This post is part of the Environmental Law Review Syndicate, a multi-school online forum run by student editors from the nation’s leading environmental law reviews.

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By Eric Anthony DeBellis, Senior Executive Editor of the Ecology Law Quarterly

INTRODUCTION

The overwhelming majority of environmental enforcement actions settle out of court, but overlooking settlements as merely a mechanical means to save time and court costs is a mistake. An agency’s approach to settlement has tremendous environmental justice implications that go largely unnoticed.

In a traditional enforcement settlement model, the government claims the exclusive right to speak for the people. It brings an enforcement action against the defendant, and the two parties negotiate a penalty amount. The defendant signs a settlement agreement and pays the penalty to the Treasury. This is the “Speeding Ticket” settlement model. This model is expedient, but it excludes affected communities. The Speeding Ticket model remains the norm today, but several state and federal agencies have begun to explore an alternative tool: the supplemental environmental projects (SEP).

A SEP is an environmentally beneficial project that a defendant undertakes voluntarily as part of a settlement agreement; in exchange, the violator pays a reduced penalty amount.[1] Agencies credit defendants for improving environmental conditions that otherwise go unaddressed.[2] Rather than only writing a check, the defendant invests a portion of the would-be penalty amount in the affected community.[3] SEPs shift focus toward a model where an offender works to right harms caused by her actions, an enforcement paradigm more closely resembling restorative justice.[4]

Through the lens of restorative justice, I evaluate SEP policies the U.S. Environmental Protection Agency (EPA) and the California Legislature issued earlier this year. Part I introduces restorative justice as a framework for evaluating agency settlement policies. Part II illustrates the failures of the Speeding Ticket settlement model as a means to achieve justice. Part III introduces the new federal and California SEP policies. Part IV makes recommendations for how EPA and the California Environmental Protection Agency (Cal EPA) can administer their SEP policies to better reflect restorative justice values.

I. RESTORATIVE JUSTICE AS AN ALTERNATIVE TO THE PUNISHMENT PARADIGM

Punishment lies at the heart of traditional American legal philosophy, situating the State as the law’s underwriter and enforcer. The punishment paradigm focuses on the injurer as an adversary to the State. This ideology has evolved; the most notorious contemporary iterations are “Tough on Crime” rhetoric and mass incarceration policies.[5] Critics of the approach have denounced retributivism as sadistic in theory,[6] racist in application,[7] excessively costly,[8] and creating more harm than it prevents.[9]

Restorative justice offers an alternative model,[10] treating punishment not as an end but a means to achieving positive, constructive change for both offenders and victims.[11] Restorative justice focuses on the relationship between the injurer and the injured and re-positions the State as a mediator.[12] The State’s role in restorative justice is not to impose a resolution but to support the parties in reconciliation and mutual rehabilitation.[13]

As a values proposition, restorative justice seeks to move past the conventional punishment paradigm to improve outcomes for both parties.[14] The Centre for Justice and Reconciliation defines restorative justice as “a theory of justice that emphasizes repairing the harm caused by [unlawful] behavior . . . best accomplished through cooperative processes that allow all willing stakeholders to meet.”[15] Two factors make a dispute resolution method consistent with restorative justice: correction and participation.

A model is corrective if it eliminates wrongful gains and counteracts harm.[16] Fines can eliminate wrongful gains, and investing all or part of a fine in ameliorating victims’ injuries can lessen harms, satisfying the corrective element. However, restorative justice demands more than correction. It also calls for stakeholder participation.[17]

The restorative justice model does not treat parties to a dispute as adversaries.[18] Instead, it promotes reconciliation.[19] The offender confronts her actions’ consequences, potentially reducing repeat offenses.[20] Victims voluntarily involved in the dispute resolution process tend to express more satisfaction with the outcome.[21] Further, the traditional enforcement regime’s shortcomings make the need for an alternative approach evident.

II. THE FAILURE OF THE SPEEDING TICKET SETTLEMENT MODEL

The Speeding Ticket model’s efficacy relies on assumptions that do not hold true in the context of environmental enforcement. First, the model assumes that environmental law noncompliance injures the “public interest” generally and uniformly, but most environmental harms are localized. For example, even the generally diffuse impacts of climate change affect certain vulnerable places—like coastal regions that flood first as oceans rise—more than others.[22] Similar adverse impacts tend to concentrate on particularly vulnerable groups, including people of color, lower income, and greater linguistic isolation.[23] Yet the Speeding Ticket model does not target reinvestment of penalty funds in the communities that bear the brunt of environmental harm. Instead, settlement funds enter the state or federal general budget, not earmarked for any particular use.[24]

A recent tragedy in rural Texas illustrates this paradox. In 2013, a fertilizer plant in West, Texas, exploded, killing fifteen people.[25] The chemical inventory the company had filed with the West Volunteer Fire Department neglected to mention thousands of tons of highly combustible ammonium nitrate located onsite.[26] When a fire broke out at the plant, first responders were not prepared for the blast.[27] This omission violated federal law, but the United States was not the real victim. By writing a check to the U.S. Treasury, West Fertilizer did nothing to heal or rebuild the community in the wake of tragedy.

The Speeding Ticket approach improperly implies that depositing monetary penalties into a State’s general fund will compensate injured communities. A recent controversial settlement between the New Jersey Department of Environmental Protection (NJDEP) and Exxon illustrates how this approach cuts out the most important stakeholders.

In 2004, NJDEP brought an enforcement action against Exxon claiming injury for over a century of unlawful natural resources destruction arising out of two oil refineries.[28] Exxon conceded liability for the cost of restoring these natural resources, and a state judge found Exxon strictly liable for these costs in summary judgment,[29] leaving only the questions of the penalty amount. NJDEP sought $8.9 billion for the cleanup: $2.5 billion for primary restoration of the properties and $6.4 billion to restore wetlands and forestlands the facilities’ pollution damaged.[30] After a decade of failed negotiations, the State settled for $225 million—less than three cents on the dollar.[31] Worse still, the Christie Administration had passed a temporary budget provision the previous year authorizing diversion of $175 million from the settlement to reduce the state’s budget deficit.[32] The loophole was set to expire at the end of the fiscal year, making prompt settlement necessary to ensure the state could redirect funds to boost its budget figures.[33] The Governor’s office ensured most of the largest environmental enforcement settlement in New Jersey’s history went from restoring overburdened communities to supplementing the administration’s ledger.[34]

The Speeding Ticket settlement model fails to ensure justice because it frames the settlement process as a battle between government bureaucrats and corporate defense lawyers. The model takes for granted the penalty should be in the form of a fine paid to the government. Moreover, the model provides injured parties no means of redress and fails to facilitate communication between stakeholders. Recognizing the Speeding Ticket model’s inadequacy, state and federal agencies have utilized SEPs to improve settlement outcomes.

III. UNPACKING THE FEDERAL AND CALIFORNIA SEP POLICIES

Several agencies have developed unique SEP policies.[35] Here, I examine the EPA and Cal EPA policies, both newly updated in 2015. This Part highlights several similarities and difference between the policies. I proceed to deconstruct the two approaches and identify potential opportunities for improvement in Part IV.

A. EPA’s New SEP Policy

In early 2015, EPA updated its SEP policy for the first time since 1998, incorporating several wholly new aspects.[36] The policy defines a SEP as “an environmentally beneficial project or activity that is not required by law, but that a defendant agrees to undertake as part of the settlement of an enforcement action.”[37] The policy requires an analysis of each individual element to define the universe of eligible projects.

First, an eligible SEP must be “environmentally beneficial,” in that it must “improve, protect or reduce risks to public health or the environment.”[38] Second, the defendant must undertake the project, “in settlement of an enforcement action.”[39] In other words, the SEP must arise out of the settlement negotiation process, with opportunity for EPA to comment before the agency approves the settlement.[40] Third, EPA prevents double-counting by excluding project a defendant must perform anyway.[41]

Additionally, the project must have a sufficient nexus to the violation[42] by reducing the likelihood of similar future violations or harms (subject-matter nexus).[43] Projects also should benefit the geographic area where the violation occurred (geographic nexus).[44] As Part IV illustrates, choice of nexus requirement significantly affects how directly corrective a SEP policy is. Stricter nexus requirements better comport with restorative justice by ensuring SEPs more directly address the violation and victims themselves.

The policy promotes environmental and restorative justice goals by emphasizing and seeking community input in settlement agreements, striving to incorporate involvement of populations historically left unheard through the settlement process. The policy states that the agency “should encourage input on project proposals from the local community that may have been adversely impacted by the violations,” and to solicit that input “as early in the SEP development process as possible.”[45] Further, EPA personnel assigned to the case who happen to be “aware of community interest in particular SEPs . . . should feel free to share that information with the defendant.”[46] However, the policy offers no means for EPA personnel or defendants to become aware of such information. Confidentiality concerns constrain the agency from reaching out to community stakeholders.[47]

EPA also must comply with a statute that treats adjusting settlements after issuing a consent decree like stealing from the U.S. Treasury.[48] The Miscellaneous Receipts Act (MRA) requires that “an official or agency of the Government receiving money for the Government from any source shall deposit the money in the Treasury as soon as practicable without deduction.”[49] For generations, whether an agency could credit a SEP’s value against the penalty amount in a settlement remained unclear.[50]

The Comptroller General issued a declaration in 1993 clarifying that MRA allowed enforcement agencies to “adjust penalties to reflect . . . concessions exacted from the violator.”[51] In other words, agencies could credit defendants for community projects included in settlement agreements. The catch was timing.[52] The rule allows EPA to approve a SEP before negotiating a lower settlement amount to offset the costs of the SEP.[53] This workaround functions because the agency never “received” the money spent on the SEP, so the Treasury had no claim to it.[54] Once the agency and defendant finalize the settlement and enter into a consent decree, the full penalty amount must go to the Treasury.[55] Confidentiality concerns limit the agency’s ability to communicate about settlement negotiations so once negotiations produce a final agreement, the MRA bars EPA from changing the SEP to reflect community feedback.

B. Cal EPA’s SEP Policy: AB 1070

In late 2015, the California Legislature passed AB 1071, requiring Cal EPA to issue a new SEP policy.[56] The statute declares, “environmental justice communities,” which “are located in areas disproportionately impacted from multiple sources of pollution,” need additional resources devoted to supporting “community-led solutions” to their environmental health woes.[57] SEPs serve to provide “direct environmental and public health benefits” in these communities.[58] AB 1071 directs Cal EPA to “focus on . . . engaging community-based organizations through an accessible and open public process.”[59]

To achieve these objectives, Cal EPA must establish a SEP policy that includes four key provisions.[60] First, the policy must create a public process to solicit potential SEPs from “disadvantaged communities.”[61] Cal EPA may assign “disadvantaged community” status based on socioeconomic factors, but the underlying statute does not mention indicators like race, ethnicity, or national origin.[62] Second, AB 1071 replaced Cal EPA’s 25 percent maximum recommended portion of the total settlement amount the agency may dedicate to a SEP[63] with a 50 percent hard cap.[64] Third, Cal EPA must publish an annual list of potential SEP options online.[65] Fourth, Cal EPA must consider the relationship between the violation’s location and the proposed SEP.[66]

IV. RECOMMENDATIONS

A. General Restorative Justice Priorities

Restorative justice principles provide three general prescriptions for SEPs. First, a SEP should correspond to the type of harm the violation caused (subject-matter nexus). Second, a SEP policy should target SEP benefits on the community the violation harmed or threatened (geographic nexus). Third, a SEP policy should enable members of the affected community to directly participate in the SEP.

Restorative justice requires subject-matter nexus. The more closely the SEP’s benefits track the associated violation’s harm, the more directly the SEP corrects for the violation. Agencies should premise SEP-eligibility on direct responsiveness to the harm. Stringent subject-matter nexus requirements hold a defendant to the corrective aspect of restorative justice.

Geographic nexus similarly furthers restorative justice’s corrective ends. In the fertilizer factory case, a SEP proposing to improve air quality in Houston would do nothing for West. Enforcing a strict geographic nexus better achieves the corrective result upon which restorative justice is premised.

Restorative justice’s participation element dictates a SEP policy should provide affected communities with a forum to represent their interests. The Speeding Ticket model’s fails, in part, because it falsely supposes the government adequately represents victims’ interests. By contrast, restorative justice maintains a harmful act is wrongful not because it violates the law, but because it hurts victims.[67] A SEP policy cannot force the State to better represent the interests of its environmental justice communities, but it can give affected communities a forum to assert their needs and invite offenders to collaborate in the healing process. Restorative justice prescribes an agency must embrace affected communities’ participation and incorporate offenders into efforts to correct harms.

B. Recommendations For EPA

i. Corrective Elements

The EPA SEP policy’s strict nexus requirement sets it apart from AB 1071 as a corrective model. EPA requires that an eligible project have a “sufficient nexus” to the violation itself.[68] However, the agency’s environmental justice criterion for evaluating proposed SEPs leaves out crucial factors in identifying harm. For example, social identity factors are absent from the policy. The agency need only consider whether a community “may have been disproportionately exposed to pollution or is at environmental risk.”[69]

The first step in correcting a harm is identifying it. Thus, the policy’s goal to remediate harm in historically overburdened communities comports with restorative justice, but its silence on social identity factors understates these communities’ vulnerabilities. Environmental justice communities not only suffer greater pollution.[70] They also suffer other risks due to generations of environmental racism and classism, which track factors like race and poverty.[71] The agency cannot adequately evaluate a project’s corrective potential without considering the community’s historical pollution burden when it evaluates environmental and public health vulnerability.[72] To remedy this, I suggest EPA expressly incorporate social identity factors associated with increased environmental health risk into its environmental justice criterion for evaluating SEP proposals.

ii. Participation Elements

EPA’s SEP policy largely fails to foster participation by providing a strictly one-way line of communication. The defendant may reach out to community members for information during settlement negotiations, but the public has no forum to provide this information until after the settlement’s terms are set. EPA’s policy calls for “meaningful involvement,”[73] but the policy lacks a mechanism to bring about such involvement. Moreover, the policy provides no system to seek SEP ideas from the public. The agency solicits public comments on already-negotiated settlement agreements,[74] but the agency stops considering changes before the public comment period begins.[75] As a result, EPA’s SEP policy provides only the appearance of public participation. Accordingly, I recommend that EPA develop a process for local advocates to make their communities’ needs known before an enforcement action arises.

The current system provides no means to connect defendants with firms who would perform SEPs. Without a forum for soliciting and maintaining SEP proposals from the public, the burden of developing SEP ideas falls squarely on the defendant and the EPA attorney. Both parties want to settle the matter expediently and are not necessarily inclined incentivized to invest the effort necessary to devise a well-designed SEP during negotiation. Rather than rely on the settling parties to assemble a SEP proposal, EPA should maintain an up-to-date online repository of potential partner organizations and SEP proposals.[76]

In fact, EPA considered exactly such a database—regional SEP “banks” or “libraries”—in a 2000 interim guidance document.[77] EPA dropped this effort, finding it redundant with another database called Enforcement and Compliance History Online (ECHO).[78] ECHO provides the agency and public with information on past settlements.[79] ECHO’s breadth is impressive, but it lacks depth and provides only generic descriptions of past approved SEPs.[80] This information can aid those seeking general information, but every enforcement action presents unique considerations. Rough overviews of past settlements offer little to inspire ideas tailored to a particular community’s needs. ECHO looks backward. I suggest the agency develop a forward-looking database.

To develop such a database, EPA can draw on several existing examples. EPA Region 1 maintains a SEP library[81] in “black box” form; the webpage provides contact information and instructions for submitting proposals.[82] However, it offers no way for the public to view other proposals for guidance. A submitter cannot see her own submission to ensure its availability without contacting the agency. This interface holds the program back.

Instead, I recommend an online format modeled after the Illinois EPA’s (IEPA) “Idea Bank.”[83] Via an online tool, environmental services providers can submit SEP proposals, including the project descriptions, expected environmental benefits, estimated cost, regional availability, and contact information.[84] IEPA posts all valid submissions on the webpage. It also keeps the database current by deleting old submissions. The only drawback is the Ideas Bank does not have a space for community advocates to propose projects.

Each EPA enforcement region should adopt a publicly available SEP library modeled after IEPA’s Ideas Bank, though I suggest a few modifications. First, the agency should add community organizations’ SEP ideas alongside those of environmental services contractors. Second, EPA should delete outdated posts as IEPA does but should notify submitters annually and request updates to outdated submissions.

C. California

AB 1071 holds Cal EPA to a higher standard in facilitating community participation but undermines corrective justice by allowing the agency to stretch the connection between the SEP and the violation. Cal EPA has yet to issue regulations implementing AB 1071. Though this Part criticizes some specific policy choices the legislature made in drafting AB 1071, these recommendations address issues left open for Cal EPA to resolve in implementation.

i. Participation Elements

AB 1071’s public participation mandates are a potential strength, requiring Cal EPA to create a public process for engaging community organizations,[85] solicit SEP proposals from disadvantaged communities,[86] and compile candidate projects into an annual list on its website.[87] This list speaks to the same themes discussed in the federal EPA analysis, so similar recommendations are appropriate. However, the AB 1071 framework raises a participation concern. AB 1071 only requires Cal EPA to facilitate participation from designated disadvantaged communities. This is antithetical to a restorative justice framework, which asks for equal application anywhere a violation harms a community. Accordingly, I recommend Cal EPA not overlook communities it would not designate as disadvantaged.

ii. Corrective Elements

AB 1071 raises two causes for concern. First, AB 1071 requires caps credit for SEPs at half the penalty amount,[88] meaning that at least half would go to the California Treasury, a discretionary fund. I disapprove of the legislature’s seemingly arbitrary limit.

Second, AB 1071 lacks a firm nexus standard.[89] Cal EPA’s nexus requirement is looser than EPA’s. It recommends that projects should have an “adequate nexus” to the violation, whereas the federal EPA’s policy requires that projects must have such a nexus.[90] The act emphasizes SEPs’ value to disadvantaged communities, but it does not limit SEPs to those communities. It gives Cal EPA a choice: consider geographic nexus as a factor or as a requirement.

Cal EPA’s first option is to go no further than to treat geographic nexus as a factor. This approach maximizes Cal EPA’s discretion. A defendant aware of a SEP opportunity in Watts could contribute for credit against her penalty for a violation in Richmond. This approach would encourage community organizers to compete, devising more compelling SEP ideas that might stand out on projects lists. Troublingly, it would allow the defendant to allocate benefits to a community that, though classified as disadvantaged, experienced no direct impact from the underlying violation. A competitive SEP market may create perverse incentives by advantaging communities with representatives better positioned to appeal to defendants.

Cal EPA could impose a nexus requirement only for violations in disadvantaged communities as a middle road approach. A nexus requirement serves both a disadvantaged community and the community where the violation occurred. A defendant still could perform a SEP in a disadvantaged community. Under no circumstances could Cal EPA credit a defendant for performing a project in a community not designated as disadvantaged.

This approach appeals to some because it allocates environmental benefits to communities that suffer the greatest environmental harms. Proponents would argue regardless of where a violation occurred, disadvantaged communities need SEPs more than non-disadvantaged communities do.

The restorative justice model prescribes otherwise. Restorative justice emphasizes the rehabilitative value of a defendant cooperating within the actually harmed community. Restorative justice principals require a SEP have a strong nexus. Accordingly, I advise Cal EPA to impose a strict nexus requirement similar to the federal EPA’s standard.

CONCLUSION

A corrective and inclusive SEP policy offers true reparation. Though the foregoing analysis has focused on two SEP policies’ imperfections, these agencies do not have to provide for SEPs. The Speeding Ticket Model asks less of them. SEPs are major undertakings and require significant efforts from the agency. The very existence of these SEP policies marks substantial progress in incorporating restorative justice into environmental enforcement efforts. These SEP policies reflect important and admirable efforts.

These two agencies have refined their SEP policies as tools to achieve justice, but the mission continues. After generations of neglect, healing the relationship between government, polluters, and communities living with the toxic legacy of environmental injustice will take time and effort. I hope these recommendations will contribute to the ongoing conversation shaping enforcement agencies’ role in achieving environmental justice, an objective that is as noble as it is elusive.

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[1] Supplemental Environmental Projects (SEPs), EPA, http://www2.epa.gov/enforcement/supplemental-environmental-projects-seps (last updated February 9, 2016).

[2] Id.

[3] Id.

[4] See generally Ctr. for Justice & Reconciliation, Prison Fellowship Intl., What Is Restorative Justice? (2005), http://www.d.umn.edu/~jmaahs/Correctional%20Assessment/rj%20brief.pdf (explaining restorative justice).

[5] For a brief history of the “Tough on Crime” movement in American politics, see V.F. Nourse, Rethinking Crime Legislation: History and Harshness, 39 Tulsa L. Rev. 925, 928–37 (2004).

[6] E.g., Whitley R.P. Kaufman, Honor and Revenge: A Theory of Punishment (2012).

