as $125 per ton.
  • But a coalition of 10 Republican attorneys general sued over the executive order, arguing that Biden lacked the authority to raise the key climate metric without congressional approval. The Louisiana federal judge, a Trump appointee, agreed with the red states in his ruling.
Unintended consequences

The Republican-led states had argued in their lawsuit that the higher social cost of carbon would hamper fossil fuel production on federal lands. But in an ironic and largely unforeseen development, the ruling is having that effect instead.

  • Before the ruling, the Interior Department had planned to auction off 179,001 acres of public lands in Wyoming to oil and gas drilling.
  • However, officials had used the higher interim social cost of carbon in the environmental analysis underpinning the auction. As a result, Interior last week missed the statutory deadline to announce the sales in the first quarter of this year, prompting criticism from Republicans and industry groups.

“Even in the face of a global energy crisis, historic inflation and skyrocketing gasoline prices, the Biden administration continues to crush U.S. energy production,” Sen. John Barrasso (Wyo.), the top Republican on the Energy and Natural Resources Committee, said in a statement.

Kevin O’Scannlain, vice president of upstream policy at the American Petroleum Institute, said in an email that Interior's lapse in leasing announcements “not only violates its statutory obligations, but also complicates efforts to address rising energy costs and ensure our European allies have a stable supply of energy.”

Jesse Prentice-Dunn, policy director at the Center for Western Priorities, an environmental group, said the Louisiana judge’s ruling put Interior in an impossible position when it comes to oil and gas lease sales.

If Interior held a lease sale based on the current environmental analysis, Prentice-Dunn said, it could get struck down in court for relying on the higher interim social cost of carbon. But if the department held a lease sale based on a new environmental analysis without the metric, it could get invalidated for failing to consider the climate effects of drilling on public lands.

“Right now the Interior Department is facing a legal minefield,” he said. “It’s kind of d---ed if you do, d---ed if you don’t.”

International climate

Germany will halt approval of Nord Stream 2 pipeline

German Chancellor Olaf Scholz said today that Berlin will halt the regulatory approval process for Nord Stream 2, a controversial Russia-to-Germany natural gas pipeline, following reports that Moscow has moved troops into separatist regions of eastern Ukraine, Loveday Morris and Frederik Seeler report for The Post.

"Without this certification Nord Stream 2 cannot start to operate,” Scholz said at a press conference Tuesday.

While concerns about Nord Stream 2 have centered on geopolitical calculations involving Russia and Ukraine, the pipeline has significant climate implications: It has the potential to leak massive amounts of methane, a potent greenhouse gas.

Climate justice will take center stage at COP27

The next United Nations climate summit, hosted by Egypt, will focus on sending climate funding to developing countries in an effort to help them reduce greenhouse gas emissions and adapt to the effects of a warming world, Bloomberg Green’s Jess Shankleman reports

Last year’s meeting in Glasgow, Scotland, centered on setting more ambitious targets and deadlines for cutting emissions globally. Instead of laying out additional commitments, COP27 in November is expected to focus on how to start implementing those promises while setting post-2025 goals for funding from wealthy countries. 

Developing countries often make the smallest contributions to global warming but are disproportionately harmed by it. Leaders in those nations say that not much progress has been made at previous meetings with regard to compensation for loss and damage.

The U.N. Intergovernmental Panel on Climate Change will release a report on Feb. 28 that is expected to discuss how global warming is already disrupting people's lives. The report could put pressure on wealthy countries to address climate justice in the lead-up to COP27 in November.

U.S., Egypt launch group to prepare for COP27

U.S. climate envoy John F. Kerry visited Cairo on Monday to launch the U.S-Egypt Climate Working Group, an effort to advance climate goals, set priorities and get more countries — including Russia and China — on board with climate targets ahead of COP27, Samy Magdy reports for the Associated Press

At a news conference, Kerry said that climate change is a security threat that requires fast action, regardless of political ideology or the current international focus on Russia and Ukraine.

“We know the world is appropriately focused and following the situation in Ukraine, where critical values and countless lives are at stake,” he said. “Today, I am here to talk about another threat to the planet: our changing climate.”

Neither Kerry nor Egyptian Foreign Minister Sameh Shoukry, who will chair COP27, took questions from reporters.

The power grid

One year after Texas freeze, renewables could help prevent blackouts

Around this time last year, millions of Texans were shivering as a deadly cold spell triggered blackouts for five days. Now, a study finds that blackouts can be avoided, even during severe storms, by switching completely to renewable energy, The Washington Post’s Kasha Patel reports.  

The study simulated a nation 30 years from now that replaced all fossil fuels with sustainable alternatives including solar, wind or water power. It found that the switch would lower energy requirements, reduce consumer costs, create millions of new jobs and improve people's health. It also found that energy demand decreased significantly by shifting to more efficient resources, making the grid more reliable. 

The study’s author, Mark Jacobson, a professor of civil and environmental engineering at Stanford University, previously faced criticism over research in 2015 on a massive transition to renewable energy, with more than 20 researchers citing their concerns in a separate study

Jacobson said that the new study's model was tested under many different conditions and incorporated data that was not available at the time of the 2015 paper.

Pressure points

Famed environmental group 350.org has faced years of internal tension

350.org, the environmental group that has long been a key player in holding companies and the government accountable for their climate actions, is facing layers of internal tensions that threaten its operations, Politico’s Zack Colman reports

The group, founded by the author and environmentalist Bill McKibben, is known for its bold, often spectacle-worthy protests, including those against the Keystone XL pipeline. But a budget crunch, massive layoffs, racial equity fights and union strife have plagued the organization in recent years.

350.org saw its U.S. program office fall from nearly 50 people in 2019 to nine entering this year. Many former employees say the organization played favorites when it came to salary, fostered a culture of bullying and underfunded programs led by people of color.

In 2008, 350.org announced a hiring spree with the goal of increasing racial and ethnic diversity within its ranks. But when it became clear that the group could not afford the expansion, the organization abruptly laid off hundreds of people, ultimately sparking a union battle in 2020 along with mass resignations.

In response to Politico's investigation, 350.org’s leaders described new financial processes and governance measures, efforts to eliminate pay disparities and initiatives to improve equity in hiring. Since the fallout, the group says that its finances have stabilized and that its focus has shifted from mass demonstrations to more targeted campaigns, such as getting the Federal Reserve to take climate risks more seriously.

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