In the News

Late last week, the Commodity Futures Trading Commission (CFTC) finalized its guidance for regulated exchanges that list derivatives products based on carbon credits. Many commentators quickly praised the guidance as improving oversight for the troubled voluntary carbon markets, which face continuing criticism over their integrity problems. In particular, many carbon credits do not represent the greenhouse gas (GHG) emissions reductions they are intended to represent. While the guidance is a positive step towards improving voluntary carbon market integrity, it’s only a small one: The guidance is extremely limited in reach.

Also on the sidelines of Climate Week, New York University’s Institute for Policy Integrity hosts a day-long event on Sept. 24 about greenhouse gas emissions accounting.

In May 2024 authors from NYU Law School’s Institute for Policy Integrity and Guarini Center on Environmental, Energy & Land Use Law wrote that the cap-and-invest program, as described so far, “is insufficient to achieve legally mandated GHG emissions reductions,” and saying there is an “urgent need for state agencies to develop complementary programs.”

“Is there a need for another group to revisit [the social cost metric] at this time? Not really,” Jason Schwartz, legal director at New York University’s Institute for Policy Integrity, tells Inside EPA’s Climate Extra. “The working group could continue to focus on things like solid application and encouraging agencies to follow the best practices.”

In an article in the Administrative Law Review, Natasha Brunstein, a former legal fellow at the Institute for Policy Integrity at New York University School of Law, claimed that in the wake of two recent Supreme Court decisions, lower federal courts’ handling of the major questions doctrine has been inconsistent.

Aspects of Loper Bright are relatively clear. The majority notes that Congress “often” lawfully delegates a degree of discretion to agencies. As illustrated in a forthcoming article by Don Goodson at New York University’s Institute for Policy Integrity, the majority draws an important distinction between grants of discretionary authority and Chevron deference. Once an agency’s discretionary authority is established, litigants defending agency actions can often take advantage of the APA’s arbitrary-and-capricious standard of review to argue that reasonable, record-supported actions should be upheld.

The Institute for Policy Integrity filed a brief demonstrating that the petitioners’ argument that the rules are “too costly given the benefits they provide” is based upon economic analyses that are fundamentally flawed: “Much of corporate America already provides or will soon provide climate-related disclosures, either voluntarily or to comply with mandatory disclosure laws in other jurisdictions,” a critical data point that the petitioners ignored. And IPI’s brief points out that the benefits of the rule are significant – providing investors with specific, comparable, and decision-useful information.

Updating its SC-GHG to incorporate the latest knowledge in climate science and economics was a major analytical success for EPA, and using it to evaluate the benefits of the agency’s new environmental regulations will produce tangible results in the fight against climate change. But transforming the numbers from an analytical step forward to a powerful weapon in the fight against climate change requires rapid, widespread adoption. The Institute for Policy Integrity is already encouraging other agencies and state governmental bodies to use EPA’s estimates through comments in regulatory proceedings. Whether those efforts — and others like them — are successful will largely depend on political factors and the appetite of regulators to seriously and rationally consider the damage that climate change will continue to inflict.

The Climate Change Superfund Act is modeled on the existing State and Federal Superfund law (which requires polluters to fund toxic waste dump cleanups) by making Big Oil climate polluters financially responsible for the environmental damages that they have caused. The top Big Oil companies will be required to pay a combined $3 billion annually, every year for 25 years. These costs won’t fall back on consumers, according to economists and an analysis from the think tank Institute for Policy Integrity at NYU School of Law. 

In another brief, the Institute for Policy Integrity at New York University School of Law argued that the petitioners suing over the rules overstated the rules' costs and understated their benefits. "Petitioners also argue that the SEC failed to respond to an event study that they say shows the rules' benefits are nonexistent, but the study had critical limitations and was of little relevance," the institute argued. "Neither set of economic arguments provides a basis for vacating the rules."