[7] E.g., Michelle Alexander, The New Jim Crow: Mass Incarceration in the Age of Colorblindness (2012); Race, Crime, & Punishment: Breaking the Connection in America (Keith O. Lawrence ed., 2011), http://www.aspeninstitute.org/sites/default/files/content/docs/pubs/Race-Crime-Punishment.pdf; Walker Newell, The Legacy of Nixon, Reagan, and Horton: How the Tough on Crime Movement Enabled a New Regime of Race-Influenced Employment Discrimination, 15 Berkeley J. Afr.-Am. L. & Pol’y 3 (2013); Jonathan D. Glater, Race Gap: Crime vs. Punishment, N.Y. Times (Oct. 7, 2007), http://www.nytimes.com/2007/10/07/weekinreview/07glater.html.

[8] E.g., Zvi D. Gabbay, Justifying Restorative Justice: A Theoretical Justification for the Use of Restorative Justice Practices, 2 J. Dispute Resolution 349, 353, 364 (2005).

[9] E.g., Deirdre Golash, The Case Against Punishment: Retribution, Crime Prevention, and the Law (2005); James P. Lynch & William J. Sabol, Urban Inst., Did Getting Tough on Crime Pay? (1997), http://www.urban.org/research/publication/did-getting-tough-crime-pay/view/full_report; James Gilligan, Punishment Fails. Rehabilitation Works., N.Y. Times (Dec. 19, 2012, 11:43 AM), http://www.nytimes.com/roomfordebate/2012/12/18/prison-could-be-productive/punishment-fails-rehabilitation-works.

[10] Jacqueline J. Larsen, Aus. Inst. Criminology, Restorative Justice in the Australian Criminal Justice System 1–2 (2014), http://www.aic.gov.au/media_library/publications/rpp/rpp127.pdf.

[11] Restorative Justice Principles and Values, Correctional Serv. Can., http://www.csc-scc.gc.ca/restorative-justice/003005-0006-eng.shtml (last updated Aug. 7, 2012).

[12] See id.

[13] Id.

[14] Id.

[15] Restorative Justice, Ctr. for Justice & Reconciliation, http://restorativejustice.org/restorative-justice/ (last visited Oct. 21, 2015).

[16] Ernest J. Weinrib, The Gains and Losses of Corrective Justice, 44 Duke L.J. 277, 277 (1994).

[17] Restorative Justice Principles and Values, supra note 11.

[18] Id.

[19] Larsen, supra note 10, at 23–28.

[20] See Mark S. Umbreit et al., Ctr. for Restorative Justice & Peacemaking, The Impact of Restorative Justice Conferencing: A Review of 63 Empirical Studies in 5 Countries 10 (2002), http://www.cehd.umn.edu/ssw/RJP/Projects/Victim-Offender-Dialogue/Restorative_Group_Conferencing/Impact_RJC_Review_63_Studies.pdf (finding the results of several victim-offender mediation studies demonstrated reduced recidivism in participating offenders).

[21] See id. at 2–3 (inferring from meta-analysis of restorative justice mediation studies that increased victim participation accounted for at least some of victims’ higher satisfaction rates with the outcomes of certain mediation models).

[22] E.g., The Consequences of Climate Change, NASA, http://climate.nasa.gov/effects/ (last updated Dec. 17, 2015); Abby Phillip, Which U.S. Cities are the Most Vulnerable to the Impact of Climate Change?, Wash. Post (May 6, 2014), https://www.washingtonpost.com/news/post-nation/wp/2014/05/06/which-u-s-cities-are-the-most-vulnerable-to-the-impact-of-climate-change/; Planning for Changing Sea Levels, U.S. Army Corp Eng’rs, http://www.corpsclimate.us/Sandy/ (last visited Dec. 15, 2015).

[23] See, e.g., Envtl. Justice & Health Alliance for Chem. Policy Reform, Who’s in Danger?: Race, Poverty, and Chemical Disasters (2014), http://www.comingcleaninc.org/assets/media/images/Reports/Who’s%20in%20Danger%20Report%20and%20Table%20FINAL.pdf; Rachel Massey, Environmental Justice: Income, Race, and Health (2004), http://www.ase.tufts.edu/gdae/education_materials/modules/Environmental_Justice.pdf; Bob Bolin et al., The Geography of Despair: Environmental Racism and the Making of South Phoenix, Arizona, USA, 12 Human Ecology Rev. 156 (2005); Steve Wing et al., Environmental Injustice in North Carolina’s Hog Industry, 108 Envtl. Health Perspectives 225 (2000); Cheryl Katz & Envtl. Health News, People in Poor Neighborhoods Breathe More Hazardous Particles, Sci. Am. (Nov. 1, 2012), http://www.scientificamerican.com/article/people-poor-neighborhoods-breate-more-hazardous-particles/; see also Overview of Demographic Indicators in EJSCREEN, EPA, http://www2.epa.gov/ejscreen/overview-demographic-indicators-ejscreen (last updated June 9, 2015).

[24] Robert Esworthy, Cong. Research Serv., RL34384, Federal Pollution Control Laws: How Are They Enforced? 27 (2014).

[25] Bill Chappell, Death Toll in West, Texas, Fertilizer Explosion Rise to 15, Nat’l Pub. Radio (Apr. 23, 2013), http://www.npr.org/sections/thetwo-way/2013/04/23/178678505/death-toll-in-west-texas-fertilizer-explosion-rises-to-15.

[26] M.B. Pell et al., Special Report: Poor Planning Left Texas Firefighters Unprepared (May 22, 2013, 9:41 PM), http://www.reuters.com/article/2013/05/23/us-chemical-emergency-specialreport-idUSBRE94L19020130523.

[27] Id.

[28] Benjamin Weiser, Exxon Settles $9 Billion Pollution Case in New Jersey for Far Less, N.Y. Times (Feb. 27, 2015), http://www.nytimes.com/2015/02/28/nyregion/exxon-mobil-settles-with-new-jersey-over-environmental-damage.html.

[29] N.J. Dep’t of Envtl. Prot. v. Exxon Mobil Corp., 923 A.2d 345, 351 (N.J. Super. Ct. App. Div. 2007).

[30] S.P. Sullivan, State Announces Settlement in Controversial Exxon Mobil Pollution Case, NJ.com (Mar. 5, 2015, 3:16 PM), http://www.nj.com/news/index.ssf/2015/03/state_announces_settlement_in_controversial_exxon.html.

[31] S.P. Sullivan, N.J. Senate Condemns Christie’s Exxon Settlement, NJ.com (Mar. 16, 2015, 4:29 PM), http://www.nj.com/politics/index.ssf/2015/03/state_senate_condemns_christies_exxon_settlement.html.

[32] David Sirota, Chris Christie Backed Law that Lets Him Divert ExxonMobil Settlement from Environmental Cleanup, Intl. Bus. Times (Feb. 27, 2015, 10:27 PM), http://www.ibtimes.com/chris-christie-backed-law-lets-him-divert-exxonmobil-settlement-environmental-cleanup-1831558.

[33] Id.

[34] Id.; State of New Jersey, The Governor’s FY 2015 Budget, at D-126 (2014), http://www.state.nj.us/treasury/omb/publications/15budget/pdf/FY15BudgetBook.pdf.

[35] E.g., Supplemental Environmental Projects, Va. Code Ann. § 10.1-1186.2 (2015); Colo. Dep’t of Pub. Health & Env’t, Final Agency-Wide Supplemental Environmental Projects Policy (2008), https://www.colorado.gov/pacific/sites/default/files/DEHS_SEP_DeptPolicy.pdf; Conn. Dep’t of Envtl. Prot., Policy on Supplemental Environmental Projects (1996), http://www.ct.gov/deep/lib/deep/enforcement/policies/seppolicy.pdf; Ind. Dep’t of Envtl. Mgmt., Fact Sheet: Supplemental Environmental Projects (SEPs) (2011), http://www.in.gov/idem/files/factsheet_sep.pdf; Mass. Dep’t of Envtl. Prot., Policy on Supplemental Environmental Projects (2009), http://www.mass.gov/eea/docs/dep/service/seppol07.pdf; Ohio EPA, Supplemental Environmental Protection Guidance (2006), http://www.epa.ohio.gov/portals/35/swerp/sep_guidance_dec06.pdf; Supplemental Environmental Projects, Ill. EPA, http://www.epa.illinois.gov/topics/compliance-enforcement/sep/index (last visited Nov. 9, 2015).

[36] EPA, U.S. Environmental Protection Agency Supplement Environmental Projects Policy 2015 Update 1 (2015), http://www2.epa.gov/sites/production/files/2015-04/documents/sepupdatedpolicy15.pdf.

[37] Id.

[38] Id. at 6.

[39] Id.

[40] Id.

[41] Id. at 6–7; see id. at 1.

[42] Id. at 7–8.

[43] Id.

[44] Id.

[45] Id. at 18.

[46] Id.

[47] Id. at 19–20; see 40 C.F.R. §§ 2.201–2.311.

[48] See Act of March 3, 1849, 31 U.S.C. § 3302(b) (2012); see also Andy Spalding, The Much Misunderstood Miscellaneous Receipts Act (Part 1), FCPA Blog (Sept. 30, 2014, 1:28 AM), http://www.fcpablog.com/blog/2014/9/29/the-much-misunderstood-miscellaneous-receipts-act-part-1.html (introducing the complications this statutory language imposes on agencies looking to incorporate SEPs into settlement agreements).

[49] Act of March 3, 1849, 31 U.S.C. § 3302(b).

[50] Andy Spalding, The Much Misunderstood Miscellaneous Receipts Act (Part 2), FCPA Blog (Sept. 30, 2014, 1:28 AM), http://www.fcpablog.com/blog/2014/9/30/the-much-misunderstood-miscellaneous-receipts-act-part-2.html.

[51] Memorandum from James F. Hinchman, Comptroller Gen. of the U.S., to John D. Dingell, Chairman, Subcomm. on Oversight & Investigations, House Comm. on Energy & Commerce 1 (Mar. 1, 1993), http://www.gao.gov/assets/200/195921.pdf.

[52] See Spalding, supra note 52.

[53] See id.

[54] See id.

[55] See id.

[56] A.B. 1071, 2015–16 Leg., Reg. Sess. (Cal. 2015).

[57] §§ 1(a)(1)–(2).

[58] § 1(a)(3).

[59] § 1(b).

[60] See § 2(b).

[61] §§ 2(a)(2), (b)(1); see Cal. Health & Safety Code § 39711 (West 2015).

[62] Health & Safety § 39711.

[63] Cal. EPA, Cal/EPA Recommended Guidance on Supplemental Environmental Projects 7 (2003), http://www.calepa.ca.gov/Enforcement/Policy/SEPGuide.pdf.

[64] A.B. 1071 § 2(b)(2).

[65] §§ 2(b)(3), (c).

[66] § 2(b)(4).

[67] Ctr. for Justice & Reconciliation, supra note 4, at 1.

[68] EPA, supra note 37, at 7.

[69] Id. at 20.

[70] Jason Corburn, Environmental Justice, Local Knowledge, and Risk: The Discourse of a Community-Based Cumulative Exposure Assessment, 29 Envtl. Mgmt. 451, 456 (2002).

[71] See id.

[72] See id.

[73] EPA, supra note 37, at 3.

[74] Id. at 4.

[75] Interim Guidance for Community Involvement in Supplemental Environmental Projects, 68 Fed. Reg. 35,884, 35,885 (June 17, 2003).

[76] Further, the EPA’s website is overdue for an overhaul in general.

[77] Draft EPA Guidance for Community Involvement in Supplemental Environmental Projects, 65 Fed. Reg. 40,639, 40,641 (June 30, 2000).

[78] E-mail correspondence with Beth Cavalier, Analyst, EPA Office of Civil Enforcement, Special Litigation & Projects Div. (Nov. 13, 2015) (on file with author).

[79] Id.

[80] E-mail correspondence with Assoc. Reg’l Counsel, EPA Office of Reg’l Counsel, Region 5 (Nov. 16, 2015) (on file with author).

[81] Supplemental Environmental Projects (SEPs) Library, EPA, http://pubweb.epa.gov/region1/enforcement/sep/index.html (last updated May 9, 2014).

[82] See id.

[83] See Supplemental Environmental Projects, Ill. EPA, http://www.epa.illinois.gov/topics/compliance-enforcement/sep/index (last visited Nov. 9, 2015); see also SEP Idea Bank Instructions, Ill. EPA, http://www.epa.illinois.gov/topics/compliance-enforcement/sep/instructions/index (last visited Nov. 9, 2015).

[84] See Project Deposit Form, Ill. EPA, http://www.epa.state.il.us/cgi-bin/en/sep/sep.pl (last visited Nov. 9, 2015) (SEP proposal submission form).

[85] A.B. 1071 § 1(b).

[86] § 2(b)(1).

[87] §§ 2(b)(3), (c).

[88] § 2(b)(2).

[89] EPA, supra note 37, at 7 n.8.

[90] See Cal. EPA, supra note 65, at 3.

This post is part of the Environmental Law Review Syndicate, a multi-school online forum run by student editors from the nation’s leading environmental law reviews.

__________________________________________

By Brenden Cline, Editor-in-Chief of Harvard Environmental Law Review

[This] is a ‘rare case.’ It is and should be . . . . But every generation or so a case comes along when this Court needs to say enough is enough.

— Chief Justice Roberts[1]

 

As my law school graduation nears, I’d like to advance a common-sense argument for the Clean Power Plan’s statutory authority that only a law student could make: the D.C. Circuit and Supreme Court should reject EPA’s and challengers’ strained readings of the duplicative amendments to Clean Air Act section 111(d) and instead follow the late Justice Scalia’s “irreconcilability canon” to give these amendments no effect. To date, just one brief filed in the torrent of Clean Power Plan litigation mentions the irreconcilability canon in passing.[2] I think this interpretive tool warrants more attention.

So quit the jiggery-pokery, put down the applesauce, and take your head out of a bag. Justice Scalia may no longer be with us, but his immortal words endure.

Background

EPA issued the Clean Power Plan last October to cut greenhouse gas emissions from the nation’s aging fleet of coal-fired power plants. President Obama relied on these projected emissions reductions in negotiating December’s landmark Paris Agreement on climate change. Needless to say, the Clean Power Plan is a big deal.

EPA grounds its authority for this monumental regulation in section 111(d) of the Clean Air Act. Before the 1990 Clean Air Act Amendments, that provision required EPA to regulate “any air pollutant”—subject to a few irrelevant limitations—“which is not included on a list published under section . . . [112](b)(1)(A).”[3] Greenhouse gases are not listed under section 112 (the hazardous air pollutant program), so the original provision would have authorized the Clean Power Plan.

But section 111(d) was amended with a once-in-a-lifetime drafting error. The 101st Congress spent its full term developing the 1990 Clean Air Act Amendments, leaving no time for the House Office of Legislative Council to use its primitive computer software to check the bill for overlapping amendments.[4] As a result, the 1990 Amendments were signed into law with “numerous errors, internal inconsistencies, and bad cross-references,”[5] including two different updates to section 111(d).

One amendment, originating in the House bill, commands:

          strik[e] “or 112(b)(1)(A)” and insert[] “or emitted from a source category which is regulated under section 112.”[6]

The other amendment, originating in the Senate bill, says:

          strik[e] “112(b)(1)(A)” and insert[] in lieu thereof “112(b).”[7]

On its own, the unclear House amendment could be read to block the Clean Power Plan entirely since coal-fired power plants are source categories regulated under section 112.[8] The Senate amendment, on the other hand, plainly preserves the status quo and authorizes the Clean Power Plan. These Schrödinger’s amendments are “the stuff of a bizarre law school exam.”[9] Unfortunately, the fate of the international climate change agreement may hang on this twenty-six-year-old typo.

EPA makes a strong case for interpreting the two amendments “harmoniously” so that both provisions have the same meaning in context and support the Clean Power Plan.[10] Petitioners argue that the House amendment controls and prohibits “double regulation” of sources under sections 111(d) and 112, forbidding the Clean Power Plan. In the alternative, they insist that the amendments should be added to exclude both air pollutants listed under 112(b) and all pollutants “emitted from a source category which is regulated under section 112.” I have argued elsewhere that petitioners’ interpretations are disingenuous because the section 112(d)(7) savings clause explicitly requires such “double regulation,” and adding these two amendments would make the section 111(d) exceptions swallow the rule.[11] Here, I contend that the D.C. Circuit and Supreme Court should follow another path to interpreting section 111(d).[12]

Ready the Canons

In 2012, Justice Scalia and Bryan Garner collected fifty-seven principles of statutory construction in Reading Law: The Interpretation of Legal Texts. Since then, Chief Justice Roberts[13] and Justices Kennedy,[14] Alito,[15] Sotomayor,[16] and Kagan[17] have cited this treatise in their opinions.

Several of these canons of construction support EPA’s reading of section 111(d). For example, the “harmonious-reading canon” says “[t]he provisions of a text should be interpreted in a way that renders them compatible, not contradictory.”[18] The “presumption against ineffectiveness” holds that “[a] textually permissible interpretation that furthers rather than obstructs the document’s purpose should be favored.”[19] The “whole-text canon” declares that “[t]he text must be construed as a whole.”[20] And the “presumption against implied repeal” says that repeals by implication are “very much disfavored.”[21]

A few canons favor the challengers. The “omitted-case canon” asserts that “[n]othing is to be added to what the text states or reasonably implies,”[22] challenging EPA’s reading of the House amendment. Also, the “harmonious-reading canon” could conceivably be used to add the two amendments together.

Overall, however, petitioners and their amici rely on nontextual interpretive methods. They focus on a congressional record purportedly showing Senate Managers intending to “recede” to the House amendment before mistakenly enacting both amendments, running headlong into Scalia and Garner’s “supremacy-of-text principle.”[23] Moreover, this reliance on legislative history violates the “constitutional requirements of nondelegability, bicameralism, presidential participation, and the supremacy of judicial interpretation.”[24] Led by West Virginia, petitioners also ignore the “desuetude canon” in asserting that EPA’s infrequent use of section 111(d) robs it of power. Ironically, Scalia and Garner point out: “Only West Virginia cases hold that desuetude invalidates.”[25]

Drop It Like It’s Hot

Reading Law also identifies a canon that seems to be custom-tailored to the section 111(d) glitch. The “irreconcilability canon” says: “[i]f a text contains truly irreconcilable provisions at the same level of generality, and they have been simultaneously adopted, neither provision should be given effect.”[26] “When reconciliation of conflicting provisions cannot reasonably be achieved, the proper resolution is to apply the unintelligibility canon . . . and to deny effect to both provisions. After all, if we cannot “make a valid choice between two differing interpretations, . . . we are left with the consequence that a text means nothing in particular at all.”[27] Various authorities have recognized this principle,[28] but “[c]ourts rarely reach this result.”[29]

The section 111(d) drafting error is the rare type of problem that this irreconcilability canon could fairly resolve. As the official legislative history to the 1990 Amendments recognizes: “The amendments . . . appear to be duplicative; both, in different language, change the reference to section 112.”[30] Here, “strike A and insert B” and “strike A and insert C” are obviously at odds, regardless of whether B and C can be read to mean the same thing (as EPA argues) or added (as petitioners argue). Before we can reach the question of harmonizing B and C, we must strike A twice. Since A cannot be deleted more than once, only B or C can subsequently be added. (Imagine the superposition that would result otherwise: “any air pollutant . . . which is not included on a list published under section . . . 1[or emitted]1[from a]2[source category]([which is]b[regulated under])[section 112].”) If the former provision is executed first then we get B; if the latter, we get C. But Scalia and Garner rightly dismiss claims that simultaneously enacted earlier-appearing or later-appearing provisions should prevail because “neither of those positions bears any relationship in the usual case to the text’s probable meaning.”[31] Instead, the solution is that “neither provision should be given effect.”[32]

In my view, the irreconcilability canon empowers the D.C. Circuit and Supreme Court to candidly recognize that the House-Senate conference committee did not reconcile these duplicative amendments the way it should have. What’s more, invoking this canon fosters positive spillover effects. Scalia and Garner write that “restor[ing] sound interpretive conventions. . . . will discourage legislative free-riding, whereby legal drafters idly assume that judges will save them from their blunders.”[33] After all, “[t]he canons influence not just how courts approach texts but also the techniques that legal drafters follow in preparing those texts.”[34] Further, adopting this interpretive principle would respect the Constitution’s separation of powers (“legislators enact; judges interpret”[35]) and could force more legislative deliberation.[36]

This problem of inattentive legislative drafting has gotten worse over time. In 1947, Justice Frankfurter referenced a cartoon “in which a senator tells his colleagues ‘I admit this new bill is too complicated to understand. We’ll just have to pass it to find out what it means.’”[37] Today, statutes are often orders of magnitude more complicated than they were back when the ink was still drying on the Administrative Procedure Act. Indeed, legislation has increasingly taken the form of “unorthodox lawmaking,” which Professor Abbe Gluck describes as “deviations from traditional process marked by frequent use of omnibus bills . . . ; emergency statutes . . . issued without prior comment; outsourcing to lawmaking commissions and unconventional delegates; process shortcuts outside of emergencies; presidential policymaking; and outside drafters, some nonpartisan and others hyperpartisan.”[38]

The section 111(d) issue presents the perfect vehicle for reminding Congress of its responsibility to draft statutes well. Notably, this case avoids the political thicket of the last major case about a clear statutory mistake—King v. Burwell. While respecting Congress’s drafting error in the Affordable Care Act would have brought about “the type of calamitous result that Congress plainly meant to avoid,”[39] doing so in the Clean Power Plan litigation would instead uphold the Clean Air Act’s regulatory scheme, minimize harm to the statute’s text and the U.S. Code, and reach the same result as traditional interpretive methods. The Supreme Court therefore need not downplay Congress’s error like the majority did in King v. Burwell.

