In the News

Three agencies that are the backbone of U.S. banking regulation have developed joint guidance, released today, on how banks should manage the monetary risks of the climate crisis. Previously, EDF partnered with NYU School of Law’s Institute for Policy Integrity to submit joint comments to all three agencies – the FDIC, the Federal Reserve Board and the OCC. 

The US Inflation Reduction Act (IRA) is a milestone on the path towards the electric vehicle (EV) era — a monumental shift with the potential to remodel not just the US automotive industry, but the global landscape. Washington is working to establish alternatives to China’s control over critical mineral resources within the Asia-Pacific region, potentially recalibrating the global EV industry.

The Bipartisan Infrastructure Law strengthened the Federal Energy Regulatory Commission’s authority to site interstate transmission projects that have been rejected or not acted upon by states. Used appropriately, this authority can help the United States build the transmission infrastructure necessary to achieve President Joe Biden’s goal of fully decarbonizing the electricity grid by 2035.

Last year, the Supreme Court sided with West Virginia in rejecting a different (Obama-era) EPA plan. “The West Virginia decision left intact EPA’s obligations to reduce greenhouse gas emissions that endanger public health from the power sector,” says Dena Adler, an attorney at the Institute for Policy Integrity at New York University School of Law, in an emailed statement. The 2022 ruling left pathways available to the EPA, she says, and “the agency has carefully walked those lines in this proposal.”

EPA has previously set standards that require industries to invest in new types of pollution controls, said Dena Adler, an attorney with New York University’s Institute for Policy Integrity. “The history of the Clean Air Act is filled with regulations where technologies were projected to be very expensive,” she said. “And after the regulations came down, industry figured out how to install these control technologies better and cheaper.”

Forcing oil companies to cover New York’s climate costs will not raise the price of gas or home heating. According to an analysis from the Institute for Policy Integrity at NYU Law, because companies’ payments would be based on historical contributions to greenhouse gas emissions, oil companies would have to treat these as one-time fixed costs.

Environmentalists are bracing for the Biden administration to approve Willow. If it does, it’s unclear what difference a higher social cost metric would have made. “In theory — and this is what advocates have been saying — the agency could conduct some sort of weighing of costs and benefits,” said Max Sarinsky. “And there the social cost of carbon could factor prominently ... But right now, that's not what they do,” he added. “In most cases, that has meant ‘If there's an interest in fossil fuel development, we're going to approve it.’”

Environmental advocates have insisted for years on the need to robustly account for climate impacts when permitting fossil-fuel infrastructure. Courts and agencies are starting to listen. A recent decision from the U.S. Court of Appeals for the Tenth Circuit and a new guidance document from the White House Council on Environmental Quality mark the latest developments in ensuring that federal agencies consider climate-change impacts before greenlighting fossil-fuel projects.

Top Hill Democrats are backing the Biden EPA’s legal defense of its light-duty vehicle greenhouse gas rule, asserting that challengers’ claims the standards violate the “major questions” doctrine ignore “explicit direction” from Congress and “would severely limit the ability of Congress itself to craft effective legislation” if affirmed. Other amicus briefs backing EPA filed by a March 3 deadline include filings by the Institute for Policy Integrity.

University of Virginia law professor Michael Livermore explains the significance of the Biden administration's proposal to increase its estimate of the social cost of carbon, which federal regulatory agencies use to measure the economic consequences of greenhouse gas emissions. Livermore's 2022 article in the Yale Journal on Regulation, Costs, Confusion and Climate Change, coauthored with Justin Gundlach of New York University School of Law, looked at the SCC's effectiveness as a cost-benefit analysis tool.