Court Upholds Administration’s Use of Social Cost of Carbon Metric for Federal Regulations
September 6, 2016
In August, the 7th U.S. Circuit Court of Appeals unanimously rejected a request by industry groups to overturn a Department of Energy (DOE) rule setting energy efficiency standards for commercial refrigerators. The use of the Social Cost of Carbon (SCC) metric was utilized in the cost-benefit analysis to set the new energy efficiency refrigeration standards. The ruling represents a major legal victory and an important case since it is the first time a federal court has examined the legality of the SCC metric for regulations.
The U.S. Environmental Protection Agency (EPA) and other federal agencies use SCC to estimate the climate benefits of rulemakings. The SCC currently sits at $36 per metric ton.