FERC Cannot Avoid the Social Cost of Carbon By Arguing That It is Not Universally Accepted

On August 3, the District of Columbia Court of Appeals held that FERC could not avoid use of the social cost of carbon in assessing the impacts of natural gas projects by arguing that “there is no universally accepted methodology.”  Given the growing recognition of the significant role FERC is going to have in combatting climate change, it’s an important decision. 

FERC acknowledged that construction and operation of the projects under review would “contribute incrementally to future climate change impacts.”  However, because of the perceived absence of a “universally accepted methodology”, FERC took the position that “it is not currently possible to determine localized or regional impacts from [greenhouse gas] emissions from the Project.”

However, in so doing, FERC ignored a key provision of the NEPA regulations, which state that:

 [i]f . . . information relevant to reasonably foreseeable significant adverse impacts cannot be obtained . . . because the means to obtain it are not known, the agency shall include within the environmental impact statement . . . [t]he agency’s evaluation of such impacts based upon theoretical approaches or research methods generally accepted in the scientific community.

FERC explained why it did not utilize the SCC in its NEPA analysis.  However, it completely failed to address the NEPA regulatory requirement to use “theoretical approaches or research methods generally accepted in the scientific community.”  That was pretty much the end of the case.  To the Court, the SCC seemed to fit pretty squarely under the regulatory language.  FERC’s complete failure even to discuss the regulation required remand.

The big question is what happens following remand and in other, similar cases.  FERC – or project proponents or GOP state attorneys general – could certainly argue that the SCC is not “generally accepted in the scientific community.”  However, as I have previously noted, even as much as four years ago, a court rejected challenges to use of the SCC in NEPA environmental assessments, noting that “uncertainty” is not the same as “speculation”, and concluding that the presence of uncertainty makes careful environmental assessment even more necessary.  Uncertainty is not an excuse to avoid doing the best job that an agency can to assess environmental impacts – including those related to climate change.

FERC – or project proponents or GOP state attorneys general – could also try to use the Trump administration’s version of the SCC.  It’s unlikely at FERC, since it will soon have a Democratic majority.  I think in any case, the Trump SCC is unlikely to get any traction in implementation of EISs.  However, we still don’t know what a group of Trump-appointed appellate judges will do with EISs based on a significantly higher SCC.

The GOP attorneys general are undoubtedly right about one issue – the value we set on the social cost of carbon matters.  A lot.

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