First, salvaging section 111(d) would uphold the Clean Air Act’s forty-six-year-old comprehensive regulatory structure. Section 111 is a seldom-used “gap filler” that complements section 110’s regulation of listed criteria air pollutants and section 112’s regulation of about 190 hazardous air pollutants. The Act’s “capacious” definition of “air pollutant” deliberately makes room for scientific advancements that identify new pollutants in the future. Using the irreconcilability canon would thus preserve the Clean Air Act’s symmetrical statutory scheme and further its legislative purpose rather than gut a key provision.

Since the provisions at issue are just overlapping amendments to a carve-out from section 111(d)’s coverage, they can safely be set aside without disrupting the statute. A court could fairly conclude that Congress’s failure to update the cross-reference to section 112(b)(1)(A) was a scrivener’s error that is best read as referring to the redesignated list of hazardous air pollutants in section 112(b).[40] Without such a saving construction, the carve-out would still refer to the nonexistent section 112(b)(1)(A), effacing this exclusion and allowing EPA to regulate listed hazardous air pollutants under section 111(d) if it wanted to. But since the 1990 Amendments’ section 112(d)(1) requires much more stringent “maximum achievable control technology,” the pre-1990 section 112 exclusion is effectively irrelevant anyway.[41] Unlike in King v. Burwell, congressional drafters’ mistake can stand without harming this statute.

Leaving the section 111(d) amendments inoperative also would not disrupt the U.S. Code. Petitioners cite fifty-two different Revisor’s Notes for other instances where the House Office of the Law Revision Counsel found that two overlapping provisions in the U.S. Statutes at Large “could not be executed” and codified into the U.S. Code.[42] But the section 111(d) error appears to be unique.

For example, the first Revisor’s Note cited in petitioners’ February 19, 2016 merits brief “on core legal issues” applies to 11 U.S.C. § 101. That provision has two “could not be executed” errors caused by section 1201(8) of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.[43] Section 1201(8) said to “strike ‘; and’ at the end and insert[] a period” in a number of paragraphs, including 12A and 54A. At the same time, another amendment struck the Bankruptcy Act’s paragraph 12A (which ended in a semicolon), while a third inserted a new version that ended in a period. Separately, a different provision replaced paragraph 54A’s semicolon with a period. These overlapping amendments clearly do not threaten to change the meaning of the Bankruptcy Act. Logically, section 1201(8)’s commands that semicolons be replaced with periods could simply collapse into these other provisions since it completely overlaps with them. That is, “strike A and insert B” is just a subset of “strike A and insert B and C.” That approach would not save section 111(d) though, because its two overlapping amendments say to insert two non-overlapping clauses; merging these amendments would yield “strike A and insert [BC],” a superposition of both B and C at once.

Petitioners’ second Revisor’s Note is equally tame. One amendment to 12 U.S.C. § 4520 struck the title “(A) IN GENERAL.—” while another struck “(a) IN GENERAL.—Each enterprise” and inserted “(e) OUTREACH.—Each regulated entity” (another provision added new subsections (a) through (d) before this).[44] Here, too, we could collapse the former amendment into the latter.

Petitioners’ third Revisor’s Note has the same type of mistake. One amendment to 15 U.S.C. § 2064 would have struck “described in paragraph (3)” and inserted “described in paragraph (1)(C)”, while another would have struck “if the person to whom the order is directed elects to take the action described in paragraph (3)” and replaced it with “if the Commission orders the action described in subparagraph (C)”.[45] Yet again, the former provision could be subsumed into the latter. (Granted, here you have slightly different phrasing with “paragraph (1)(C)” and “subparagraph (C)”, but they unquestionably refer to the same thing—a clearer case of EPA’s harmonious reading method.) Unlike section 111(d), none of these examples involve mutually exclusive Schrödinger’s amendments.

Sure, some of the fifty-two overlapping amendments that petitioners identify may reflect one house of Congress trying to change a provision while the other house sought merely to update it without altering its meaning. But using the irreconcilability canon to make sense of section 111(d) reserves the question of how to resolve those tough issues—if they exist—for another day. In contrast, accepting petitioners’ approach opens the door to challenging all of those drafting mistakes using shreds of legislative history, potentially sparking fifty-two thorny statutory interpretation (or, more accurately, statutory reconciliation) cases. Petitioners’ alternative method of crudely adding up amendments would cause chaos in the overlapping amendments examined above, inserting redundant periods and cross-references. In contrast, EPA’s harmonious reading method reaches the right result for these amendments, but might bind future courts to a flawed harmonized reading where duplicative amendments’ statutory context and legislative history tell a different story.

Last, say what you will about the Clean Power Plan’s other legal merits, but EPA has the upper hand on the section 111(d) glitch. Applying the irreconcilability canon instead and refusing to entertain any party’s “somersaults of statutory interpretation”[46] or legislative history sleights-of-hand would thus still align with the best interpretation those methods reach. Employing the irreconcilability canon would take a mechanistic path to buttress the most faithful interpretation available, not “exploit[]” the statute’s drafting error like the challenge in King v. Burwell.[47]

Conclusion

However the D.C. Circuit and Supreme Court resolve the section 111(d) issue, their rulings will be unprecedented. But the section 111(d) drafting error itself appears to be unprecedented. Thus, instead of running from novelty, these courts should embrace it. Justice Scalia’s irreconcilability canon would resolve the section 111(d) mess and could help turn back the tide of congressional inattention and abdication. After all, as Justice Scalia reminded us in King v. Burwell:

It is not our place to judge the quality of the care and deliberation that went into this or any other law. . . . Much less is it our place to make everything come out right when Congress does not do its job properly. It is up to Congress to design its laws with care, and it is up to the people to hold them to account if they fail to carry out that responsibility.[48]

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[1] Armour v. City of Indianapolis, Ind., 132 S. Ct. 2073, 2087 (2012) (Roberts, C.J., dissenting).

[2] Amicus Curiae Brief of Law Professors in Support of Respondents at 33, In re: Murray Energy Corp., Murray Energy Corp. v. EPA, Nos. 14-1112 & 14-1151 (D.C. Cir. filed Feb. 19, 2015), ECF No. 1538431.

[3] 42 U.S.C. § 7411(d)(1) (1988).

[4] Envtl. Law Inst., Section 111(d): A Historical Perspective, YouTube (July 17, 2014), http://youtu.be/adWz4iBFrbU?t=10m57s.

[5] 1 William H. Rodgers, Jr., Environmental Law § 3:1A n.58 (2014).

[6] Pub. L. No. 101-549, § 108(g), 104 Stat. 2399, 2467 (1990).

[7] Pub. L. No. 101-549, § 302(a), 104 Stat. at 2574.

[8] Every air pollutant is likely “emitted from” at least one of more than a hundred “source categor[ies] which [are] regulated under section 112.”

[9] Alvin Powell, Clean Power Plan’s legal future ‘a mess’, Harvard Gazette (Feb. 26, 2016), http://news.harvard.edu/gazette/story/2016/02/clean-power-plans-legal-future-a-mess/) (quoting Richard Lazarus).

[10] Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662, 64,710–15 (Oct. 23, 2015).

[11] Brenden Cline, Scialabba v. Cuellar De Osorio, 39 Harv. Envtl. L. Rev. 275, 288 (2015).

[12] See Opening Brief of Petitioners on Core Legal Issues, West Virginia v. EPA, No. 15-1363 (D.C. Cir. filed Feb. 19, 2016), ECF No. 1599889. Petitioners focus their energies on how EPA set its greenhouse gas standards, leading with that issue in their opening brief “on core legal issues” in the D.C. Circuit. They use fewer than half as many pages on the threshold issue of EPA’s statutory authority for any greenhouse gas rule. See id.

[13] T-Mobile S., LLC v. City of Roswell, Ga., 135 S. Ct. 808, 820, 190 L. Ed. 2d 679 (2015) (Roberts, C.J., dissenting); Heien v. N. Carolina, 135 S. Ct. 530, 539, 190 L. Ed. 2d 475 (U.S. 2014).

[14] Texas Dep’t of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507, 2520, 192 L. Ed. 2d 514 (2015); Maracich v. Spears, 133 S. Ct. 2191, 2205, 186 L. Ed. 2d 275 (2013).

[15] Johnson v. United States, 135 S. Ct. 2551, 2578, 192 L. Ed. 2d 569 (2015) (Alito, J., dissenting); Texas Dep’t of Hous. & Cmty. Affairs v. Inclusive Communities Project, Inc., 135 S. Ct. 2507, 2539, 192 L. Ed. 2d 514 (2015) (Alito, J., dissenting).

[16] Lockhart v. United States, No. 14-8358, 2016 WL 782862, at *4 (U.S. Mar. 1, 2016); Dep’t of Homeland Sec. v. MacLean, 135 S. Ct. 913, 924, 190 L. Ed. 2d 771 (2015) (Sotomayor, J., dissenting); T-Mobile S., LLC v. City of Roswell, Ga., 135 S. Ct. 808, 817, 190 L. Ed. 2d 679 (2015); Scialabba v. Cuellar de Osorio, 134 S. Ct. 2191, 2220 (2014) (Sotomayor, J., dissenting).

[17] Lockhart v. United States, No. 14-8358, 2016 WL 782862, at *14 (U.S. Mar. 1, 2016) (Kagan, J., dissenting); Yates v. United States, 135 S. Ct. 1074, 1093, 191 L. Ed. 2d 64 (2015) (Kagan, J., dissenting).

[18] Antonin Scalia & Bryan A. Garner, Reading Law 180 (2012).

[19] Id. at 63.

[20] Id. at 167.

[21] Id. at 327. Note that the “surplusage canon” cuts both ways because it condemns interpretations that “needlessly . . . cause[] [a provision] to duplicate another provision or to have no consequence.” Id. at 174.

[22] Id. at 93.

[23] Id. at 56.

[24] Id. at 388.

[25] Id. at 336.

[26] Id. at 189.

[27] Id.

[28] Id. at 189–91; see also Amicus Curiae Brief of Law Professors in Support of Respondents at 33, In re: Murray Energy Corp., Murray Energy Corp. v. EPA, Nos. 14-1112 & 14-1151 (D.C. Cir. filed Feb. 19, 2015), ECF No. 1538431 (citing Reno v. American-Arab Anti-Discrimination Comm’n, 525 U.S. 471, 509, 509 n. 3 (1999) (Souter, J., dissenting); 89 C.J.S. Trial § 992 at 603 (2001)).

[29] Antonin Scalia & Bryan A. Garner, Reading Law 189 (2012).

[30] 1 A Legislative History of the Clean Air Act Amendments of 1990, at 46 (1998).

[31] Antonin Scalia & Bryan A. Garner, Reading Law 189 (2012).

[32] Id.

[33] Id. at xxviii.

[34] Id. at 61.

[35] Id. at xxx.

[36] See, e.g., Abbe R. Gluck & Lisa Schultz Bressman, Statutory Interpretation from the Inside—An Empirical Study of Congressional Drafting, Delegation, and the Canons: Part I, 65 Stan. L. Rev. 901, 943 (2013).

[37] Felix Frankfurter, Some Reflections on the Reading of Statutes, 47 Colum. L. Rev. 527, 545 (1947).

[38] Abbe R. Gluck, Anne Joseph O’Connell & Rosa Po, Unorthodox Lawmaking, Unorthodox Rulemaking, 115 Colum. L. Rev. 1789, 1789 (2015).

[39] King v. Burwell, 135 S. Ct. 2480, 2496 (2015).

[40] See Appalachian Power Co. v. EPA, 249 F.3d 1032, 1044 (D.C. Cir. 2001) (holding that Clean Air Act section 126’s cross-reference to section 110(a)(2)(D)(ii) was a scrivener’s error that EPA may permissibly interpret to refer to section 110(a)(2)(D)(i)).

[41] Section 111(d)’s (contested) authorities to regulate “beyond the fence line” and through cap-and-trade measures have no apparent use for hazardous air pollutants already subject to maximum achievable control technology standards, and EPA is extremely unlikely to its waste resources on ineffective regulations. EPA’s sole attempt to regulate a hazardous air pollutant under section 111(d) failed because the Agency sought to regulate mercury from power plants under section 111(d) instead of section 112 and was rebuffed by the D.C. Circuit. New Jersey v. EPA, 517 F.3d 574 (D.C. Cir. 2008).

[42] State petitioners cite forty-two Revisor’s Notes at a time in three briefs: their amicus brief challenging the proposed Clean Power Plan in 2014, their opening brief “on core legal issues” in the ongoing D.C. Circuit litigation, and their petition for the Supreme Court to stay the rule. These citations fluctuate somewhat between briefs, but in total they include: Revisor’s Note, 5 U.S.C. app. 3 § 12; Revisor’s Note, 7 U.S.C. § 2018; Revisor’s Note, 8 U.S.C. § 1324b; Revisor’s Note, 10 U.S.C. § 869; Revisor’s Note, 10 U.S.C. § 1074a; Revisor’s Note, 10 U.S.C. § 1407; Revisor’s Note, 10 U.S.C. § 2306a; Revisor’s Note, 10 U.S.C. § 2533b; Revisor’s Note, 11 U.S.C. § 101; Revisor’s Note, 12 U.S.C. § 1787; Revisor’s Note, 12 U.S.C. § 4520; Revisor’s Note, 14 U.S.C. ch. 17 Front Matter; Revisor’s Note, 15 U.S.C. § 1060; Revisor’s Note, 15 U.S.C. § 2064; Revisor’s Note, 15 U.S.C. § 2081; Revisor’s Note, 16 U.S.C. § 230f; Revisor’s Note, 18 U.S.C. § 1956; Revisor’s Note, 18 U.S.C. § 2327; Revisor’s Note, 20 U.S.C. § 1226c; Revisor’s Note, 20 U.S.C. § 1232; Revisor’s Note, 20 U.S.C. § 4014; Revisor’s Note, 21 U.S.C. § 355; Revisor’s Note, 22 U.S.C. § 2577; Revisor’s Note, 22 U.S.C. § 3651; Revisor’s Note, 22 U.S.C. § 3723; Revisor’s Note, 23 U.S.C. § 104; Revisor’s Note, 26 U.S.C. § 105; Revisor’s Note, 26 U.S.C. § 219; Revisor’s Note, 26 U.S.C. § 613A; Revisor’s Note, 26 U.S.C. § 1201; Revisor’s Note, 26 U.S.C. § 4973; Revisor’s Note, 26 U.S.C. § 6427; Revisor’s Note, 29 U.S.C. § 1053; Revisor’s Note, 33 U.S.C. § 2736; Revisor’s Note, 37 U.S.C. § 414; Revisor’s Note, 38 U.S.C. § 3015; Revisor’s Note, 39 U.S.C. § 410; Revisor’s Note, 40 U.S.C. § 11501; Revisor’s Note, 42 U.S.C. § 218; Revisor’s Note, 42 U.S.C. § 290bb– 25; Revisor’s Note, 42 U.S.C. § 300ff–28; Revisor’s Note, 42 U.S.C. § 1395u; Revisor’s Note, 42 U.S.C. § 1395x; Revisor’s Note, 42 U.S.C. § 1395ww; Revisor’s Note, 42 U.S.C. § 1396a; Revisor’s Note, 42 U.S.C. § 1396b; Revisor’s Note, 42 U.S.C. § 1396r; Revisor’s Note, 42 U.S.C. § 3025; Revisor’s Note, 42 U.S.C. § 5776; Revisor’s Note, 42 U.S.C. § 9601; Revisor’s Note, 42 U.S.C. § 9875; Revisor’s Note, 49 U.S.C. § 47115.

[43] Pub. L. No. 109-8, 119 Stat. 23 (2005).

[44] Pub. L. No. 110-289, 122 Stat. 2654 (2008).

[45] Pub. L. No. 110-314, 122 Stat. 3016 (2008).

[46] King v. Burwell, 135 S. Ct. 2480, 2507 (2015) (Scalia, J., dissenting).

[47] Abbe R. Gluck, Imperfect Statutes, Imperfect Courts: Understanding Congress’s Plan in the Era of Unorthodox Lawmaking, 129 Harv. L. Rev. 62, 111 (2015) (quoting Am. Enter. Inst., Who’s in Charge? More Legal Challenges to the Patient Protection and Affordable Care Act at 1:33:00, YouTube (Mar. 11, 2014), http://www.youtube.com/watch?&v=C7nRpJURvE4).

[48] King v. Burwell, 135 S. Ct. 2480, 2506 (2015) (Scalia, J., dissenting).

 

This post is part of the Environmental Law Review Syndicate, a multi-school online forum run by student editors from the nation’s leading environmental law reviews.

__________________________________________

By Myles Osborne, General Member of Michigan Journal of Environmental & Administrative Law

 

In late October 2015, the Southern California Gas Company’s Aliso Canyon Natural Gas Storage Facility began spewing natural gas into the air over the San Fernando Valley at a rate of 110,000 pounds per hour.[i] Composed primarily of methane, a “short-lived” climate pollutant[ii] with twenty-five times the global warming impact of carbon dioxide,[iii] the leak effectively doubled the methane emissions rate for the Los Angeles Basin.[iv] With substantial environmental costs and several botched attempts at containment, the leak did not escape comparisons to 2010’s disastrous Deepwater Horizon oil spill[v] as stinking clouds of methane entered the atmosphere, displacing families and businesses in the nearby community of Porter Ranch.

While it took engineers nearly four months to contain the leak, most agree that the crisis could have been averted easily, were it not for California’s outmoded regulatory approach to underground natural gas storage. Adding insult to injury, eleven months prior to the Aliso Canyon leak, the Southern California Gas Company (SoCalGas) seems to have come to the same conclusion. In a report directed to the California Public Utilities Commission in November 2014, SoCalGas acknowledges the dozens of maintenance concerns[vi] in its aging gas storage systems,[vii] ultimately conceding that “without a new inspection plan, SoCalGas . . . could experience major failures and service interruptions from potential hazards that currently remain undetected.”[viii] Yet, despite the precarious state of its storage facilities, at the time it released its report, SoCalGas was in compliance with all California state regulations concerning underground natural gas storage.[ix] That an up-to-code facility could bear responsibility for a methane leak of unprecedented proportions suggests existing regulations warrant review.

While Governor Jerry Brown issued an executive order calling for stricter underground storage regulations in response to the crisis,[x] the proposed measures are largely intended to resolve the Aliso Canyon leak and seem less concerned with averting similar crises in the future. Among the bills under consideration in the California Legislature, S.B. 886 would place an indefinite moratorium on the continued use of Aliso Canyon’s subterranean storage wells.[xi] Akin to measures passed during the Deepwater Horizon spill, S.B. 888 would require SoCalGas to fund the relocation of residents displaced by the leak[xii]—as of February 20, 2016, 4,645 households remain in temporary accommodations,[xiii] while an additional 1,726 have returned home.[xiv] The bill would also hold SoCalGas financially accountable for reducing greenhouse gas emissions proportionate to those released by its faulty facilities.[xv]

Thankfully, additional bills aim to expand government oversight of underground storage practices. Intended to increase the frequency of facilities inspections, S.B. 887 would mandate daily self-inspections[xvi] and more comprehensive agency administered inspections in alternating business quarters.[xvii] If enacted, S.B. 887 would also require utilities to upgrade their leak response and communications plans.[xviii] While policy experts are quick to recognize the significance of this “first step,” many question the efficacy of the emergency legislative package, insisting more must be done to reduce the risk of leaks in California’s vast and aging system of underground gas storage facilities.[xix]

Critics of the pending legislative bundle disparage it as unambitious and too willing to shift accountability for inspections from state agencies to private utilities.[xx] They also cite a variety of safety features— some emerging technologies, others as rudimentary as safety valves[xxi]— that could easily be mandated by statute to more effectively prevent a replay of the events in Aliso Canyon. As is, the current body of regulations requires no specific safety features for natural gas storage facilities except when they are situated within three hundred feet of schools or private homes.[xxii] The legislative proposals would do nothing to change this.

The legislative package introduced in response to the Aliso Canyon leak may soon give Californians greater confidence in the safety of their natural gas storage facilities. Those in neighboring states may have less reason to be hopeful, especially as domestic demand for natural gas continues to surge.[xxiii] While gas storage facilities are subject to oversight by all levels of government, from EPA regulations down to local ordinances, not all facilities are treated equally. Though the EPA has proposed a new rule that would require stricter monitoring of storage facilities vulnerable to leakage,[xxiv] it would apply only to newly-built infrastructure.[xxv] At the state level, gas wells are subject to a patchwork of regulations, which range in scrutiny.[xxvi] In states like Texas and Oklahoma, where there are rigid and comprehensive construction, maintenance, and auditing guidelines for the underground storage of natural gas, strict regulations have emerged in reaction to significant leaks.[xxvii] Where regulations are less firm—as was the case in California—states are unlikely to have experienced a major leak, but they may be inviting one.

