States sue Biden over social cost of carbon order

March 12, 2021, 9:30AMNuclear News


Twelve states are suing the Biden administration over the president’s January 20 executive order on climate change. The suit was filed in U.S. District Court on March 8 by Missouri attorney general Eric Schmitt, who was joined in the action by his counterparts in Arizona, Arkansas, Indiana, Kansas, Montana, Nebraska, Ohio, Oklahoma, South Carolina, Tennessee, and Utah.

The reason: The suit objects to a provision in the order that revitalizes the social cost of carbon (SCC) metric—a tool used by regulators to weigh the cost to society, in dollars, of emitting one ton of carbon dioxide into the atmosphere. The SCC—which takes into account such things as human health, agricultural productivity, property damage from increasingly severe storms, and the value of ecosystem services—had faded into insignificance under President Trump.

Biden’s order established an Interagency Working Group (IWG) to determine the SCC, as well as the social costs of methane (SCM) and nitrous oxide (SCN), the two other major greenhouse gases. On February 26, the group announced an interim SCC figure of $51 per ton—a calculation on a par with the Obama administration’s SCC (and many times that of the Trump administration’s $1 to $7 estimates). Final numbers for the SCC, SCM, and SCN are due from the IWG next January.

Stating their case: Schmitt et al. allege that the president lacks the constitutional authority to enact the order. “Setting the ‘social cost’ of greenhouse gases is an inherently speculative, policy-laden, and indeterminate task, which involves attempting to predict such unknowable contingencies as future human migrations, international conflicts, and global catastrophes for hundreds of years into the future,” they state. “Assigning such values is a quintessentially legislative action that falls within Congress’s exclusive authority under Article I, Section 1, of the Constitution.”

The suit also contends that the economic consequences of the order would be disastrous, declaring, “If the executive order stands, it will inflict hundreds of billions or trillions of dollars of damage to the U.S. economy for decades to come. It will destroy jobs, stifle energy production, strangle America’s energy independence, suppress agriculture, deter innovation, and impoverish working families.”

Food for thought: As noted in a March 5 blog post by Hogan Lovells attorneys and nuclear regulation experts Amy Roma and Sachin Desai, the SCC has “been used by states to support the nuclear industry to the tune of hundreds of millions of dollars a year—by compensating at-risk nuclear plants for their zero-emissions benefits based on a value derived in part from the SCC. A return and reinvigoration of the SCC has the potential to similarly incentivize large investments into nuclear energy through credit programs that rely on the use of the SCC.”

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