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Legal Brief on the Social Cost of Carbon

We recently filed an amicus brief in a federal court case challenging the U.S. Department of Energy’s (DOE’s) new efficiency standards for commercial refrigeration equipment. The case, Zero Zone Inc. v. U.S. Department of Energy, will be heard by the U.S. Court of Appeals for the Seventh Circuit.

DOE quantified the benefits for this rule by applying the “social cost of carbon” (SCC), a framework for estimating the monetized, global damages caused by releasing an additional ton of carbon dioxide anywhere into the atmosphere. The agency relied on the SCC estimates developed by a rigorous interagency process over many years. In opposing DOE’s energy conservation standards, the petitioners take aim at nearly every aspect of the SCC’s development and its application to this rule. Our brief defends the development and application of the SCC as rigorous, rational, and consistent with statutory requirements, regulatory best practices, and case law.

The brief discusses the clear statutory instructions in the Energy Policy and Conservation Act to weigh “the need for national energy conservation,” which courts and agencies have repeatedly interpreted to include environmental, economic, and national security effects. It also describes the interagency process that developed the SCC values. That process was transparent and open to repeated public comments; it was rigorously grounded in the best available, peer-reviewed scientific and economic literature; and it properly addressed the uncertainties of climate science without becoming paralyzed by them. Finally, the brief discusses the geographic and temporal scope of DOE’s benefit calculations. DOE deliberately selected a global perspective for the SCC values because a global perspective directly advances U.S. national interests. A domestic-only view of climate change, by contrast, would prevent DOE from setting conservation standards at economically efficient levels, and would risk impeding international climate actions that directly benefit U.S. welfare. With respect to timespan, DOE assessed both the costs and benefits accruing over time due to refrigerators sold for 30 years following the Rule.