 

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[i] Bianca Barragan, New Aerial Video Shows the Terrifying Hugeness of the Porter Ranch Gas Leak, LA Curbed (Dec. 28, 2015, 10:33 AM), http://la.curbed.com/archives/2015/12/porter_ranch_aliso_canyon_gas_leak_aerial_video_size.php.

[ii] Cal. Air Res. Bd., Aliso Canyon Natural Gas Leak: Preliminary Estimate of Greenhouse Gas Emissions to Date (Draft Nov. 20, 2015), http://documents.latimes.com/report-greenhouse-gas-emissions-aliso-canyon-leak/.

[iii] Id. at 2.

[iv] Edward Ortiz, UC Davis scientist key to measuring massive methane leak at Aliso Canyon, The Sacramento Bee (Jan. 7, 2016, 6:05 PM), http://www.sacbee.com/news/local/environment/article53629265.html.

[v] Phil McKenna, California Declares State of Emergency as Leak Becomes Methane Equivalent of Deepwater Horizon, Inside Climate News (Jan. 7, 2016), http://insideclimatenews.org/news/07012016/emergency-declared-california-massive-methane-leak-aliso-canyon-so-cal-evacuations-health-benzene-climate-change.

[vi] See Testimony of Phillip E. Baker, SoCalGas, before the California Public Utilities Commission, SoCalGas 2016 General Rate Case, A.14-11-XXX, Doc. No. 292223, at 17 (Nov. 2014), https://assets.documentcloud.org/documents/2662339/SoCal-Gas-Direct-testimony-of-Phillip-E-Baker.pdf.

[vii] Id. at 20.

[viii] Id. at 25.

[ix] Barragan, supra note 1.

[x] Press Release, Office of Governor Edmund G. Brown Jr., Governor Brown Issues Order on Aliso Canyon Gas Leak (Jan. 6, 2016), https://www.gov.ca.gov/news.php?id=19263.

[xi] S.B. 886, 2015-2016 Leg., Reg. Sess. (Cal. 2016).

[xii] S.B. 888, 2015-2016 Leg., Reg. Sess. (Cal. 2016).

[xiii] Porter Ranch Gas Leak Permanently Sealed: Officials, NBC Los Angeles (Feb. 18, 2016), http://www.nbclosangeles.com/news/local/State-Local-Officials-Announcement–Porter-Ranch-Gas-Leak-369294331.html.

[xiv] Id.

[xv] See S.B. 888 § 2 .

[xvi] S.B. 887, 2015-2016 Leg., Reg. Sess. (Cal. 2016).

[xvii] Id.

[xviii] Id.

[xix] Mike Reicher, In Wake of Porter Ranch-Area Leak, State Proposes Emergency Regulations for Natural Gas Storage, Los Angeles Daily News (Jan. 15 2016, 2:15 PM), http://www.dailynews.com/government-and-politics/20160115/in-wake-of-porter-ranch-area-leak-state-proposes-emergency-regulations-for-natural-gas-storage.

[xx] Id.

[xxi] Id.

[xxii] Samantha Page, California Senate Responds to Natural Gas Leak with Package of Regulatory Legislation, Climate Progress (Jan. 11, 2016, 3:56 PM), http://thinkprogress.org/climate/2016/01/11/3738107/california-legislators-methane-leak/.

[xxiii] The Conversation, California’s Aliso Canyon Methane Leak: Climate Disaster or Opportunity, U.S. News & World Report (Jan. 19, 2016, 1:24 PM), http://www.usnews.com/news/articles/2016-01-19/californias-aliso-canyon-methane-leak-climate-disaster-or-opportunity.

[xxiv] See Oil and Natural Gas Sector: Emission Standards for New and Modified Sources, 80 Fed. Reg. 56,593 (ProposedSept. 18, 2015), https://www.federalregister.gov/articles/2015/09/18/2015-21023/oil-and-natural-gas-sector-emission-standards-for-new-and-modified-sources.

[xxv] Id.

[xxvi] Jack Ehnes, Envtl. Def. Fund, Rising Risk: Improving Methane Disclosure in the Oil and Gas Industry (Jan. 2016), https://www.edf.org/sites/default/files/content/rising_risk_exec_summary.pdf.

[xxvii] For a detailed survey of what these regulations accomplish, see Debra J. Villarreal, Legal Issues in Underground Gas Storage, 27 Energy & Min. L. Inst. ch. 6 (2007), http://www.emlf.org/clientuploads/directory/whitepaper/Villarreal_07.pdf.

This post is part of the Environmental Law Review Syndicate, a multi-school online forum run by student editors from the nation’s leading environmental law reviews.

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By Stacy Shelton, Staff Editor, Vermont Journal of Environmental Law

“If climate change continues unabated and as rapidly as a few models predict, saving at least some species will require solutions more radical than creating parks and shielding endangered species from bullets, bulldozers, and oil spills: It will require moving them.”[1]

 I. Introduction

With millions of gallons of oil gushing into the Gulf of Mexico from a blown-out well in the summer of 2010, the U.S. Fish and Wildlife Service and its partners settled on a Hail Mary plan to save a generation of sea turtles: Translocation. Using specially outfitted FedEx trucks, federal and state biologists moved about 25,000 turtle eggs from Gulf of Mexico beaches to the Kennedy Space Center on Florida’s Atlantic Coast, away from the oil’s path. About half the eggs hatched, and the hatchlings were released into the Atlantic Ocean.[2] In their calculation, the biologists had weighed the risks of reduced hatchling success and interfering with their ability to imprint on natal beaches by moving the turtles against the probability the hatchlings would swim into the oil and certain death if they remained in place.[3]

Today, climate change has biologists working out similar but exponentially more complicated calculations in deciding whether to move species. Instead of simple translocation–which is the human-assisted movement of a species within its historic range[4]—biologists are considering whether the ecological disruptions due to rising temperatures will necessitate moving species outside their historic range as their native habitats become inhospitable. Such assisted movement has been termed “managed relocation,” defined by scientists as the intentional act of moving a species outside its historic range in response to climate change.[5] Similar terms for managed relocation are “assisted migration” and “assisted colonization.”[6] The focus of this paper is on managed relocation and the legal, scientific, and political issues it raises.

Managed relocation is controversial. Ambivalence is reflected at the highest levels of the U.S. Fish and Wildlife Service, the federal agency most responsible for wildlife management at a national scale. In 2009, U.S. Fish and Wildlife Service Director Dan Ashe — who was then the science advisor to the director — said managed relocation is “politically complicated, socially complicated, scientifically complicated, [and] ethically complicated.”[7] Six years later, despite the Service’s 2010 climate change strategy that specifically called for developing a policy for managed relocation, Ashe did not have much more to add. In a recent New York Times article, he said there is no biological or ethical framework for deciding how to manage species in the face of climate change and other impacts.[8] One could argue that job belongs largely to the Service.

That’s not to say there has been no activity. In response to a 2010 Congressional call for action, the Service is co-chairing the National Fish, Wildlife & Plants Climate Adaptation Strategy Partnership along with the National Oceanic and Atmospheric Administration and the New York Division of Fish, Wildlife, and Marine Resources.[9] On the agenda is investigating the legal and policy implications of managed relocation.[10] A committee consisting of the National Park Service, U.S. Fish and Wildlife Service, and U.S. Forest Service is currently examining federal and state agencies’ policies, and is discussing ways to collaborate on a unified policy.[11]

Part II provides necessary background information, including current policies related to managed relocation. Part III discusses solutions, suggesting how the Strategic Partnership committee could move forward. Unlike managed relocation, translocation has a long track record that may portend how managed relocation could proceed. Indeed, translocation data should help answer the most fundamental question of all: will it work?

While the ultimate success of the sea turtle egg transplantation may never be known,[12] other translocations have proven highly successful. Perhaps the best known is that of the gray wolf. In 1995 and 1996, the Service transported 31 gray wolves from Canada to Yellowstone National Park.[13] Today there are more than 1,657 wolves in 282 packs — including 85 breeding pairs — in Montana, Idaho and Wyoming.[14] Many other, lesser known successes are available for study as well. One is the robust redhorse, a sucker fish once thought extinct until a Georgia biologist rediscovered it in 1991. Since then, state and federal biologists have propagated and translocated the fish to Atlantic Slope rivers across Georgia, South Carolina and North Carolina where wild populations are taking hold.

Translocation has worked. Its successes give hope to those counting on managed relocation to maintain biodiversity in a fast-changing climate.

II. Background

A. Why intervene?

The changing climate is already impacting fish and wildlife. In recent years, the Fish and Wildlife Service has cited climate change as a major threat to the survival of many species it has listed under the Endangered Species Act. For example, when the Service listed the red knot bird as threatened in 2014, the agency found climate change is increasing predation rates on red knot eggs and chicks in their Arctic breeding grounds.[15] The problem is a ripple effect: as climate change dampens the lemming population, the arctic fox has begun to prey on the bird.[16] In Florida, more than half of the federally listed species are threatened by sea-level rise, including the endangered Key deer and the Bartram’s scrub-hairstreak butterfly.[17] On the global scale, a study of sample regions covering twenty percent of the Earth’s land surface found fifteen to thirty-seven percent of species will be committed to extinction by 2050 based on mid-range climate change scenarios.[18]

Those grim figures are on top of what some scientists have dubbed the “Sixth Extinction,” the first caused by human activity.[19] Due to development, deforestation and other human-related threats, scientists estimate species’ extinction rates are 50 to 500 times higher than the long-term average, a pace that may increase tenfold as temperatures continue rising.[20] For many resource managers, policymakers, and scientists, climate change is forcing a choice between witnessing mass extinctions and manipulating species’ distributions in order to maintain biodiversity.[21] Camille Parmesan, an early advocate of assisted colonization or managed relocation, contends moving species is the only answer for those that cannot escape to a suitable climate or adapt to the rising temperatures.[22] One of these species is the quino checkerspot butterfly in southern California. As a hotter, drier climate alters their habitat, Los Angeles and its urban offshoots are blocking the butterfly from moving to cooler, wetter climes.[23]

B. Current policies

In 2010, the U.S. Fish and Wildlife Service finalized its climate change strategy in a document titled Rising to the Urgent Challenge: Strategic Plan for Responding to Accelerating Climate Change.[24] In Objective 2.6, the Service set a goal to review laws, regulations and polices to determine what changes may be necessary to support effective adaptation and mitigation responses. The Service identified its primary focus as developing new policies, such as how to handle the managed relocation or translocation of species.[25] The Service has yet to follow through.

Instead, in 2013, the Service, along with the National Oceanic and Atmospheric Administration and state and tribal partners finalized the National Fish, Wildlife, and Plants Climate Adaptation Strategy, another strategy document that lays out more goals.[26] According to the Federal Register notice, the document was designed to “inspire and enable natural resource professionals and other decision makers to take action to conserve the nation’s fish, wildlife, plants, and ecosystem functions, as well as the human uses and values these natural systems provide, in a changing climate.” The Strategy stated natural resource managers may need to consider direct intervention such as translocation or assisted relocation to save a species. But because such actions are untested, they “need to be fully explored before moving forward.”[27] Action 2.2.2 in the report called for developing criteria and guidelines “to foster the appropriate use, and discourage inappropriate use of translocation, assisted relocation, and captive breeding as climate adaptation strategies.”[28] Action 2.2.3 called for actively managing populations of vulnerable species – including translocation – to ensure continued sustainability, biodiversity, human use and other ecological functions.[29]

Meanwhile, ad hoc managed relocations are already occurring. The most cited example in the U.S. is the transfer of Torreya taxifolia, a Florida conifer, to North Carolina in 2008 by a group of botanists and environmentalists called the Torreya Guardians.[30] Because plants and trees do not receive the same protections as imperiled animals, they can be moved with impunity. But even animals—if they are not listed under the Endangered Species Act—may be moved with little to no regulatory oversight.[31]

Despite the absence of a policy, the Fish and Wildlife Service has also moved at least four species outside their historic range: The red wolf, Guam rail, desert pupfish and snail darter.[32] The wolf was temporarily moved to Southeastern coastal islands to allow the species to adapt to isolated locations before being relocated to a national wildlife refuge in North Carolina.[33] The Guam rail was moved to an island 37 miles north after the brown tree snake decimated its native habitat.[34] The pupfish was established 27 miles northwest of its historic range.[35] When the U.S. Army Corps of Engineers built the Tellico Dam in its only known habitat, the snail darter was moved outside of its range.[36]

As more species face climate change threats in their home habitats, efforts to save them through managed relocation are likely to continue—with or without a sound, reasoned, and comprehensive national policy.

C. Legal framework

The Endangered Species Act gives the Fish and Wildlife Service broad discretion to conserve species. The Act defines conservation as using “all methods and procedures which are necessary to bring species” back from the brink of extinction, including “transplantation.”[37] The Act does not define transplantation, necessitating a plain meaning interpretation. According to Merriam-Webster, the definition of the verb transplant is “to move a person or animal to a new home.” Even though Congress was not contemplating climate change at the time the Act was written in 1973 and amended in 1982, the law seems to provide the Service with the authorization needed to relocate species in order to save them.

Section 10(j) of the Act, which was added in 1982, allows the Service to release endangered or threatened species outside their current range if “release will further the conservation of such species.”[38] However, to quell local opposition to the introduction of these so-called experimental populations of federally protected species into previously unoccupied areas, the Service promulgated fairly narrow regulations in 1984. The regulations prohibit experimental populations from being introduced in areas outside their historic range except “in the extreme case that the primary habitat of the species has been unsuitably and irreversibly altered or destroyed.”[39]

During the comment period for the proposed rule, the National Wildlife Federation and the U.S. Bureau of Reclamation suggested the so-called primary habitat restriction was an unnecessary constraint not intended by Congress.[40] The Service responded the restriction is the “most biologically acceptable approach to utilize in species introductions.”[41] The Service said regularly introducing listed species into new habitats as exotic species would violate the Act because it “abandons the statutory directive to conserve species in native ecosystems” and subjects listed species to doubtful survival chances and the potential to alter the species’ gene pool.[42]

Aside from its internal constraints, the Service is further restricted from pursuing managed relocation as a climate adaptation tool by Executive Order 13,112, which was signed by President Clinton in 1999.[43] The order prohibits federal agencies from introducing invasive species unless the agency has determined the benefits clearly outweigh the potential harm and that all feasible measures to minimize the risk will be undertaken.[44] An earlier Executive Order, No. 11,987 signed by President Carter, prohibits the introduction of exotic species on federally owned land and water unless either the Secretary of Agriculture or the Secretary of the Interior find such introduction will not adversely affect the natural ecosystem.[45]

But whether the law needs to be changed in order for the Service to conduct managed relocation is uncertain. Some legal scholars maintain the agency has the authority to move species outside their home ranges.[46] Others argue the laws, regulations and federal policies make assisted colonization difficult.[47] Perhaps the greatest obstacle, though, is the dominant view that natural resource management should preserve wild nature, not manipulate it.[48]

In short, the current regulatory framework for managed relocation is fragmented and variable, and often nonexistent. States have the authority to regulate the movement of most flora and fauna, though they rarely exercise it.[49] The federal government’s jurisdiction is limited to listed species, migratory birds and noxious species under the Lacey Act, or those species on federally owned lands.[50] Before any comprehensive program of relocation is undertaken, natural resource management agencies should ideally take three steps: first, review their own regulations and policies and make any necessary adjustments; second, coordinate with one another and non-governmental stakeholders; and third, establish a unified policy that determines how, when, and where to implement managed relocations.

D. Scientific resistance

The scientific community is divided on how and whether to implement managed relocation due to ecological and economic concerns, as well as the lack of supporting research.[51] Some conservation biologists do not believe moving species is the best management response to climate change. One paper called the concept of moving species outside their natural ranges “planned invasions” that carry high risks including the spread of pathogens, extirpation of native species, and increased hybridization.[52] The history of conservation biology is replete with introductions gone wrong. Just one example is the managed relocation of freshwater shrimp into Flathead Lake in Montana for the purpose of enhancing the diet of another introduced species, the kokanee salmon.[53] The bottom-dwelling shrimp avoided the salmon—which fed in the shallow waters—and wound up outcompeting the fish for food.[54] Consequently, the salmon population crashed, as did the eagle population that depended on the salmon.[55]

For critics of managed relocation, a major cause for concern is that the scientific community cannot explain why different species had divergent responses to past climate changes.[56] This suggests that trying to predict which species to relocate is a gamble. The precautionary principle suggests no action is the preferred option.

III. Discussion

Managed relocations of species stuck in increasingly inhospitable habitats due to climate change have already occurred and will likely continue and expand. Both government and private groups are engaged in the efforts. One of the many dangers inherent in such ad hoc activity is that an agency or conservation group acting in isolation with insufficient information is more likely to cause the ecological damage opponents fear. Additionally, plants and animals are already feeling the effects of climate change, and some are not adjusting well. A subset of those species is unable to move to a more suitable environment, either because they are slow migrators or cannot migrate, or because human-made roadblocks are in their way. They will likely go extinct without intervention. For these reasons, the Fish and Wildlife Service and other federal and state natural resources management agencies, working with key environmental organizations, need to establish a unified, comprehensive national policy for managed relocation.

Fortunately, the policy-writing task is already in the hands of the National Fish, Wildlife & Plants Climate Adaptation Strategy Partnership. Unfortunately, due to the urgency required, the Partnership is moving slowly. The Service, NOAA, and the other federal and state agencies should prioritize the Partnership’s work and set a one-year, hard deadline for completing critical tasks, which ought to include finalizing a managed relocation policy. States in particular need to be fully engaged since most plants and animals fall within their jurisdictions.

Specifically, the national policy should identify which plants and animals are the best candidates for moving, the likely host habitats for those species, and the environmental triggers that will activate the relocation plan. As the science continues to develop, the policy should be adjusted accordingly. Finally, to optimize the chances for success, the agencies need to continue soliciting public input, especially where the policy contemplates moving a predator species.

Legally, federal and state agencies have additional work to do. While the ESA does not overtly prohibit such relocations, the Fish and Wildlife Service’s own regulations and policies create obstacles that must be addressed. As a starting point, the Service could engage the Department of Interior’s Office of the Solicitor to provide a detailed legal analysis of the laws and regulations that may be triggered by managed relocation, along with recommendations on how to address any conflicts with a proposed managed relocation policy. Other federal and state agencies should begin similar efforts.

A national managed relocation policy is needed. Natural resource managers should not let the lack of scientific certainty deter them from setting one.

IV. Conclusion

Managed relocation involves risk, but so does doing nothing. In the absence of scientific data, natural resource managers still need to know how best to manage plants and animals affected by climate change. Moving species outside their historic ranges may not prevent mass extinctions and it is unlikely to work for every affected species. However, based on translocation data and isolated instances of managed relocations, moving some species is likely to be successful. The Service and its federal, state, and private partners should establish a clear, detailed, national managed relocation policy that will be adjusted as the science catches up. For the best results, the policy should take into account the scientific uncertainty and establish conservative parameters and alternative actions that protect both the target species and the receiving ecosystem.

 

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[1] Ben A. Minter & James P. Collins, Move It or Lose It? The Ecological Ethics of Relocating Species Under Climate Change, 20 Ecological Applications 1801 (2010).

[2] Press Release, U.S. Fish & Wildlife Serv., Sea Turtle Nests to Remain on Beaches of Northwest Florida and Alabama (Aug. 25, 2010), http://www.fws.gov/southeast/news/2010/r10-060.html.

[3] U.S. Fish & Wildlife Serv., Sea Turtle Late-Term Nest Collection and Hatchling Release Plan: Frequently Asked Questions (July 28, 2010), http://www.fws.gov/home/dhoilspill/pdfs/TurtleNestHatchProgram.pdf [hereinafter Hatchling Release Plan].

[4] Patrick D. Shirey & Gary A. Lamberti, Assisted Colonization Under the U.S. Endangered Species Act, 3 Conservation Letters 45, 45 (2010).

[5] Mark W. Schwartz et al., Managed Relocation: Integrating the Scientific, Regulatory, and Ethical Challenges, 62 BioScience 732, 733 (Aug. 2012).

[6] Id.

[7] Devin Powell, Should Species be Relocated to Prevent Extinction?, livescience.com (Aug. 24, 2009, 6:49 AM), http://www.livescience.com/10575-species-relocated-prevent-extinction.html.

[8] Erica Goode, A Shifting Approach to Saving Endangered Species, N.Y. Times (Oct. 5, 2015), http://nyti.ms/1Ng1OzG.

[9] Nat’l Fish, Wildlife and Plants Climate Adaptation P’ship, National Fish, Wildlife and Plants Climate Adaptation Strategy: About Us (2014), http://www.wildlifeadaptationstrategy.gov/about.php.

[10] E-mail from Cat Hawkins Hoffman, Acting Chief, Nat’l Park Serv. Climate Change Response Program, to author (Nov. 30, 2015, 6:37 PM EST) (on file with author).

[11] Id.

[12] The Service opted not to track the hatchlings. Hatchling Release Plan, supra note 3.

[13] National Park Serv., Yellowstone National Park: Wolf Restoration (last visited Nov. 29, 2015), http://www.nps.gov/yell/learn/nature/wolf-restoration.htm.

[14] U.S. Fish & Wildlife Serv., Gray Wolves in the Northern Rocky Mountains: News, Information and Recovery Status Reports (last updated Apr. 13, 2015), http://www.fws.gov/mountain-prairie/species/mammals/wolf/.

