On May 26th the United States Supreme Court rejected a challenge by Republicans who questioned the measurement the White House used to calculate the social cost of carbon emissions. Republicans have argued that the metrics used to estimate the real costs of the climate crisis are “speculative”. However, in a one-sentence order, the court rejected the request by Republican-ruled states to prevent federal agencies from using estimates of damage caused by gas emissions.
The amount of value placed on the “social cost of carbon” is relevant because it helps to estimate the damage caused by the impact of CO2 on the climate. The consequences of this damage are intensified and more frequent disasters such as fires, droughts and floods. This metric is also so important because it makes it possible to compare the profits from the extraction of fossil fuels to the costs of, for example, the health service.
When Barack Obama was still in the White House, the damage caused by climate damage was estimated to be $51 for every tonne of carbon dioxide emitted into the atmosphere. Subsequently Donald Trump lowered the amount to $7 or less per tonne of CO2. After taking office in January 2021, Biden reinstated the Obama-era quota, and his officials began work on updating it.
The Republican red states described the White House’s greenhouse gas estimates as “a power grab designed to manipulate America’s entire federal regulatory apparatus through speculative costs and benefits so that the Administration can impose its preferred policy outcomes on every sector of the American economy.”
The lawsuit was heard by Trump’s nominee for the supreme court, judge James D. Cain Jr. He sided with the Republican attorneys general and issued a ban on the “social cost” formula for CO2 emissions. Cain reasoned that using the formula would harm states that based their economies on energy production.
The White House’s response was rapid: it suspended the issuance of drilling permits to rethink how to factor climate costs into permits. The Cain ruling was also appealed. The Fifth Circuit Court of Appeals in New Orleans suspended Cain’s ruling pending the Biden administration’s appeal. The judges’ decision left in place the previous standard of $51 in compensation per ton of carbon dioxide emitted.
,,We are of course very pleased with the Supreme Court’s order,” a spokesperson for the Office of Management and Budget (OMB) said in a statement. “Properly accounting for the harms caused by greenhouse gas emissions is critical to our work to reduce energy costs and protect Americans from the growing impacts of climate change, which is already costing American communities and businesses billions of dollars in mitigation and response.”
Elizabeth Prelogar, solicitor general of the US, commented on the case. She recalled that presidents have been trying for years to develop an appropriate formula for calculating the social cost of greenhouse gas emissions. She added that the claims of the “red states” are premature. However, she pointed out that in the future, if the formula is used in an inappropriate way and causes damage,it will be possible to challenge its use in such a specific case.