Federal Judge Blocks Biden’s Social Cost of Greenhouse Gas Estimates

On February 11, 2022, Judge James Cain of the U.S. District Court for the Western District of Louisiana granted a motion for a preliminary injunction filed by Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, South Dakota, Texas, West Virginia, and Wyoming (Plaintiff States) to prohibit federal agencies from adopting and relying on the interim Social Cost of Greenhouse Gas (SC-GHG) estimates established by the Interagency Working Group (IWG). Executive Order 13990 mandated that IWG publish estimates of the monetized damages associated with incremental increases in greenhouse gas emissions.

In granting the preliminary injunction, Judge Cain ruled the following:

1. The Plaintiff States had standing under the traditional analysis, as the SC-GHG estimates will cause regulatory standards for air quality, energy efficiency, and power plant regulation to become more stringent, result in significant cost increases, and directly harm the economies and revenues of Plaintiff States. The Plaintiff States have suffered actual injury, as the U.S. Environmental Protection Agency (EPA) has implemented SC-GHG estimates, which resulted in EPA disapproving state implementation plans and imposing federal implementation plans on Louisiana, Kentucky, and Texas.
2. The Plaintiff States also have standing under the “special solitude” afforded states as plaintiffs because the SC-GHG estimates significantly limit the discretion granted states under delegated federal programs.
3. In addressing the likelihood of success on the merits, the court found that Executive Order 13990 violates the major questions doctrine, which ensures that agencies do not impose new obligations of “vast ‘economic and political significance’ ” upon private parties and states unless Congress “speaks clearly.” As Congress had not clearly directed the President or any agency to adopt the SC-GHG estimates, the President lacked the power to order this action by the IWG.

On the same day, in a separate order, Judge Cain issued a broad preliminary injunction that enjoins the government from

1. adopting, employing, treating as binding, or relying on the work product of the IWG
2. independently relying on the IWG’s methodology considering global effects
3. adopting, employing, treating as binding, or relying on any SC-GHG estimates based on global effects or that otherwise fails to comply with applicable law
4. adopting, employing, treating as binding, or relying on any estimate of SC-GHG that does not utilize discount rates of 3% and 7% or otherwise does not comply with Circular A-4; Circular A-4, issued in 2003 by President George W. Bush’s Office of Management, instructs agencies to use both 3% and 7% discount rates when conducting regulatory cost/benefit analysis and to consider domestic rather than global costs and benefits
5. relying on or implementing Section 5 of Executive Order 13990 in any manner

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