[15] Final Rule to List the Rufa Red Knot as a Threatened Species, 79 Fed. Reg. 73,708 (Dec. 11, 2014), http://www.fws.gov/northeast/redknot/pdf/2014_28338_fedregisterfinalrule.pdf.

[16] Id. The lemming is a rodent.

[17] Jacklyn Lopez, Biodiversity on the Brink: The Role of “Assisted Migration” in Managing Endangered Species Threatened with Rising Seas, 39 Harv. Envtl. L. Rev. 157, 160 (2015); Press Release, U.S. Fish & Wildlife Serv., U.S. Fish and Wildlife Service Lists the Florida Leafwing and Bartram’s Scrub-Hairstreak Butterflies as Endangered, and Designates Critical Habitat (Aug. 11, 2014), http://www.fws.gov/news/ShowNews.cfm?ID=B7139119-9A7E-41BC-DBC44DB976E62F68; U.S. Fish & Wildlife Serv., No Place to Go, http://www.fws.gov/southeast/climate/stories/keydeer.html (last updated Sept. 24, 2010).

[18] Chris D. Thomas et al., Extinction Risk from Climate Change, 427 Nature 145, 145–48 (Jan. 8, 2004).

[19] Elizabeth Kolbert, The Sixth Extinction: An Unnatural History 6–7 (2014).

[20] Joe Roman, Listed: Dispatches from America’s Endangered Species Act 34 (2011).

[21] Schwartz, supra note 5, at 734.

[22] David Appell, Can “Assisted Migration” Save Species from Global Warming?, Sci. Am., Feb. 16, 2009.

[23] Emma Morris, Moving on Assisted Migration, 2 Nature 112 (Sept. 2008).

[24] U.S. Fish & Wildlife Service, Rising to the Urgent Challenge: Strategic Plan for Responding to Accelerating Climate Change (2010), http://www.fws.gov/home/climatechange/pdf/CCStrategicPlan.pdf.

[25] Id.

[26] National Fish, Wildlife, and Plants Climate Adaptation Strategy, 78 Fed. Reg. 19,514 (Apr. 1, 2013).

[27] National Fish, Wildlife and Plants Climate Adaptation Partnership, National Fish, Wildlife and Plants Climate Adaptation Strategy 60 (2012), http://www.wildlifeadaptationstrategy.gov/pdf/NFWPCAS-Final.pdf.

[28] Id. at 61.

[29] Id.

[30] Patrick Parenteau, Species and Ecosystem Impacts, in The Law of Adaptation to Climate Change: U.S. and International Aspects 307, 317 (Michael B. Gerrard & Katrina Fischer Kuh eds., 2012).

[31] Schwartz, supra note 5, at 737–38.

[32] Alejandro Camacho, Assisted Migration: Redefining Nature and Natural Resource Law Under Climate Change, 27 Yale J. on Reg. 171, 203–204 (Summer 2010); Parenteau, supra note 30, at 329.

[33] Camacho, supra note 32, at 203.

[34] Id.

[35] Id. at 204.

[36] Parenteau, supra note 30, at 329.

[37] Endangered Species Act, 16 U.S.C. § 1532(3) (2015).

[38] § 1539(j).

[39] Final Rule: Endangered and Threatened Wildlife and Plants; Experimental Populations, 49 Fed. Reg. 33,885, 33,886 (Aug. 27, 1984) (codified at 50 C.F.R. pt. 17) [hereinafter Final Rule]; see also Shirey & Lamberti, supra note 4, at 49.

[40] Final Rule, supra note 39, at 33,890; Shirey & Lamberti, supra note 4, at 49.

[41] Final Rule, supra note 39, at 33,890.

[42] Id.

[43] Exec. Order No. 13,112, 64 Fed. Reg. 6,183–86 (Feb. 8, 1999).

[44] Id. at 6,184.

[45] Exec. Order No. 11,987, 3 C.F.R. 119 (1977).

[46] E.g. J.B. Ruhl, Climate Change and the Endangered Species Act: Building Bridges to the No-Analog Future, 88 B.U. L. Rev. 1, 53 (2008); John Kostyack & Dan Rohlf, Conserving Endangered Species in an Era of Global Warming, 38 Envtl. L. Reporter 10203, 10204, 10209–10; and Lopez, supra note 17, at 190.

[47] Camacho, supra note 32, at 188–202.

[48] Id. at 211–16.

[49] Schwartz, supra note 5, 737–38.

[50] Id.

[51] National Fish, Wildlife and Plants Climate Adaptation Partnership, National Fish, Wildlife and Plants Climate Adaptation Strategy: Taking Action, A Progress Report 20 (2014), http://www.wildlifeadaptationstrategy.gov/pdf/Taking-Action-progress-report-2014.pdf.

[52] Anthony Ricciardi & Daniel Simberloff, Assisted ColonizationIis Not a Viable Conservation Strategy, 24 Trends in Ecology and Evolution 248, 248–53 (2009).

[53] Id. at 249.

[54] Id. at 249-50.

[55] Id.

[56] Schwartz, supra note 5, at 734.

This post is part of the Environmental Law Review Syndicate, a multi-school online forum run by student editors from the nation’s leading environmental law reviews.

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By Benjamin Harris, Executive Editor for the UCLA Journal of Environmental Law & Policy*

 

The Clean Power Plan (“CPP”), announced and promulgated in late 2015 by the Environmental Protection Agency (“EPA”) and backed by President Barack Obama, seeks to develop a comprehensive regulatory scheme over the nation’s power plants in an effort to promote cleaner energy development and reduce greenhouse gas emissions. On February 10, 2016, the Supreme Court granted a petition to stay the Clean Power Plan until a legal challenge against it can proceed on the merits. This post 1) provides a short overview of the CPP, 2) explores the history of CPP litigation and the Supreme Court’s recent decision to stay, 3) predicts the future outlook of the CPP, and 4) provides an alternate arrangement by which the EPA could conceivably seek to regulate greenhouse gas emissions in the event that the CPP is struck down.

A Primer on the Clean Power Plan

The Clean Power Plan is the culmination of almost a decade’s worth of efforts to regulate greenhouse gases under the Clean Air Act (“CAA”). In 2007, the Supreme Court held in Massachusetts v. EPA that the EPA can regulate greenhouse gases under Section 202(a)(1) of the CAA, which states that the EPA “shall by regulation prescribe . . . standards applicable to the emission of any air pollutant from . . . new motor vehicles or new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.”[1] Two years later, the EPA made such an endangerment finding and concluded that greenhouse gases endanger the public health and welfare by contributing to climate change.[2]

This endangerment finding required the EPA to regulate greenhouse gas emissions from mobile sources, which it did through the Tailpipe Rule.[3] The EPA also sought to regulate stationary sources for greenhouse gases via the Tailoring Rule, which adapted the prevention of significant deterioration (PSD) provisions of the CAA to greenhouse gases by massively increasing the threshold amount of GHG emissions that would subject a stationary source to permit requirements.[4] In 2014, the Supreme Court in Utility Air Regulatory Group v. EPA struck down the Tailoring Rule as exceeding the EPA’s statutory authority, but allowed the EPA to regulate stationary sources that were already subject to PSD permitting requirements for other air pollutants.[5]

Given the Supreme Court’s decision in Utility Air Regulatory Group, the EPA needed to pursue other means for regulating greenhouse gas emissions from stationary sources under the CAA. Section 111(d) requires the EPA to regulate air pollutants “for which air quality criteria have not been issued or which is not included on a list published under section [108(a)] or emitted from a source category which is regulated under section [112].”[6] The EPA is directed to develop “standards of performance,” defined to mean the best system of emission reduction (BSER) adequately demonstrated, for sources that emit these air pollutants.[7] Because greenhouse gases are neither regulated as a hazardous air pollutant under Section 112 nor under a National Ambient Air Quality Standard (NAAQS) under Section 108(a), the EPA sought to use this provision to regulate greenhouse gases from stationary sources.

Enter the Clean Power Plan, an ambitious directive to reduce emissions from fossil fuel-powered electric generating units (EGUs) through the imposition of the BSER standard.[8]

The CPP contains three basic elements: 1) performance rates for electric steam generating units (i.e. coal-fired or oil-fired plants) and natural gas combined cycle generating units based on the BSER; 2) state-specific emission reduction goals calculated based on the above performance rates and the state’s mix of affected EGUs, expressed as both emissions rates and overall mass; and 3) guidelines for developing state plans that implement the performance rates through either the rate-based or the mass-based method.[9] All of the performance standards outlined in the CPP are to be phased in over an eight-year period starting in 2022.[10] States have considerable flexibility in adopting a plan to achieve the target emission reduction by 2030, including whether to adopt the rate-based regulation or instead opt for a mass-based approach.[11]

The EPA determined that the BSER is comprised of three building blocks: 1) improving the heat rate of coal-fired EGUs, 2) substituting natural gas combined cycle EGUs for higher carbon-intensity steam generating plants, and 3) substituting no-carbon renewable energy generation for fossil-fuel EGUs.[12] The final performance rates established by the EPA were 1,305 pounds of CO2 per MWh for fossil fuel-fired steam generation units and 771 pounds of CO2 per MWh for stationary combustion turbines.[13] The EPA then calculated emission reduction goals by 2030 for each state based on their mix of affected EGUs.[14]

The CPP directs states to develop and implement plans that meet their individual emission reduction goals. States can choose to adopt either an emission standards plan, containing source-specific requirements to ensure power plants meet the necessary performance standards,[15] or states can adopt a “state measures approach,” whereby the state implements a variety of statewide measures, including renewable energy and energy efficiency programs, to achieve the emission reduction goal.[16] These statewide measures must be enforceable at the state level and must contain a backstop of federally enforceable emission standards for affected EGUs to ensure that the state achieves the emissions goal by 2030.[17] The CPP also affords states the opportunity to work with other states to develop regional or multi-state approaches, including emissions trading programs.[18] The CPP requires states to submit their final plans by September 6, 2016, but provides for the availability of a two-year extension.[19]

In total, the CPP aims to reduce carbon emissions from the power sector by 32% compared to 2005 levels.[20] Other benefits of the plan are predicted to include a significant reduction in emissions of other air pollutants such as sulfur dioxide and nitrogen oxides, net financial benefits of up to $45 billion, and observable public health benefits.[21]

Clean Power Plan Litigation and the Supreme Court’s Stay

The CPP has been challenged in court by numerous parties, including numerous states, industries, and utilities.[22] In October 2015, claims brought by states were consolidated and filed in the D.C. Circuit, the court with original jurisdiction pursuant to CAA Section 307(b)(1).[23] In their motion to stay the CPP, the states relied on several substantive arguments. First, the states argued that the EPA exceeded its statutory under Section 111(d) by purporting to regulate outside individual existing sources of greenhouse gas emissions.[24] The states considered the plan’s focus on encouraging natural gas and renewable power generation as a substitute for coal-fired plants (two of the three “building blocks” of the BSER) to violate Section 111(d) because it extends beyond regulating existing source performance.[25] The states also asserted that the CPP infringes on traditional state sovereignty over electric regulation in a manner that Congress did not approve when enacting the provision.[26] Ultimately, the states were highly critical of the EPA basing its legal foundation for its extensive regulatory initiative on Section 111(d), a “long-extant provision.”[27]

Second, the states claimed that the CPP is unlawful because the affected power plants are already regulated for hazardous air pollutants under Section 112.[28] In this regard, the states made an argument regarding the discrepancy in the legislative history behind Section 111(d), in which the Senate and the House each passed a different version of the 1990 amendments to Section 111(d) due to a clerical error.[29]

The Senate version amended Section 111(d) to allow for regulation of any air pollutant not covered under Section 108 or listed under Section 112.[30] On the other hand, the House version excluded any pollutant “emitted from a source category” regulated under Section 112, implying that as long as the source category is already being regulated for hazardous pollutants, the EPA cannot apply additional requirements to that source under Section 111(d).[31] In its final rule, the EPA engaged in an extensive discussion regarding the discrepancy, ultimately arriving at an interpretation that harmonizes the two versions.[32] The EPA read Section 111(d) to mean that “the Section 112 Exclusion excludes the regulation of [hazardous air pollutants] under [S]ection 112 if the source category at issue is regulated under [S]ection 112, but does not exclude the regulation of other pollutants, regardless of whether that source category is subject to [S]ection 112 standards.”[33] This interpretation would allow for the EPA to regulate greenhouse gases, not listed as a hazardous pollutant under Section 112, even for source categories that are regulated for other Section 112 pollutants.

The states, in their motion for a stay of the CPP, argued that the presence of the Senate version in the legislative history does not create a statutory ambiguity by which the EPA is allowed to adopt a reasonable interpretation of a vague provision.[34] Because the Senate’s version of Section 111(d) appeared in the 1990 Statutes at Large, but the House version was included in the U.S. Code, the states asserted that the House language is binding and clearly prohibits the type of regulation that the EPA purports to achieve in the CPP.[35]

Next, the states claimed a stay of the CPP was necessary because of irreparable harm[36] that would result from its implementation, in the form of 1) sovereign harms upon the states’ regulation of intra-state electricity, 2) financial burdens from the significant man-hours of work to be done by energy and environmental regulators, and 3) the immediate need to begin the regulatory process under the CPP despite the long timeline of implementation.[37] The states also asserted that a stay is in the public interest because energy regulators would benefit from a complete litigation of their legal obligations prior to undertaking any significant steps under the CPP.[38]

On January 21, 2016, the D.C. Circuit denied the motion to stay the CPP until litigation concludes on the substantive challenges to the CPP.[39] The court determined that the plaintiffs had not met the “stringent requirements” for a stay pending court review.[40]

Not three weeks later, the Supreme Court overruled the D.C. Circuit and granted a stay against the CPP.[41] Five justices voted in favor of the stay, with Justices Ginsburg, Breyer, Sotomayor, and Kagan voting against.[42] This stay is particularly surprising, and unprecedented, given the high standard the plaintiffs must meet to be awarded preliminary injunctive relief.[43] It is unclear whether the Court placed greater weight on the merits of the plaintiffs’ substantive arguments or somehow saw the likelihood of irreparable injury in allowing the CPP to be slowly implemented over the next fifteen years. These questions are of crucial importance, and a full-length opinion on the stay, even though that is something the Court regularly does, could have elucidated the exact bases for the decision in a manner that provides more certainty for the litigants and the country moving forward.

Predictions about the Future of the Clean Power Plan

Nevertheless, now that the CPP is halted pending litigation, the looming question is what the future holds for the CPP. With the stay in place, states are no longer obliged to continue with regulatory efforts to implement the CPP and develop state plans. Most states will likely abandon their previous efforts to comply with the CPP, but some may continue to develop certain facets of their state plans in the event that the CPP will be upheld to some degree. The future of the litigation will play out over an extended period of time, and the results are challenging to predict with certainty.

Currently, oral arguments in front of the D.C. Circuit are scheduled for June 2-3, 2016.[44] Per this schedule, the D.C. Circuit’s decision may not arrive until late 2016, possibly after the September deadline for the submission of state plans under the CPP.[45]

Given the D.C. Circuit’s unwillingness to issue a stay, it is fair to predict that the Circuit Court will similarly rule in favor of the EPA. In fact, the announcement of the panel of judges hearing the case is favorable to the EPA, with two appointments from Democrat presidents and a conservative judge who has sided with the EPA on several occasions.[46]

Even if the EPA is successful at the Circuit level, the Supreme Court’s stay will remain in place until the Supreme Court either denies a writ of certiorari (extremely unlikely) or enters its own judgment.[47] Given the drawn-out process of Supreme Court jurisprudence, a final decision on the litigation may not arise until the second quarter of 2017. Therefore, even if the CPP is upheld, the EPA’s implementation timeline would be set back by almost a full year, triggering a cascade of delays and likely requiring significant revisions of the rules. Despite the logistical complications this outcome may cause, it would be more than manageable for the EPA. The agency would likely still be able to preserve the ultimate mission to achieve particular emissions reduction goals in each state by 2030.[48]

Unfortunately, following the Supreme Court’s granting of a stay against the CPP, the EPA should not be over-confident heading into the Supreme Court chambers. In the (near-certain) event that the Supreme Court decides to hear the case after the D.C. Circuit, the fate of the EPA’s regulatory darling will seemingly turn on the most moderate of the conservative Supreme Court justices.

Justice Anthony Kennedy, voting in favor of the stay on the CPP, was the deciding vote in Massachusetts v. EPA. A proponent of federalism and states’ sovereign rights, Justice Kennedy may have been persuaded by the states’ interests in getting greenhouse gases regulated under the CAA.[49] However, he may not look as favorably toward the CPP’s effects on states. While states have significant flexibility under the CPP to meet the emission reduction targets in any manner they see fit, the imposition of an emissions reduction requirement in the first place can potentially interfere with a state’s desired energy profile and could have significant repercussions on the local economy. This is why more than half of states in the country have joined in on some kind of challenge to the CPP.

It therefore seems likely that Justice Kennedy, given his jurisprudence on federalism, will side with these states as they strive to maintain state sovereignty in the energy sector. This position, however, would be hard to rectify with Justice Kennedy’s voting record in Massachusetts v. EPA, especially considering that stationary source regulation for greenhouse gases is an inevitable corollary of an endangerment finding under Section 202. The EPA clearly intended for the CPP to provide states sufficient leeway to feel comfortable achieving the requisite reductions in a manner tailored to their individualized needs. It would be an odd result for Justice Kennedy to find this an overstep into traditional state regulation when such a holding would undermine the federal objectives of the CAA, which he personally expanded to encompass greenhouse gases. And the CPP affords states ample discretion in crafting a state plan that satisfies the emission reduction targets, perhaps more than what the states are entitled to receive under legal precedent. Regardless, if the five conservative justices find the state sovereignty argument compelling, that will be sufficient grounds to invalidate the entire CPP.

One other avenue for striking down the CPP is the statutory interpretation question regarding the legislative history of Section 111(d). If the Court finds the provision to be clear and unambiguous in prohibiting the EPA from regulating existing sources already subject to Section 112 permitting requirements, then the reach of the CPP would at best be highly limited to only those power plants that do not have the potential to emit 250 tons per year of hazardous air pollutants (of which there are few, if any), and at worst struck down altogether. On the other hand, if the Court buys into the muddied legislative history and considers the EPA’s interpretation of a vague provision to be permissible, then the entirety of the CPP would not be statutorily suspect on these grounds.

Another option is available to the Court, where it could partially uphold the CPP for its regulation of existing sources but strike down the portions of the plan that may involve regulation “outside the fence.” This mainly concerns the second and third building blocks of the BSER, which are to encourage natural gas generation and renewable energy generation, respectively, as substitutes for high-carbon fossil fuel generation. The availability of these “generation-shifting” measures are incorporated into the BSER calculations for each state, and therefore if the Court finds these provisions an overreach of the EPA’s statutory authority, it will unwind a significant portion of the EPA’s emissions reduction targets. Again, this is a matter of statutory interpretation based on whether Section 111(d) unambiguously intends to limit regulation under that provision to only the design or operations of “existing” sources of the targeted pollutant.[50] The practical effects of a partial invalidation of the CPP are difficult to ascertain, given the significant weight placed on the BSER in the final rule. Even in this scenario, the EPA would be sent back to the drawing board to come up with a whole new way to achieve its desired emissions targets.

Given the multitude of legal challenges from which the justices have to choose, it seems likely that Justice Kennedy will join with his conservative colleagues on at least one of the legal bases to invalidate the CPP.

Can a NAAQS for Carbon Dioxide Save the Day?

It is clear that in light of the Supreme Court’s stay on the Clean Power Plan, things are not looking great for the EPA. In preparation for an adverse Supreme Court ruling, the EPA should already be identifying ways to re-implement the goals of the CPP. The CPP was a key program in place to help the United States achieve its intended nationally determined contribution (INDC), of at least a 26% reduction from 2005 levels by 2025, under the Paris Agreement from the United Nations Framework Convention on Climate Change.[51] If the CPP is no longer viable, the EPA will need to have an alternative plan in place to satisfy the nation’s reduction obligations.

To this end, there is still one significant mechanism to regulate greenhouse gases under the CAA that the EPA has yet to utilize: the setting of a National Ambient Air Quality Standard for carbon dioxide.

Indeed, the EPA is legally obligated to declare greenhouse gases as criteria pollutants under Section 108(a) after making an endangerment finding regarding mobile sources under Section 202(a).[52] The requirements for listing a criteria pollutant under Section 108(a)(1) are findings that the pollutant (A) may reasonably be anticipated to endanger public health or welfare, (B) is emitted from numerous or diverse sources, and (c) is one for which the EPA plans to issue air quality criteria.[53] In the case of Natural Resources Defense Council v. Train, the Second Circuit held that “[o]nce the conditions of [Section] 108(a) (1)(A) and (B) have been met, the listing of lead and the issuance of air quality standards for lead become mandatory.”[54] Because the EPA already made an endangerment finding for greenhouse gases from mobile sources, and because greenhouse gases are clearly emitted from a plethora of stationary sources throughout the country, the EPA is similarly legally required to list greenhouse gases as criteria pollutants. And once a criteria pollutant is listed, the EPA is obligated to develop a NAAQS for that pollutant under Section 109, at a level requisite to protect the public health and welfare.[55]

The Center for Biological Diversity filed a petition with the EPA to list greenhouse gases as criteria pollutants on December 2, 2009.[56] The petition asks for the EPA to set a NAAQS for carbon dioxide at 350 ppm, far lower than current levels throughout the world.[57] At this point in time, it is unclear what the extent of the EPA’s response to this petition has been, or if the EPA has even acknowledged it at all.

