In a 2-1 decision, the D.C. Circuit Court of Appeals ruled that a federal district court abused its discretion when it granted nonprofit organizations’ motion for a preliminary injunction requiring the U.S. Environmental Protection Agency (EPA) and a bank that served as the U.S.’s financial agent to continue funding grants awarded to the organizations during the Biden administration under the Greenhouse Gas Reduction Fund (GGRF) established by the Inflation Reduction Act (IRA). The D.C. Circuit’s opinion—authored by Judge Rao and joined by Judge Katsas—held that pursuant to the Tucker Act the Court of Federal Claims had exclusive jurisdiction over the nonprofit organizations’ “essentially contractual” claims that the grant terminations violated regulations governing federal grantmaking and were arbitrary and capricious under the Administrative Procedure Act. The D.C. Circuit further held that the ultra vires exception to sovereign immunity for claims that federal officials exceeded their lawful authority did not apply to the organizations’ “essentially contractual” claims. Although the D.C. Circuit concluded that the district court had jurisdiction over the organization’s constitutional claim that EPA violated separation of powers by not enforcing the IRA, the D.C. Circuit found that the claim was meritless. As an initial matter, the court said the claim was “not a constitutional claim at all”; the court further found that EPA had issued the grants in accordance with any requirement in the IRA to spend funds and that EPA’s subsequent actions terminating the grant awards were “well within the Executive Branch’s authority and responsibility to manage the expenditure of funds and to ensure that money appropriated by Congress is properly spent for its intended purposes.” The D.C. Circuit also found that the organizations’ loss of grant funds during the litigation was not irreparable because any harm would be compensable through money damages and any need to suspend operations would affect only entities “created solely for the purpose of applying for and spending” the GGRF grants. The D.C. Circuit also found that the equities “strongly favor the government, which on behalf of the public must ensure the proper oversight and management of this multi-billion-dollar fund.” 

Judge Pillard dissented, writing that the majority’s characterization of the nonprofit organizations’ lawsuit as involving “garden-variety contract claims against EPA’s reasonable decisions to terminate their grant awards … fails to contend with the government’s actual behavior and misapprehends” the organizations’ claims. The dissenting opinion would have found that the separation of powers violation warranted the district court’s injunction and that the injunction was “independently warranted by the arbitrary and capricious character of EPA’s actions.” The dissenting opinion also rejected the majority’s conclusion that Tucker Act precedents supported exclusive jurisdiction in the Court of Federal Claims.

Lawsuits challenging EPA's freezing and purported termination of funding under the Inflation Reduction Act’s Greenhouse Gas Reduction Fund.

Climate United Fund v. Citibank, N.A.

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D.C. Circuit Vacated Injunction Requiring Continued Funding of Greenhouse Gas Reduction Fund Grants

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

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Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

People who are less able to respond to the effects of climate change due to having limited financial or physical assets

A tax advantage is a fiscal incentive where the government reduces or exempts selected activities, goods or actors from taxes.

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

A subsidy is a direct or indirect payment to individuals or businesses, typically provided as a government cash payment or a specific tax reduction.

Direct investments by the governments using public funds. This can be to support climate initiatives or integrate climate into other projects.

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

A ban is a legal action that prevents the sale or supply of a product or service, or that recalls a product from the market. Examples are bans on SF6, greenwashing, fossil fuel advertisement or single-use plastics.

Financial actors and resources that are primarily directed towards climate change mitigation, adaptation and compensation.

Dedicated pool of financial resources for climate-related projects.

A financial institution that manages a country's currency and can promote climate-related initiatives through green monetary policy and other means.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

Replacing technologies that burn fossil fuels directly with alternatives powered by electricity.

Actions to reduce emissions in energy generation and supply.

Investment in electricity transmission and distribution systems capable of integrating renewable energy, supporting electrification and strengthening energy system resilience.

Technologies that capture and hold energy in reserve for later use.

Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

Air pollution involves harmful contaminants in the air, affecting both indoor and outdoor environments. It can lead to health issues like respiratory diseases and heart problems, and climate impacts such as global warming. Pollutants can damage plants, trees, habitats, and water bodies like rivers and lakes.

Social protection systems consist of policies that help people manage social risks in order to prevent poverty and maintain decent incomes and living standards

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

People with different national or cultural traditions from the dominant population

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Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

The activities of industries that transforms raw materials into finished goods through industrial processes.

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Climate change can have a range of impacts on technological system. Extreme weather events can cause infrastructure failures like power outages or damage to roads and bridges, as well as the impacts from waste following natural disasters. Human activities also cause technological impacts, such as the risks posed by oil spillage and leaks.

D.C. Circuit Vacated Injunction Requiring Continued Funding of Greenhouse Gas Reduction Fund Grants

Target

Policy instrument

Risk

Impacted group

Just transition

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance