Summary:What will be the fate of the Clean Power Plan? The Supreme Court has upheld the EPA’s authority to regulate carbon pollution three times, but it has also signaled that there is a limit to how much deference it will give to the agency.
On Oct. 23, 2015, the Environmental Protection Agency (EPA) published the final rule adopting the Clean Power Plan under Section 111(d) of the Clean Air Act. Within hours of publication, 24 states and Murray Energy Co. petitioned the D.C. Circuit for an immediate stay, arguing that the EPA has “gone far beyond the authority granted it by Congress.” With the Paris climate talks fast approaching, opponents were hoping the court would freeze the rule to send a message to negotiators that President Obama’s pledged emissions cuts are in trouble. But the court dashed those hopes by granting the EPA’s request for a briefing schedule that will push any decision on the stay into next year.
The Clean Power Plan aims to reduce carbon pollution from existing power plants by 32 percent below 2005 levels by 2030. The plan uses a combination of strategies designed to improve power plant efficiency, to increase the use of existing and new natural gas plants, and to bring more renewables (solar, wind and hydro) onto the grid. The plan sets numerical emission limits for both coal- and gas-fired plants, and it sets emission reduction goals for each state based on interconnected grids within three distinct regions of the country. The EPA has established a phased compliance schedule that gives states up to three years to submit their implementation plans and seven years before the first compliance date arrives in 2022. The EPA is also providing special incentives in the form of emission reduction credits for early movers to deploy renewables and to target energy-efficiency improvements in low-income communities by 2022.
Opponents are throwing everything they can at the Clean Power Plan. They claim it violates the 10th Amendment by commandeering the resources of the states. It does no such thing. The rule leaves it to the states to decide how best to meet the carbon reduction goals given their unique mix of energy sources and grid capabilities. If a state chooses not to submit a plan—though that would not be the smartest or most cost-effective approach—the EPA will provide one for it. There is no penalty or sanction for not submitting a plan, hence no constitutional infringement.
Opponents also argue that the EPA has no authority to regulate carbon emissions from power plants because it already regulates mercury emissions from these same plants. This somewhat bizarre argument is based on a legislative glitch that occurred in the 1990 amendments to the Clean Air Act when Congress inadvertently adopted two different versions of the amendments, one of which supports the EPA’s authority to regulate carbon and the other which can be interpreted to preclude it. Where statutes are this ambiguous, the Supreme Court has said that the EPA’s interpretation must be accepted so long as it is reasonable. The EPA has made a compelling case that Congress could not have intended to strip the agency of its authority to regulate dangerous pollutants, including carbon, under section 111(d) that are not regulated under another provision.
Perhaps the most serious challenge to the Clean Power Plan is the argument that the EPA has gone “beyond the fenceline” in setting emission reduction targets. But this mischaracterizes what the EPA is doing. The objective of the Clean Power Plan is to set a performance standard based on the “best system of emission reduction” applicable to the production of electricity, not just coal-fired electricity. This is consistent with what the EPA has been doing for decades under the Clean Air Act. For example, the EPA’s acid rain control program performance standards can involve shifting from a dirtier method of producing a product to a cleaner method of producing the same product. Similarly, the Clean Power Plan requires a shift from more carbon-intensive to less carbon-intensive ways of producing electricity. This shift is within the control of the states and the facility operators. In fact, there is already a major transformation under way in the energy sector with cheaper, cleaner natural gas and renewable sources displacing dirtier coal plants at a rapid clip.
The ultimate fate of the Clean Power Plan probably rests in the hands of the Supreme Court. The court has upheld the EPA’s authority and obligation to regulate carbon pollution three times. But it has also signaled that there is a limit to how much deference it will give to the EPA’s assertion of broad authority with such significant economic and social consequences. So the outcome is uncertain. Regardless, it could take as long as three years before we know the answer and by then the Clean Power Plan may have gained enough momentum that the energy transition needed to avert a climate catastrophe will be unstoppable.