To be sure, listing greenhouse gases as criteria pollutants would be a drastic and radical option for the EPA. It would bring the entire country’s GHG emissions under the jurisdiction of the EPA, which would be uniquely situated to effectuate emissions reductions in numerous ways.[58] The promulgation of a NAAQS for greenhouse gases would still give states considerable flexibility to determine how to reduce emissions through state implementation plans, in a manner similar to the CPP but with far more stringent targets.[59] There are also drawbacks to such a scheme, a primary concern being that the entire country would perpetually be in non-attainment for exceeding the concentrations of greenhouse gases set in the standard.[60] But in the event that the EPA finds itself picking up the pieces that were once the Clean Power Plan, perhaps it would be time to take a more dramatic approach to ensure that our country can meet its INDC that it pledged to the international community back in December 2015.

It will be interesting to see whether this extreme route of greenhouse gas regulation becomes elevated to the forefront of the national climate change discussion if the Supreme Court carries out the execution of the CPP as it has threatened to do by issuing a stay. Without the CPP, the EPA clearly would need to take drastic action to meet the emission reduction contributions pledged under the INDC.

Conclusion

The public perception regarding climate change is clearly progressing toward a strong drive for action. Individual states have not been proactive enough in regulating greenhouse gases, revealing a need for national action to protect against an unequal distribution of externalities. The EPA is clearly making every effort to incorporate greenhouse gases within the purview of the Clean Air Act. Given the poor knowledge about climate change when the CAA was enacted, the EPA has been creative in identifying regulatory solutions amidst ill-adapted statutory language. The Supreme Court’s stay of the Clean Power Plan is just the latest development in a perpetual struggle over how to adapt a decades-old, excessively-complex statute to arguably the most significant environmental disaster our planet will ever face. National greenhouse gas regulation under the CAA is inevitable, and the EPA will continue to search for the judicially-approved answers. Whether those answers take the form of the Clean Power Plan, or whether the EPA must resort to a more drastic measure such as National Ambient Air Quality Standards for greenhouse gases, is yet to be seen.

 

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[1] See Massachusetts v. EPA, 549 U.S. 497, 528-29 (2007); 42 U.S.C. § 7521(a)(1).

[2] See Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act, 74 Fed. Reg. 66,496 (Dec. 15, 2009).

[3] See Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule, 75 Fed. Reg. 25,324 (May 7, 2010).

[4] See Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule, 75 Fed. Reg. 31,514 (June 3, 2010).

[5] See Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427, 2449 (2014). The Tailoring Rule sought to raise the threshold of greenhouse emissions for which stationary sources would be subject to permitting requirements to 100,000 tons per year, even though the statute explicitly stated that limit to be the potential to emit 250 tons per year. Id. at 2444-45. The Court found this to be an impermissible construction of an unambiguous statute. Id. at 2445.

[6] 42 U.S.C. § 7411(d)(1) (2012).

[7] Id. § 7411(a)(1), (d)(1).

[8] See Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662, 64,665 (Oct. 23, 2015).

[9] Id. at 64,666; see also Envtl. Prot. Agency, Overview of the Clean Power Plan: Cutting Carbon Pollution from Power Plants 3 (2015) [hereinafter Clean Power Plan Fact Sheet], available at http://www.epa.gov/sites/production/files/2015-08/documents/fs-cpp-overview.pdf.

[10] Carbon Pollution Emission Guidelines for Existing Stationary Sources, 80 Fed. Reg. at 64,666.

[11] Id.

[12] Id. at 64,667.

[13] Id.

[14] Id. Vermont and Washington, D.C. were excluded because the EPA found that they do not have affected EGUs, while Alaska and Hawaii were excluded because there was insufficient information or analytical tools to quantify a BSER. Id. at 64,664.

[15] Id. at 64,667-68.

[16] Id.

[17] Id.

[18] Id. at 64,666.

[19] Id. at 64,669.

[20] Id. at 64,665.

[21] Clean Power Plan Fact Sheet, supra note 9, at 2-3.

[22] Challenges were originally brought prematurely against the proposed CPP before the final version was published in the Federal Register, and the D.C. Circuit subsequently denied the plaintiffs injunctive relief. See Jeremy P. Jacobs, Court Denies Initial Bid to Block Obama Climate Regime, Greenwire (Sept. 9, 2015, 5:28 PM), http://www.eenews.net/greenwire/stories/1060024457.

[23] See Petition for Review at 2, West Virginia v. EPA, No. 15-1363 (D.C. Cir. Oct. 23, 2015), available at http://www.ago.wv.gov/publicresources/epa/Documents/File-stamped%20petition%2015-1363%20(M0108546xCECC6).pdf; 42 U.S.C. § 7607(b)(1) (2012)..

[24] See State Petitioners’ Motion for Stay and for Expedited Consideration of Petition for Review at 7-10, West Virginia v. EPA, No. 15-1363 (D.C. Cir. Oct. 23, 2015), available at https://www.edf.org/sites/default/files/content/2015.10.23_states_motion_for_stay_expedited_consideration.pdf.

[25] Id. at 7-8. In fact, the EPA initially included energy efficiency programs as a fourth building block of the BSER but dropped it from the final rule given these very concerns about jurisdiction. See Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662, 64,673 (Oct. 23, 2015).

[26] State Petitioners’ Motion for Stay, supra note 24, at 10-11.

[27] Id. at 6-7.

[28] Id. at 11-14.

[29] Id.

[30] Clean Air Act Amendments of 1990, Pub. L. No. 101-549, § 302(a), 104 Stat. 2399, 2574.

[31] Clean Air Act Amendments of 1990 § 108(g), 104 Stat. at 2467.

[32] Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662, 64,710-15 (Oct. 23, 2015).

[33] Id. at 64,715 (emphasis added).

[34] State Petitioners’ Motion for Stay, supra note 24, at 15.

[35] Id. at 14-15.

[36] The legal standard for preliminary injunctive relief requires a plaintiff to “establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v. Natural Res. Def. Council, 555 U.S. 7, 20 (2008).

[37] State Petitioners’ Motion for Stay, supra note 24, at 15-19.

[38] Id. at 19-20.

[39] See Order Denying Motions for Stay at 2, West Virginia v. EPA, Case No. 15-1363 (D.C. Cir. Jan. 21, 2016), available at https://www.edf.org/sites/default/files/content/2016.01.21_order_denying_stay_motions.pdf.

[40] Id. (citing Winter v. Natural Res. Def. Council, 555 U.S. 7, 20 (2008)).

[41] See Order in Pending Case, West Virigina v. EPA (Feb. 9, 2016), available at http://www.scotusblog.com/wp-content/uploads/2016/02/15A773-Clean-Power-Plan-stay-order.pdf.

[42] Id.

[43] For a strong argument for why the Supreme Court’s decision to stay the CPP is inconsistent with the law, see Ann Carlson, The Decision to Halt the Implementation of the Clean Power Plan is Outrageous, Legal Planet (Feb. 9, 2016), http://legal-planet.org/2016/02/09/the-decision-to-halt-the-implementation-of-the-clean-power-plan-is-outrageous/.

[44] See Order Denying Motions for Stay, supra note 39, at 2.

[45] See Megan Herzog, EPA Wins the First Round in Clean Power Plan Litigation, Legal Planet (Jan. 27, 2016), http://legal-planet.org/2016/01/27/epa-wins-the-first-round-in-clean-power-plan-litigation/.

[46] Id.

[47] See Order in Pending Case, supra note 41.

[48] This, of course, is wholly dependent on the assumption that the 2016 presidential election will produce a leader motivated to continue carrying out the implementation of the CPP. See Ann Carlson, Initial Thoughts on the Supreme Court Staying the Clean Power Plan, Legal Planet (Feb. 9, 2016), http://legal-planet.org/2016/02/09/initial-thoughts-on-the-supreme-court-staying-the-clean-power-plan/.

[49] See Linda Greenhouse, Justices Say E.P.A. Has Power to Act on Harmful Gases, N.Y. Times (Apr. 3, 2007), http://www.nytimes.com/2007/04/03/washington/03scotus.html.

[50] The EPA responded to many comments that raised jurisdictional concerns over the second and third building blocks in its final rule. See Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662, 64,766-70 (Oct. 23, 2015)

[51] See U.S. Cover Note, INDC and Accompanying Information (2015), http://www4.unfccc.int/submissions/INDC/Published%20Documents/United%20States%20of%20America/1/U.S.%20Cover%20Note%20INDC%20and%20Accompanying%20Information.pdf.

[52] See Kassie Siegel et al., Strong Law, Timid Implementation. How the EPA Can Apply the Full Force of the Clean Air Act to Address the Climate Crisis, 30 UCLA J. Envtl. L. & Pol’y 185, 209 (2012).

[53] 42 U.S.C. § 7408(a)(1)(A)-(C) (2012).

[54] Natural Res. Def. Council v. Train, 545 F.2d 320, 328 (2d Cir. 1976). While this case would not be binding on the D.C. Circuit in the event that the EPA refuses to list greenhouse gases as criteria pollutants, it would likely have a strong persuasive effect. See Siegel et al., supra note 52, at 209-10.

[55] See 42 U.S.C. §7409.

[56] See Ctr. for Biological Diversity & 350.org, Petition to Establish National Pollution Limits for

Greenhouse Gases Pursuant to the Clean Air Act (2009), available at http://www.biologicaldiversity.org/programs/climate_law_institute/global_warming_litigation/clean_air_act/pdfs/Petition_GHG_pollution_cap_12-2-2009.pdf.

[57] See id. at 18-24.

[58] See Spiegel et al., supra note 52, at 211.

[59] Id. at 211-12.

[60] For a discussion of criticisms of a NAAQS for greenhouse gases and responses to those criticisms, see id. at 213-24.

This post is part of the Environmental Law Review Syndicate, a multi-school online forum run by student editors from the nation’s leading environmental law reviews.

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Mitigating Greenhouse Gas Emissions in the Northeast and Mid-Atlantic Transportation A Cap-and-Invest Approach 

James D. Flynn*

1. Introduction

In recent years, states in New England and the mid-Atlantic region have made significant progress in reducing climate change-inducing greenhouse gas (GHG) emissions from the electricity generation sector.[1] Several factors¾including the effects of the economic recession, shifts in energy markets from coal to natural gas and renewable energy sources, and carbon pollution mitigation and clean energy programs like renewable portfolio standards¾have been identified as principal drivers of these reductions.[2] Another is the Regional Greenhouse Gas Initiative (RGGI), a cooperative effort among nine northeastern and mid-Atlantic states to reduce carbon dioxide (CO₂) emissions from the power sector.[3] RGGI employs a cap-and-invest approach in which the participating states set a regionally uniform, decreasing cap on CO₂ emissions from covered power plants, periodically auction off emission allowances, and invest auction proceeds in other programs including end-use energy efficiency, renewable energy, greenhouse gas abatement, and direct customer electric bill assistance.[4] One study estimates that CO₂ emissions in the RGGI region would have been approximately 24 percent higher in 2015 but for the program, which took effect in 2009.[5] At the same time, it is estimated that through 2015, RGGI generated approximately $2.9 million in net economic benefits,[6] and that the investment of RGGI allowance auction proceeds in 2015 alone will return $2.31 billion in lifetime energy bill savings for consumers.[7]

Over approximately the same period of time, however, CO₂ emissions from the transportation sector in RGGI states have remained relatively level or have increased. Transportation accounts for 44 percent total CO₂ emissions in the region, more than any other sector.[8] Each RGGI member state has adopted a long-term GHG reduction goal, set by statute or executive order, or in climate- or energy-related plans, “generally consistent with achieving an 80 percent reduction of GHG emissions by 2050 from 1990 levels.”[9] Most states’ goals do not include sector-specific emission targets, but because transportation is the largest source of emissions in the region, shifting to a cleaner transportation system is a “critical component of the action needed to meet economy-wide goals and to avoid further catastrophic harms of climate change.”[10] RGGI states already employ a variety of policy mechanisms aimed at decarbonizing transportation,[11] but have been considering whether to employ a cap-and-invest approach similar to RGGI or California’s multi-sector cap-and-invest program, which includes the state’s transportation sector.[12]

This paper first discusses the mechanics of RGGI and California’s cap-and-invest program generally, including how auction proceeds are invested. It then discusses the potential to use a cap-and-invest approach to mitigate GHG emissions from transportation in the Northeast and mid-Atlantic and addresses two key policy considerations: the type of fuels to be covered and the point of regulation. It concludes that, if properly designed, a cap-and-invest approach could achieve significant GHG reductions from transportation in the region and generate substantial funds for other GHG mitigation and climate change adaptation initiatives.

1. The Cap-and-Invest Model

Cap-and-trade programs generally operate as follows.[13] The government sets an overall emissions target¾the cap¾and determines which facilities will be covered. Emission allowances, each generally equal to one ton of emissions, are periodically auctioned or distributed without cost—or both—to covered facilities.[14] The total number of allowances is equivalent to the cap number, which decreases over time.[15] A market is created in which covered facilities may purchase or sell allowances from other covered facilities. Covered facilities are required to hold enough allowances to cover their emissions at the end of a compliance period, which may range from one to three years.[16] If a facility lacks sufficient allowances, it will be assessed a monetary penalty in addition to having to purchase enough allowances to cover the shortfall.

This market-based approach provides covered facilities three options: (1) they may reduce their emissions to meet the number of allowances they purchase or receive; (2) they may purchase additional allowances on the market and emit more; or (3) they may reduce their emissions below the allowances they hold and sell the remainder on the market.[17] The advantage of cap-and-trade programs is that facilities that can reduce their emissions more cost-effectively will do so, while those that face higher emissions reduction costs will purchase additional allowances at auction or on the market.[18] Accordingly, cap-and-trade schemes provide firms with flexibility to design cost-effective, tailored emissions plans, and the regulator achieves its policy objective by means of the overall emissions cap.[19] “Cap-and-invest” refers to cap-and-trade programs that invest their proceeds into other policy initiatives intended to address the pollutant or its effects.

1. RGGI

RGGI is the first market-based regulatory program in the United States designed to reduce GHG emissions.[20] It is a cooperative effort among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont to cap and reduce CO₂ emissions from the electricity generation sector.[21] RGGI is composed of individual CO₂ budget trading programs implemented in each participating state. Through independent regulations, each state’s CO₂ budget trading program limits emissions of CO₂ from electric power plants with the capacity to generate 25 megawatts or more (some 164 facilities), issues CO₂ allowances, and establishes participation in regional CO₂ allowance auctions.[22]

RGGI began with discussions among the governors of seven New England and mid-Atlantic states, which led to a 2005 Memorandum of Understanding that outlined the program.[23] In 2008, the RGGI states issued a Model Rule that participating states could use as guidance to establish and implement their individual programs.[24] RGGI’s designers expected the initial program might be expanded in the future by covering other emission sources, sectors, GHGs, or states.[25] CO₂ emissions from covered facilities in RGGI states account for approximately 20 percent of GHG emissions in the region.[26]

At the end of each three-year compliance period, covered facilities must surrender one allowance for each ton of CO₂ emissions generated during the period.[27] Covered facilities are permitted to bank an unlimited number of emission allowances for future use.[28] Over 90 percent of allowances are distributed through periodic auctions, and a reserve price sets a price floor for allowances.[29] RGGI employs a “cost containment reserve” that allows for additional allowances to be auctioned if certain price thresholds are met.[30] In limited circumstances, covered facilities may also submit offsets, which are measurable reductions, avoidances, or sequestrations of emissions from non-covered sources, in lieu of emission allowances.[31] The RGGI states agreed that each would use at least 25 percent of its individual auction proceeds “for a consumer benefit or strategic energy purpose.”[32]

Member states invest the proceeds from allowance auctions in a variety of consumer benefit programs at scale.[33] In October 2017, RGGI, Inc. (the corporate entity that administers RGGI) released a report that tracks the investment of RGGI auction proceeds in 2015 and the benefits of these investments throughout the region.[34] The report estimates that “[t]he lifetime effects of these investments are projected to save 28 million MMBtu of fossil fuel energy and 9 million MWh of electricity, avoiding the release of 5.3 million short tons [4.8 million metric tons] of carbon pollution.”[35] The report also notes that “RGGI investments in 2015 are estimated to return $2.31 billion in lifetime energy bill savings to more than 161,000 households and 6,000 businesses which participated in programs funded by RGGI investments, and to 1.5 million households and over 37,000 businesses which received direct bill assistance.”[36] RGGI states have discretion as to how they invest RGGI proceeds.

The report breaks down these investments into four categories.  Energy efficiency makes up 64 percent of investments. Funded programs are expected to return $1.3 billion in lifetime energy bill savings to over 141,000 participating households and 5,700 regional businesses.[37] Clean and renewable energy makes up 16 percent of investments, and investments in these technologies are expected to return $785.8 million in lifetime energy bill savings to 19,600 participating households and 122 regional businesses.[38] Greenhouse gas abatement makes up 4 percent of investments and are expected to avoid the release of 636,000 short tons of CO₂.[39] Finally, direct bill assistance makes up 10 percent of investments accounting for $40.4 million in bill credits and assistance to consumers.[40] One independent report notes that while RGGI states each have their own unique auction revenue investment programs, “[o]verall, greater than 60 percent of proceeds are invested to improve end-use energy efficiency and to accelerate the deployment of renewable energy technologies,”[41] which far exceeds the 25 percent investment “for a consumer benefit or strategic energy purpose” required by the Model Rule.

Whether or not RGGI has been successful is the subject of debate. As designed, it applies only to CO₂ and only to emissions from some 164 power plants with the capacity to generate twenty-five megawatts or more.[42] Since CO₂ accounts for only 20 percent of total GHG emissions in the RGGI states, and electricity generation accounts a fraction of total CO₂ emissions, RGGI’s potential is limited.[43] The Congressional Research Service has thus described the initiative’s contribution to global GHG reductions to be “arguably negligible.”[44] In addition, RGGI significantly overestimated emissions from member states for its first compliance period and set an initial emissions cap that was actually above realized emissions levels.[45] This limited participation in the program and allowed participating facilities to bank substantial amounts of unused allowances.  After the 2012 program review, RGGI lowered the cap by 45 percent between 2014 and 2020.[46] And after the most recent review in 2016, RGGI lowered the cap by an additional 30 percent between 2020 and 2030.[47]  The extent to which these adjustments will hasten emissions reductions to be seen. On the other hand, several studies have shown that the combination of the price signal created by RGGI and the investment of allowance auction proceeds in other environmental programs has been the dominant driver of the recent emissions decline in the region.[48]

1. California’s Cap-and-Invest Program

In 2006, California enacted its landmark climate change law, the Global Warming Solutions Act, also known as AB (“assembly bill”) 32.[49] The statute established an aggressive goal of reducing GHG emissions to 1990 levels by 2020, and an 80 percent reduction from 1990 levels by 2050, across multiple sectors of the state’s economy.[50] AB 32 directed the California Air Resources Board (CARB), the state’s air pollution regulator, to implement a cap-and-trade program, which went into effect in 2013.[51]

According to CARB, the program, which covers approximately 450 entities, “sets a statewide limit on sources responsible for 85 percent of California’s greenhouse gas emissions, and establishes a price signal needed to drive long-term investment in cleaner fuels and more efficient use of energy.”[52] It is “designed to provide covered entities the flexibility to seek out and implement the lowest-cost options to reduce emissions.”[53] The 2013 cap was set at about 2 percent below the emissions level forecast for 2012, declines an additional 2 percent in 2014, and declines 3 percent annually from 2015 to 2020.[54]

Unlike RGGI, California’s program distributes free allocations of emission allowances earlier in the program, but those allocations decrease over time as the program transitions to an auction process.[55] The allocation for most industrial sectors is set at approximately 90 percent of average emissions and is updated annually based on each facility’s production.[56] Electrical distribution and natural gas facilities receive free allowances on the condition that the value of allowances must be used to benefit ratepayers and achieve GHG emission reductions.[57] The allocation for electrical distribution utilities is set at about 90 percent of average emissions, and for natural gas utilities, is based on natural gas supplied in 2011 to non-covered entities.[58] The program includes cost containment measures and allows for the banking of allowances, has a three-year compliance period with an annual obligation to surrender 30 percent of their previous year’s emissions, and allows for offsets of up to 8 percent of a facility’s compliance obligation.[59] AB 32 also employs a substantial penalty mechanism for facilities that fail to meet their compliance obligations: “If the compliance deadline is missed or there is a shortfall, four allowances must be provided for every ton of emissions that was not covered in time.”[60]

California’s cap-and-trade program became linked with Québec’s cap-and-trade system on January 1, 2014 and became linked with Ontario’s cap-and-trade program on January 1, 2018.[61] All allowances issued by the California, Québec, and Ontario programs before and after the linkage can be used for compliance interchangeably across jurisdictions.[62] The three jurisdictions also hold joint allowance auctions.

