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Federal Court Dismisses States' Challenge to President Biden's Executive Order 13990 on the Social Cost of Greenhouse Gases

On August 31, 2021, a federal district court in Missouri v. Biden, 4:21-cv-00287, 2021 WL 3885590 (E.D. Mo. 2021), dismissed a suit brought by the State of Missouri and 12 other states, challenging President Biden's Executive Order 13990. The executive order, in relevant part, establishes an Interagency Working Group on the Social Cost of Greenhouse Gases ("Working Group") and directs the Working Group to quantify in monetary values the social costs of carbon, methane, and nitrous oxide emissions. According to Executive Order 13990, federal agencies must "capture the full costs of greenhouse gas emissions" when conducting cost–benefit analyses of regulatory actions.

On February 26, 2021, the Working Group published interim values that are identical to those developed by another working group under President Obama in 2016, except the current values have been adjusted for inflation. Plaintiffs filed suit for a preliminary injunction, seeking to enjoin federal agencies from using these interim values, alleging that they are arbitrary, lack a reasonable basis, and would result in imminent harm. The underlying complaint challenges Executive Order 13990 based on alleged violations of the U.S. Constitution, agency statutes, and the Administrative Procedure Act.

The district court dismissed the case after concluding that the states lacked standing to pursue their claims and, relatedly, that their claims were not ripe. The court reasoned that the claims were "inherently speculative" and relied on a "highly attenuated chain of possibilities"—namely, that at some point in the future, a federal agency would issue some regulation that relies on these values; the agency would then "disregard" any objections to the agency's proposed action; and the "yet-to-be-identified regulation" would then harm the states in some "concrete and particularized way." This theory, according to the court, did not satisfy any of the three elements for standing: injury in fact, causation, or redressability. Moreover, the claims were not ripe because any impact from Executive Order 13990 could not be felt immediately, and the states would have "ample opportunity to bring legal challenges to particular regulations" in the future.

The states have a pending appeal at the Eighth Circuit Court of Appeals.

The Working Group will be issuing its final values by January 2022. Currently, the Working Group has set the social cost of carbon at $51 per metric ton ("mt"), the social cost of methane at $1,500/mt, and the social cost of nitrous oxide at $18,000/mt. In its February 2021 publication, the Working Group stated that these interim values "likely underestimate social damages from GHG emissions." Though uncertain, this may signal that the Working Group's final values will increase. These values will likely have significant implications in shaping future regulatory action.

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