US Court of Appeals Approves Social Carbon Price

A unanimous decision from the U.S. Court of Appeals has upheld the government’s right to use a social carbon price to inform policymaking. This “upstream” tax targets the carbon contents of fossil fuels, including coal, oil, and natural gas—as well as biofuels. The court’s decision rejected industry-backed litigation that challenged the Department of Energy’s use of a $36-per-metric ton estimated social cost of carbon under the argument that this figure is not based on “real-world” data. The federal court determined that being “limited or imperfect” is not a reason to dismiss the pricing model. That cost will rise to $50 a metric ton in 2030 and $69 a metric ton in 2050. This was the first time a court has considered the legality of the Obama administration’s accounting of the costs of greenhouse gas emissions. All three judges were Republican appointees. Read more here.