On January 1, 2015, suppliers of transportation fuels, including gasoline and diesel fuel, became covered under the program.[63] A fuel supplier is defined as “a supplier of petroleum products, a supplier of biomass-derived transportation fuels, a supplier of natural gas including operators of interstate and intrastate pipelines, a supplier of liquefied natural gas, or a supplier of liquefied petroleum gas.”[64] All fuel suppliers that deliver or import 10,000 metric tons or more of annual CO₂ equivalent emissions are subject to a reporting requirement, but only suppliers that reach a 25,000 metric ton threshold are covered by the cap-and-trade program.[65]

Proceeds from the allowance auctions are deposited in the state’s Greenhouse Gas Reduction Fund and are appropriated by the state legislature for “investing in projects that reduce carbon pollution in California, including investments to benefit disadvantaged communities, recycling, and sustainable transit.”[66] As of 2017, some $3.4 billion had been appropriated to state agencies implementing GHG emission reduction programs and projects, collectively referred to as the California Climate Investments.[67] Of that amount, $1.2 billion has been expended on projects “expected to reduce GHG emissions by over 15 million metric tons of carbon dioxide equivalent.”[68]

• Applying a Cap-and-Invest Approach to Northeast and Mid-Atlantic Transportation Sector

Under business-as-usual trends, carbon emissions in RGGI states will be 23 percent below the 1990 baseline in 2030.[69] These states must achieve much deeper emissions reductions across multiple economic sectors in order to achieve their “greenhouse gas emission reduction targets for 2030 that range from 35 to 45 percent, centered around a 40 percent reduction from 1990 levels.”[70] Since transportation represents the largest share of GHG emissions in the RGGI states, that sector should be a primary focus of policymakers’ attention.

One study finds that the levels of emissions reductions necessary to meet the GHG reduction goals of the states in the region could be accomplished “through a suite of clean transportation policies” including financial incentives for the purchase of clean vehicles, such as electric and hybrid light-duty vehicles and natural gas powered heavy-duty vehicles; investments in public transit expansion including bus rapid transit, light rail, and heavy rail; promotion of compact land use; investment in bicycle infrastructure; support for travel demand management strategies; investment in system operations efficiency technologies; and investment in infrastructure to support rail and short-sea freight shipping.[71]

One potential mechanism for achieving the levels of reductions necessary for the RGGI states to meet their targets “would be to implement a transportation pricing policy, which could both achieve GHG reductions and generate proceeds that could be used to fund clean and resilient transportation solutions.”[72] For example, “carbon-content-based fees, mileage-based user fees, and motor-fuel taxes” could “generate an average of $1.5 billion to $6 billion annually in the region.”[73] A mid-range pricing policy that generated approximately $3 billion annually “would create a price signal that would promote alternatives to single-occupancy vehicle travel and result in modest additional emission reductions. It would also raise a cumulative $41 billion to $46 billion for the region during 2015-2030.”[74] Proceeds from such a pricing policy would offset projected declines from existing state and federal gasoline taxes and could be used to fund other clean transportation initiatives.[75]

A hypothetical regional cap-and-invest program for vehicle emissions might be structured as follows. Member states would establish a mandatory regional cap on GHG emissions from the combustion of fossil transportation fuels calculated using volumetric fuel data and fuel emission factors available from the Environmental Protection Agency.[76] The cap would decline over time. States would auction allowances equal to the cap and establish an entity like RGGI, Inc. to administer the program, auction platform, and allowance market.[77] Regulated entities would achieve compliance by purchasing allowances at auction or from other market participants, and possibly with offsets earned from reductions in other aspects of their operations.[78] As with RGGI, individual member states would commit to invest a percentage of their auction proceeds into other initiatives aimed at reducing GHG emissions, including from transportation, and could retain the discretion to decide individually how to allocate those funds.[79]

Because power plants are stationary and relatively few in number, their GHG emissions can be regulated directly, i.e., at the stack. Vehicles, however, are mobile and far more numerous. To regulate the emissions from every fossil fuel powered vehicle at the tailpipe would entail a substantial and possibly prohibitive administrative burden, and would likely be politically unpalatable. An alternative is to use transportation fuel as the point of regulation. Determining which types of fuels and which entities in the fuel supply chain to cover under the cap-and-invest program will be critical.

Transportation fuels that could be covered include gasoline, on-road and off-road diesels, aviation fuels, natural gas, propane/butane, and marine fuels.[80] Considering both the volume of each type of fuel consumed and the comparative emissions resulting from its consumption, the program should cover, at a minimum, gasoline and on-road diesel, which account for approximately 85 percent of carbon emissions from transportation in the region.[81] Other fuels may make up too small a portion of total emissions to justify the additional technical and regulatory burden of covering them.[82] In addition, because all states in the region currently require reporting on gasoline and on-road diesel, the most straightforward approach would be to regulate those fuels. Covering other fuels would require at least some states that do not already require reporting of these fuels to establish new reporting requirements.[83]

Another key design choice is the point of regulation: which entities within the transportation fuel supply chain should be subject to the regulatory obligation to hold sufficient allowances. Because all states in the region have existing reporting and enforcement mechanisms for gasoline and on-road diesel (and many also tax off-road diesel and aviation fuel), one option would be to regulate existing state points of taxation for these fuels.[84] However, state points of taxation are not uniform throughout the region. They can include many different types of entities in the supply chain and in some states the point of taxation is different for different fuels.[85] State regulations also differ with respect to what actions by covered entities trigger the reporting requirement.[86] Many states have points of regulation low in the supply chain, such as entities that purchase fuel from the terminal rack and distribute it to retailers.[87] Thus, while using existing state points of taxation to regulate transportation fuels would make use of existing state regulatory mechanisms, it would also require regulating over one thousand entities across the region, many of which are smaller distributors.[88]

Another possible point of regulation would be one that is as far upstream as possible, i.e., entities that refine fuel in the region for use in the region, and those that import fuel into the region for use in the region.[89] This would include refineries, and for fuels refined outside the region, the first importers into the region.[90] Eight refineries in the region and an unknown number of first importers, including foreign suppliers and suppliers from U.S. states outside the region, would be subject to regulation.[91] This option would require reporting of the destination of all fuel produced in or that enters the region to ensure that a fuel to be used outside the region is not inadvertently covered.[92] While the Energy Information Administration (EIA) and the Environmental Protection Agency generally require destination data from refiners and importers into the U.S. and from interstate suppliers, the agencies do not publicly disclose this data.[93] Thus, regulating refiners and importers would likely cover many fewer entities as compared to existing state points of taxation, most of which would be large petroleum companies.[94] However, because only three states in the region have refineries within their borders, and because importers are not systematically tracked throughout the region, accounting for fuels that are transported through states to prevent double-counting would likely require the establishment of new regional reporting requirements that would include points of origin and destination.[95]

A third possible point of regulation would be entities known as prime suppliers, defined by the EIA as “suppliers who produce, import, or transport product across state boundaries and local marketing areas and sell to local distributors, local retailers, or end-users.”[96] For the region, this includes approximately 30 refiners, other producers of finished fuel, interstate resellers and retailers, and importers.[97] EIA requires these entities to report the amount of fuel, including gasoline, diesel, and aviation fuel, sold or transferred for end use by state on a monthly basis.[98] Although EIA does not publicly provide disaggregated prime supplier data because of statutory privacy restrictions, organizations may enter into data-sharing arrangements with EIA to obtain individual prime supplier data.[99] Thus, while the prime supplier group would include a larger number of regulated entities than importers and refiners, it would provide a consistent definition of a point of regulation already understood by the regulated entities.[100] Regulating prime suppliers, most of which are higher in the supply chain than existing state points of taxation, would also relieve most smaller entities of compliance obligations.[101]

1. Conclusion

States in states in New England and the mid-Atlantic region must make much deeper emissions reductions in the transportation sector in order to meet their overall GHG emission reduction targets. Recognizing this reality, representatives from Connecticut, Delaware, Maryland, Massachusetts, New York, Rhode Island, Vermont, and Washington, D.C., at the 2017 Conference of the Parties to the United Nations Framework Convention on Climate Change, signed a joint statement affirming their commitment to reducing GHG emissions from the transportation sector. In that statement, they identified “market-based carbon mitigation strategies” as potential pathways to achieving needed emissions reductions.[102]

Despite its early struggles, the cap-and-invest approach to mitigating emissions in the northeast and mid-Atlantic electricity generation sector has achieved, at a minimum, some emissions reductions, substantial investment in other GHG mitigation efforts, and overall net benefits within the region. California has achieved substantial GHG emissions reductions across multiple sectors, including transportation, and has invested substantial sums in a suite of other green programs. These examples demonstrate the potential of using a cap-and-invest approach to accomplish environmentally and economically sound policy objectives, both within the RGGI region and in the context of transportation. If properly structured, such an approach could achieve significant emissions reductions in the region and raise substantial funds for other GHG mitigation and climate change adaptation initiatives.

How would a cap-and-invest approach to transportation emissions be structured? The fundamental aspects of RGGI and California’s cap-and-invest program are similar in most respects. California occupies a unique position in federal regulation of automobile emissions and had the benefit of constructing a program applicable only to itself, although its program is now linked with programs in other jurisdictions. RGGI already covers much of the Northeast and mid-Atlantic region, could be expanded to include other sectors of those states’ economies, including transportation, and could be linked with the California-Québec-Ontario cap-and-invest system to create a larger and more efficient allowance market.

Owing to the practical differences between directly regulating emissions from power plants and indirectly regulating transportation emissions by fuel type and supply chain point, the mechanics of using a cap-and-invest approach to mitigate transportation emissions, especially across jurisdictions, poses some potentially challenging design issues. The program should cover, at a minimum, gasoline and on-road diesel. Identifying the appropriate point of regulation will require policymakers to consider a host of technical, administrative, and policy issues. Existing state points of taxation are numerous and vary by jurisdiction and by fuel type within jurisdictions. Upstream refiners and importers are far fewer in number but regulating these entities would likely require the development of new regional reporting mechanisms that might make this option administratively undesirable. While the prime suppliers group is larger in number than refiners and importers, regulating prime suppliers would provide a consistent state-based definition of a point of regulation already understood by the regulated entities, and would not subject most smaller entities to complia

* James Flynn is an LL.M. candidate at New York University School of Law and the graduate editor of the NYU Environmental Law Journal.

[1] See Energy Information Administration, State Carbon Dioxide Emissions Data (last visited Feb. 10, 2018), https://www.eia.gov/environment/emissions/state/.

[2] See Gabe Pacyniak, et al., Reducing Greenhouse Gas Emissions from Transportation: Opportunities in the Northeast and Mid-Atlantic, Georgetown Climate Center 8 (2015), http://www.georgetownclimate.org/files/report/GCC-Reducing_GHG_Emissions_from_Transportation-11.24.15.pdf.

[3] Regional Greenhouse Gas Initiative, Welcome (last visited Feb. 10, 2018), https://www.rggi.org.

[4] Regional Greenhouse Gas Initiative, RGGI Benefits (last visited Feb. 10, 2018), https://www.rggi.org/investments/proceeds-investments.

[5] Brian C. Murray and Peter T. Maniloff, Why have greenhouse emissions in RGGI states declined? An econometric attribution to economic, energy market, and policy factors, Energy Economics 51, 588 (2015).

[6] See Paul J. Hibbard, et al., The Economic Impacts of the Regional Greenhouse Gas Initiative on Nine Northeast and Mid-Atlantic States, Analysis Group 5 (July 14, 2015), http://www.analysisgroup.com/uploadedfiles/content/insights/publishing/analysis_group_rggi_report_july_2015.pdf; Ceres, The Regional Greenhouse Gas Initiative: A Fact Sheet (2015), https://www.ceres.org/sites/default/files/Fact%20Sheets%20or%20misc%20files/RGGI%20Fact%20Sheet.pdf.

[7] Regional Greenhouse Gas Initiative, The Investment of RGGI Proceeds in 2015 3 (Oct. 2017), https://www.rggi.org/sites/default/files/Uploads/Proceeds/RGGI_Proceeds_Report_2015.pdf.

[8] See Energy Information Administration, supra note 1; Gerald B. Silverman and Adrianne Appel, Northeast States Hit the Brakes on Carbon Emissions From Cars, BNA (Oct. 16, 2017), https://www.bna.com/northeast-states-hit-n73014470981/.

[9] Pacyniak, supra note 2.

[10] Id.

[11] See Gabe Pacyniak, et al., Reducing Greenhouse Gas Emissions from Transportation: Opportunities in the Northeast and Mid-Atlantic, Appendix 3: State GHG Reduction Goals in the TCI Region, Georgetown Climate Center 4-13 (2015), http://www.georgetownclimate.org/files/report/Apndx3_TCIStateEnergyClimateGoals-Nov2015-v2_1.pdf.

[12] See, e.g., Center for Climate and Energy Solutions, California Cap and Trade (last visited Feb. 10, 2018), https://www.c2es.org/content/california-cap-and-trade/.

[13] See Joel B. Eisen, et al., Energy, Economics and the Environment 326 (4th ed. 2015).

[14] Id.

[15] Id.

[16] See id.

[17] Id.

[18] See id.

[19] See id.

[20] See Regional Greenhouse Gas Initiative, supra note 3.

[21] See id.

[22] Regional Greenhouse Gas Initiative, Program Design (last visited Feb. 10, 2018), https://www.rggi.org/program-overview-and-design/elements.

[23] Regional Greenhouse Gas Initiative, A Brief History of RGGI (last visited Feb. 10, 2018), https://www.rggi.org/program-overview-and-design/design-archive.

[24] Id.

[25] Jonathan L. Ramseur, The Regional Greenhouse Gas Initiative: Lessons Learned and Issues for Congress,

Congressional Research Service 3 (May 16, 2017), https://fas.org/sgp/crs/misc/R41836.pdf.

[26] Id.

[27] Id.

[28] Id.

[29] Id.

[30] Id.

[31] Id. at 4.

[32] Id. at 3.

[33] See Brian M. Jones, Christopher Van Atten, and Kaley Bangston, A Pioneering Approach to Carbon Markets: How the Northeast States Redefined Cap and Trade for the Benefit of Consumers, M.J. Bradley & Associates 4 (Feb. 2017), http://www.mjbradley.com/sites/default/files/rggimarkets02-15-2017.pdf.

[34] Regional Greenhouse Gas Initiative, The Investment of RGGI Proceeds in 2015 (Oct. 2017), https://www.rggi.org/sites/default/files/Uploads/Proceeds/RGGI_Proceeds_Report_2015.pdf.

[35] Id. at 3.

[36] Id.

[37] Id.

[38] Id.

[39] Id.

[40] Id.

[41] Jones, supra note 33.

[42] Id.

[43] See id. at 3.

[44] Id. at 17.

[45] Id. at 4.

[46] Regional Greenhouse Gas Initiative, Elements of RGGI (last visited Feb. 10, 2018), https://www.rggi.org/program-overview-and-design/elements.

[47] Regional Greenhouse Gas Initiative, Summary of RGGI Model Rule Updates 1 (Dec. 19, 2017), https://www.rggi.org/program-overview-and-design/elements.

[48] See Murray, supra note 5 at 25-26; Man-Keun Kim and Taehoo Kim, Estimating impact of regional greenhouse gas initiative on coal to gas switching using synthetic control methods, Energy Economics 59, 334 (2016).

[49] California Air Resources Board, Assembly Bill 32 Overview (last visited Feb. 10, 2018), https://www.arb.ca.gov/cc/ab32/ab32.htm.

[50] Id.

[51] Id.

[52] Id.

[53] California Air Resources Board, Overview of ARB Emissions Trading Program 1 (last visited Feb. 10, 2018), https://www.arb.ca.gov/cc/capandtrade/guidance/cap_trade_overview.pdf.

[54] Id.

[55] Id.

[56] Id.

[57] Id.

[58] Id.

[59] Id. at 2.

[60] Id.

[61] California Air Resources Board, Facts About The Linked Cap-and-Trade Programs 1 (updated Dec. 1, 2017), https://www.arb.ca.gov/cc/capandtrade/linkage/linkage_fact_sheet.pdf.

[62] Id.

[63] California Air Resources Board, Information for Entities That Take Delivery of Fuel for Fuels Phased into the Cap- and-Trade Program Beginning on January 1, 2015 1 (last visited Feb. 10, 2018), https://www.arb.ca.gov/cc/capandtrade/guidance/faq_fuel_purchasers.pdf.

[64] Id. at 2.

[65] Id.

[66] California Air Resources Board, 2017 Report to the Legislature on California Climate Investments Using Cap-And-Trade Auction Proceeds i (2017), https://www.arb.ca.gov/cc/capandtrade/auctionproceeds/cci_annual_report_2017.pdf.

[67] Id.

[68] Id. at v.

[69] Elizabeth A. Stanton, et al., The RGGI Opportunity, Synapse Energy Economics, Inc. 3 (revised Feb. 5, 2016), http://www.synapse-energy.com/sites/default/files/The-RGGI-Opportunity.pdf. Notably, this study took into account the anticipated effect of the Clean Power Plan, which President Donald Trump and Environmental Protection Agency Administrator Scott Pruitt propose to repeal. See id. at 4.

[70] Id. at 2.

[71] Pacyniak, supra note 2 at 22. The Georgetown Climate Center serves as the facilitator for the Transportation Climate Initiative, which is “a collaboration of the agency heads of the transportation, energy, and environment agencies of 11 states and the District of Columbia, who in 2010 committed to work together to improve efficiency and reduce greenhouse gas emissions from the transportation sector throughout the northeast and mid-Atlantic region.” Id. at i.

[72] Id. at 25.

[73] Id.

[74] Id.

[75] Id. at 26-27.

[76] Drew Veysey, Gabe Pacyniak, and James Bradbury, Reducing Transportation Emissions in the Northeast and Mid-Atlantic: Fuel System Considerations, Georgetown Climate Center 7 (Nov. 13, 2017), http://www.georgetownclimate.org/files/report/GCC_TransportationFuelSystemConsiderations_Nov2017.pdf.

[77] Id.

[78] Id.

[79] See id.

[80] Id. at 9.

[81] See id. at 11-13.

[82] See id. at 33.

[83] Id. at 20.

[84] Id.

[85] Id. at 16.

[86] Id.

[87] Id. at 17.

[88] Id. at 33.

[89] Id. at 21.

[90] Id.

[91] Id.

[92] Id. at 22.

[93] Id.

[94] Id. at 33.

[95] Id.

[96] Id. at 24.

[97] Id.

[98] Id.

[99] Id. at 25.

[100] Id. at 33

[101] Id.

[102] See Transportation and Climate Initiative, Northeast and Mid-Atlantic States Seek Public Input As They Move Toward a Cleaner Transportation Future (Nov. 13, 2017), https://www.transportationandclimate.org/northeast-and-mid-atlantic-states-seek-public-input-they-move-toward-cleaner-transportation-future; Sierra Club, Northeast and Mid-Atlantic Governors Lauded for Announcement on Transportation and Climate, Press Release (Nov. 13, 2017), https://www.sierraclub.org/press-releases/2017/11/northeast-and-mid-atlantic-governors-lauded-for-announcement-transportation.

This post is part of the Environmental Law Review Syndicate, a multi-school online forum run by student editors from the nation’s leading environmental law reviews.

__________________________________________

By Jennifer Golinsky, Staff Contributor

When the EPA released its draft of the Clean Power Plan (CPP) in June 2014,[1] commentators were quick to draw comparisons[2] to Obamacare (i.e., the Patient Protection and Affordable Care Act, hereinafter the ACA).[3] One journalist even dubbed the CPP “Obamacare for the Air” because the Clean Power Plan and the healthcare reform law are both “intensely polarizing” and “numbingly complex in an effort to ensure flexibility and fairness, based on a market system . . . likely to transform a key sector of the economy for decades to come.”[4]

From a technical standpoint, both the CPP and ACA offer a variety of tools and federal assistance to help states decide how to comply.[5] Under both schemes, states can choose to run their own system, run a system in partnership with the federal government, or not run any system at all (at which point the federal government steps in to run the system for that state).[6] And, once a state decides on a compliance program, it is not stuck with it: both the CPP and the ACA allow a state to transition later on to a different level of involvement in running its own system.[7] Finally, both the CPP and the ACA drew fierce legal challenges immediately upon their promulgation and enactment, respectively.[8]

However, one area where the CPP does not resemble the ACA is how states that oppose the plan are managing their compliance efforts. Of the twenty-eight states that challenged the ACA in court,[9] twenty-two declined to establish a state-based marketplace.[10] Those states automatically defaulted to a “federally-facilitated” (i.e., entirely federally run) program[11] when the ACA marketplaces went into effect on January 1, 2014.[12] In contrast, of the twenty-seven states with CPP challenges pending before the D.C. Circuit,[13] a significant majority are actively developing compliance strategies.[14] A total of twenty of the twenty-seven states challenging the CPP have announced that they are drafting plans or requesting a two-year extension on the deadline to submit a plan,[15] though Kentucky has made it clear that its request for an extension “should not be implied as working toward a compliance plan.”[16] Though some states have made it abundantly clear that they will not develop a formal state compliance plan,[17] none of the states are remaining completely obstinate about the CPP. All of the states challenging the CPP are reportedly at least undertaking some CPP compliance activities, including stakeholder meetings and public listening sessions, if not “actively engag[ing] with the Plan.”[18]

So, what accounts for the different approach states are taking to CPP compliance, as compared with states’ reticence to comply with the ACA? States’ complaints about the CPP and the ACA are, after all, very similar. States recognize that the CPP will have a major economic impact[19] and argue that it infringes on their sovereignty;[20] they said the same things about the ACA.[21] Following are four possible explanations for states’ more proactive approach to CPP compliance:

The need for long-range planning in the utility power sector

Electric utilities must make long-range decisions—forecasting decades into the future—about infrastructure, availability of resources, siting of power plants, reliability and security of the electricity grid, rate structures, multi-year or multi-decade power purchase contracts, and so on.[22] Layered onto the years it takes to make and implement these decisions is the time required to comply with federal, state, and local regulations—which, of course, are regularly evolving. Final CPP state implementation plans are due to EPA by September 6, 2016, with the possibility of a two-year extension (which requires an initial submittal, also due on September 6, 2016, demonstrating a state’s progress toward developing a final plan).[23] EPA has stated that it will approve or disapprove of state plans within one year of their submittal.[24]

The CPP’s standards are set to go into effect in 2022,[25] so a state that misses the September 2016 deadline because it dragged its feet preparing an approvable state plan (if it decides to prepare a plan at all) may leave its utilities with only a few years to react to an approved plan before compliance is required. Given the amount of lead time utilities need before they can put many of their business decisions into action, and considering the utilities’ reluctance to be subject to a federal plan,[26] states that have already started their CPP planning give their utilities a head start towards achieving the regulatory certainty they need to engage in long-term planning. Additionally, though the states’ aforementioned commitments to draft their CPP plans predate the D.C. Circuit’s January 21, 2016 denial of the motion to stay the CPP during the court’s review,[27] the denial is all the more reason for states to continue to proactively work toward timely submittal of their plans.

Early attempts to comply with the CPP also make it more likely a state can benefit from the CPP’s optional Clean Energy Incentive Program (CEIP). The CEIP encourages states to invest in renewable energy and energy efficiency projects that deliver results during 2020 or 2021, rewarding them with emissions allowances or emissions rate credits that can be banked and used to maintain CPP compliance in the event a state has an unforeseen, emergency reliability issue.[28]

The need for regional planning and cooperation in the utility power sector

Power-plant operations are not all contained neatly within state borders: many plants distribute power across state lines, and electricity grids are similarly interconnected.[29] Naturally, such a system requires detailed coordination among states, as will adapting the system to comply with the CPP. States would rather make these important choices for themselves than allow the federal government to make some choices on their behalf, which is effectively what would happen if a state defaults to a federal CPP plan. Getting started early on their CPP planning has allowed a number of states to productively engage with their neighbors in an effort to lower the costs of compliance by setting up a regional emissions-trading program.[30] The CPP allows intrastate emissions trading and encourages interstate trading, but it is only permitted between states that have adopted the same emissions standards (i.e., mass-based states can only trade with mass-based states, and rate-based states can only trade with rate-based states).[31] States that delay in their CPP planning are missing out on the opportunity to weigh in on regional discussions about which type of emissions standards are best for that region.

The ACA also allows for regional marketplaces, but the states have yet to take advantage of that cost-cutting option.[32] Several states, however, are beginning to consider the regional-marketplace option in light of the sunset on federal funding to help states run their own state-based marketplaces.[33]

Submitting a state CPP plan involves greater opportunity for public participation

Though the public was able to comment on many ACA regulations, including the rules that govern whether a state marketplace is compliant with the law,[34] the Department of Health and Human Services did not seek public comment on a state’s “Exchange Blueprint” before the agency approved it.[35] That means a state’s choice of whether to pursue a state-based marketplace or default to a federally-facilitated marketplace had no impact how much the public could formally weigh in on HHS’s administrative decisions under the APA. The CPP, in contrast, gives the public more opportunities to be involved in the administrative review process when a state opts to submit its own implementation plan. First, the CPP requires a state to demonstrate that its plan was developed through robust public participation, including opportunity for public comment.[36] Second, EPA’s decision to disapprove of a state-submitted plan is subject to notice and comment before a federal plan would take effect.[37]

One of the grounds on which the suing states criticize the CPP is that it is an administrative overreach; that it is the kind of major economic and political decision entrusted to Congress, the body which is directly accountable to the will of the people.[38] Presumably then, these states would want the public to have as many opportunities as possible to involve itself in EPA’s CPP decisions, given that the notice-and-comment process also requires administrative agencies to be accountable to the will of the people (or to at least respond directly to their comments and explain why it did not take their suggestions). States can ensure that there are more opportunities for public comment if they submit their own CPP plans to EPA. And, of course, more solicitations of public comment by EPA means more opportunities for opponents to seek judicial review of the CPP.

Unlike with the ACA, states are experienced in dealing with the Clean Air Act

The Clean Air Act (CAA), the background legal authority for the CPP, is old hat. The CAA is stable, settled law—enacted in 1970, and without significant amendment since 1990.[39] States have years of experience developing their own implementation plans to comply with the CAA emissions standards for certain types of pollutants.[40] They have routinely opted to create State Implementation Plans to comply with the CAA’s National Ambient Air Quality Standards, which, like the CPP, employs a federal-state partnership to curtail air pollution.[41] Through this process, states and utilities have developed the “muscle memory” necessary for complying with EPA emissions rules.[42]

The ACA, in contrast, was brand new law when it was enacted in 2010. States may have been less inclined to invest their resources in developing insurance marketplaces to comply with a law many were skeptical would even be upheld.

Conclusion

Litigating the CPP will be “a marathon, not a sprint,”[43] and we are still in the nascent stages of that process. States may well end up changing their respective approaches in response to major developments in the litigation, especially if the Supreme Court responds favorably to their January 26, 2016 request for a stay of the CPP.[44] Other things equal, given that most states have already hit the ground running with a proactive approach to the CPP, such a change is not foreseeable—at least not until EPA starts issuing decisions on their individual CPP submissions several years from now.

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[1] Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 79 Fed. Reg. 38,830 (proposed June 18, 2014) (to be codified at 40 C.F.R. pt. 60), https://www.gpo.gov/fdsys/pkg/FR-2014-06-18/pdf/2014-13726.pdf. The final rule for the Clean Power Plan—a set of guidelines for states to follow in developing plans to reduce greenhouse gas emissions from existing power plants—was promulgated on October 23, 2015 (Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662 (Oct. 23, 2015) (to be codified at 40 C.F.R. pt. 60), https://www.gpo.gov/fdsys/pkg/FR-2015-10-23/pdf/2015-22842.pdf), along with a proposed federal plan and model trading rules (Federal Plan Requirements for Greenhouse Gas Emissions From Electric Utility Generating Units Constructed on or Before January 8, 2014; Model Trading Rules; Amendments to Framework Regulations, 80 Fed. Reg. 64,966 (proposed Oct. 23, 2015) (to be codified at 40 C.F.R. pts. 60, 62, and 78), https://www.gpo.gov/fdsys/pkg/FR-2015-10-23/pdf/2015-22848.pdf).

[2] See, e.g., Coral Davenport & Peter Baker, Taking Page From Health Care Act, Obama Climate Plan Relies on States, N.Y. Times (June 4, 2014), http://www.nytimes.com/2014/06/03/us/politics/obama-epa-rule-coal-carbon-pollution-power-plants.html; David J. Unger, EPA Carbon Limits: An ‘Obamacare’ for Climate Change, Christian Sci. Monitor (June 4, 2014), http://www.csmonitor.com/Environment/Energy-Voices/2014/0602/EPA-carbon-limits-an-Obamacare-for-climate-change-video; Michael Bastasch,‘Obamacare 2.0!’ Critics Slam EPA Climate Rule as Threat to Electrical Grid, Daily Caller (June 6, 2014, 1:37 PM), http://dailycaller.com/2014/06/06/obamacare-2-0-critics-slam-epa-climate-rule-as-threat-to-electrical-grid/.

[3] See Summary of the Affordable Care Act, Kaiser Fam. Found., http://files.kff.org/attachment/fact-sheet-summary-of-the-affordable-care-act (last modified Apr. 25, 2013), for a detailed summary of the Affordable Care Act, a comprehensive healthcare reform law enacted on March 23, 2010.

[4] Jason Mark, EPA’s New Regulations to Cut Carbon Emissions are Obamacare for the Air, Daily Beast (June 2, 2014, 5:45 AM), http://www.thedailybeast.com/articles/2014/06/02/epa-s-new-regulations-to-cut-carbon-emissions-are-obamacare-for-the-air.html.

[5] See U.S. Envtl. Prot. Agency, Overview of the Clean Power Plan (Aug. 6, 2015), http://www.epa.gov/sites/production/files/2015-08/documents/fs-cpp-overview.pdf; Ctrs. for Medicare & Medicaid Servs., State Exchange Implementation Questions and Answers (Nov. 29, 2011), https://www.cms.gov/CCIIO/Resources/Files/Downloads/exchange_q_and_a.pdf.

[6] See U.S. Envtl. Prot. Agency, Clean Power Plan Proposed Federal Plan 2 (Oct. 8, 2015), http://www.epa.gov/sites/production/files/2015-10/documents/fs-cpp-proposed-federal-plan.pdf; 2015 State Legislation on Health Exchanges/Marketplaces Structure, Nat’l Conf. of St. Legislatures,

http://www.ncsl.org/Portals/1/Documents/Health/Changes_in_Health_Exchange_Structure-2015-_Final2.pdf (last updated July 30, 2015); Ctr. for Consumer Info. & Ins. Oversight, Blueprint for Approval of Affordable State-based and State Partnership Insurance Exchanges – Frequently Asked Questions (Nov. 9, 2012), https://www.cms.gov/CCIIO/Resources/Fact-Sheets-and-FAQs/hie-blueprint-states.html.

[7] See Clean Power Plan Proposed Federal Plan, supra note 6, at 2; Nat’l Conf. of St. Legislatures, supra note 6.

[8] West Virginia v. EPA, No. 15-1363 (D.C. Cir. filed Oct. 23, 2015) (pending challenge to the CPP); Florida v. U.S. Dep’t of Health and Human Servs., 780 F. Supp. 2d 1256 (N.D. Fla. 2011) (district court opinion from ACA challenge filed Mar. 23, 2010); Virginia ex rel. Cuccinelli v. Sebelius, 728 F. Supp. 2d 768 (E.D. Va. 2010) (district court opinion from ACA challenge filed Mar. 23, 2010).

[9] This includes (1) the twenty-six states which acted jointly in Nat’l Fed’n of Indep. Buss. V. Sebelius (NFIB), 132 S. Ct. 2566 (2012): Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin, and Wyoming; (2) Missouri, which filed its own suit that was later joined on appeal (Kinder v. Geithner, 695 F.3d 772 (8th Cir. 2012)) by twenty-one of the twenty-six states from NFIB; and (3) Virginia, which sued on its own in Cuccinelli, 728 F. Supp. 2d 768. For the sake of simplicity—and ease of comparison to the states involved in West Virginia v. EPA—this does not include the states which were not part of the three aforementioned ACA suits but challenged portions of the law in later suits.

[10] The twenty-two states were: Alabama, Alaska, Arizona, Florida, Georgia, Indiana, Kansas, Louisiana, Maine, Michigan, Mississippi, Missouri, Nebraska, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Virginia, Wisconsin, and Wyoming. See Health Insurance Exchanges or Marketplaces: State Profiles and Actions, Nat’l Conf. of St. Legislatures, http://www.ncsl.org/Portals/1/Documents/Health/Health_Insurance_Exchanges_State_Profiles.pdf (last modified Oct. 20, 2015).

[11] See State Health Insurance Marketplace Types, 2016, Kaiser Fam. Found., http://kff.org/health-reform/state-indicator/state-health-insurance-marketplace-types/#table (last visited Jan. 29, 2016).

[12] On January 1, 2014, twenty-eight states were federally facilitated, fifteen states and the District of Columbia were state based (including Idaho’s state-based marketplace, which used the federal healthcare.gov site instead of a state website (this is called a “federally-supported state-based marketplace,” id.) and seven states ran their marketplaces in partnership with the federal government. See Nat’l Conf. of St. Legislatures, supra note 10. In 2016, twenty-seven states are federally facilitated, sixteen states and the District of Columbia are state based (including four which are federally-supported state-based marketplaces), and seven states operate marketplaces in partnership with the federal government. See Kaiser Fam. Found., supra note 11. Kentucky currently has a state-based marketplace, but its governor plans to dismantle it and transition to a federally-facilitated marketplace in 2017. See id. at n.3.

[13] The twenty-six states opposing the CPP in West Virginia v. EPA are Alabama, Arizona, Arkansas, Colorado, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Missouri, Montana, Nebraska, New Jersey, North Carolina, Ohio, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia, Wisconsin, and Wyoming. See Petition for Review, West Virginia v. EPA, No. 15-1363 (D.C. Cir. filed Oct. 23, 2015), available at https://www.edf.org/sites/default/files/content/2015.10.23_states_111d_petition_for_review.pdf. North Dakota filed its own suit. See Petition for Review, North Dakota v. EPA, No 15-1381 (D.C. Cir. filed Oct. 23, 2015), available at https://www.edf.org/sites/default/files/content/2015.10.23_nd_petition_for_review.pdf.

[14] See Elizabeth Harball, Most States Suing EPA’s Climate Rule are also Mulling How to Comply, ClimateWire (Nov. 9, 2015), http://www.eenews.net/stories/1060027684.

[15] See E&E’s Power Plan Hub: Legal Challenges, E&E Publishing, http://www.eenews.net/interactive/clean_power_plan#legal_challenge_status_chart (last visited January 29, 2016); Rod Kuckro, Ky. Governor to Seek Extension from EPA, EnergyWire (Jan. 25, 2016), http://www.eenews.net/energywire/stories/1060031079; Wyoming Regulators Seek $550K for Climate Change Planning, Associated Press (Jan. 18, 2016, 1:04 PM), http://www.thestate.com/news/business/national-business/article55267605.html; Missouri Comprehensive State Energy Plan, Mo. Dep’t of Econ. Dev., Div. of Energy 204 (October 2015), https://energy.mo.gov/energy/docs/MCSEP.pdf.

[16] Kuckro, supra note 15.

[17] For example, EPA was told that “New Jersey is not in any way, shape or form working with EPA on complying with the so-called Clean Power Plan.” David Giambusso, Responding to EPA Official, DEP Refuses to Comply with Power Plan, Politico New Jersey (Dec. 11, 2015, 5:50 PM), http://www.capitalnewyork.com/article/new-jersey/2015/12/8585455/responding-epa-official-dep-refuses-comply-power-plan.

[18] See Joint Reply in Support of Motions for Stay and for Expedited Consideration—Exhibit A, West Virginia v. EPA, No. 15-1363 (D.C. Cir. filed Oct. 23, 2015), available at https://www.edf.org/sites/default/files/content/2015.12.23_states_reply_in_support_of_motions_for_stay.pdf; Joel Kirkland, Obama’s A-Team Touts Clean Power Plan’s Enforceability, EnergyWire (Dec. 7, 2015), http://www.eenews.net/stories/1060029064. This is in addition to the states which are either defending the CPP in court or have not taken sides in the suit—each of these states is developing a plan, except for the states which are exempt from the CPP (Alaska and Hawaii because they are noncontiguous, Vermont and the District of Columbia because neither state has power plants that fall under the CPP framework). See E&E Publishing, supra note 15; Clean Power Plan – A Summary, E&E Publishing, http://www.eenews.net/interactive/clean_power_plan/fact_sheets/rule (last visited January 29, 2016).

[19] See, e.g., State Petitioners’ Motion for Stay and for Expedited Consideration of Petition for Review, West Virginia v. EPA, No. 15-1363, at 19 (D.C. Cir. filed Oct. 23, 2015), available at https://www.edf.org/sites/default/files/content/2015.10.23_states_motion_for_stay_expedited_consideration.pdf.

[20] See, e.g., Joint Reply in Support of Motions for Stay and for Expedited Consideration, West Virginia v. EPA, No. 15-1363, at 2 (D.C. Cir. filed Oct. 23, 2015), available at https://www.edf.org/sites/default/files/content/2015.12.23_states_reply_in_support_of_motions_for_stay.pdf.

[21] For examples of states commenting on the ACA’s economic impact, see Statement from Fla. Att’y Gen. Pam Bondi on the Supreme Court’s Decision in the Health Care Lawsuit (June 28, 2012), available at http://www.myfloridalegal.com/newsrel.nsf/newsreleases/76DE42E337565A5D85257A2B0065C6D2; Statement from S.C. Gov. Nikki Haley on Supreme Court’s Health Care Ruling (June 28, 2012), available at http://www.governor.sc.gov/News/June2012/Pages/default.aspx; and Statement from Tex. Gov. Rick Perry on Health Care Mandate Ruling (June 28, 2012), available at http://www.texasmonthly.com/politics/texas-reacts-to-the-health-care-mandate-ruling/. For an example of the states’ claim that the ACA infringes upon their sovereignty, see State Petitioners’ Petition for Writ of Certiorari, NFIB, 132 S. Ct. 2566 (No. 11-400), at 8, available at http://www.supremecourt.gov/docket/PDFs/11-400%20Cert%20Petition.pdf.

[22] See generally U.S. Envtl. Prot. Agency, Energy and Environment Guide to Action ch. 7.1, at 7-7 (2015 ed.), http://www3.epa.gov/statelocalclimate/documents/pdf/GTA_Chapter_7.1_508.pdf.

[23] Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662, 64,860 (Oct. 23, 2015) (to be codified at 40 C.F.R. pt. 60), https://www.gpo.gov/fdsys/pkg/FR-2015-10-23/pdf/2015-22842.pdf.

[24] Id.

[25] Id. at 64,664.

[26] See Gavin Bade, NARUC 2015: Utilities Push Regulators to Shift Focus to Clean Power Plan Compliance, UtilityDive (Nov. 10, 2015), http://www.utilitydive.com/news/naruc-2015-utilities-push-regulators-to-shift-focus-to-clean-power-plan-co/408939/.

[27] Order Denying the Motions for Stay, West Virginia v. EPA, No. 15-1363 (D.C. Cir. filed Oct. 23, 2015), available at https://web.law.columbia.edu/sites/default/files/microsites/climate-change/files/order_denying_stay.pdf.

[28] Federal Plan Requirements for Greenhouse Gas Emissions From Electric Utility Generating Units Constructed on or Before January 8, 2014; Model Trading Rules; Amendments to Framework Regulations, 80 Fed. Reg. 64,966, 64,982 (proposed Oct. 23, 2015) (to be codified at 40 C.F.R. pts. 60, 62, and 78), https://www.gpo.gov/fdsys/pkg/FR-2015-10-23/pdf/2015-22848.pdf).

[29] See U.S. Envtl. Prot. Agency, Components of the Clean Power Plan 3 (Aug. 13, 2015), http://www.epa.gov/sites/production/files/2015-08/documents/fs-cpp-state-goals.pdf.

[30] Emily Holden, Despite Political Rhetoric, 41 States Exploring Clean Power Plan Options, ClimateWire (May 18, 2015), http://www.eenews.net/stories/1060018680 (“Reports from grid organizations and think tanks routinely stress that regional collaboration limits costs. If one state has a tough goal and a neighboring state has an easier goal and the ability to build cheaper zero-carbon energy, both states can benefit . . . .”).

[31] See U.S. Envtl. Prot. Agency, supra note 5, at 7.

[32] Kaiser Fam. Found., supra note 3, at 4.

[33] Sarah Ferris, Exclusive: States Quietly Consider ObamaCare Exchange Mergers, The Hill (May 22, 2015, 6:00 AM), http://thehill.com/policy/healthcare/242885-exclusive-states-consider-obamacare-mergers.

[34] Patient Protection and Affordable Care Act; Establishment of Exchanges and Qualified Health Plans; Exchange

Standards for Employers, 77 Fed. R. 18310, 18,312 (Mar. 27, 2012) (to be codified at 45 CFR Parts 155, 156, and 157), https://www.gpo.gov/fdsys/pkg/FR-2012-03-27/pdf/2012-6125.pdf.

[35] Id. at 18,316-17.

[36] Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662, 64,848 (Oct. 23, 2015) (to be codified at 40 C.F.R. pt. 60), https://www.gpo.gov/fdsys/pkg/FR-2015-10-23/pdf/2015-22842.pdf.

[37] U.S. Envtl. Prot. Agency, Legal Memorandum Accompanying Clean Power Plan for Certain Issues 21-22 (Nov. 2015); http://www.epa.gov/sites/production/files/2015-11/documents/cpp-legal-memo.pdf.

[38] State Petitioners’ Motion for Stay, supra note 19, at 6.

[39] See U.S. Envtl. Prot. Agency, Summary of the Clean Air Act, http://www.epa.gov/laws-regulations/summary-clean-air-act (last updated Nov. 17, 2015).

[40] Elana Schor, Casting EPA Rule as the Next Obamacare Could Prove a Tough Sell, E&E Daily (June 18, 2014), http://www.eenews.net/stories/1060001493.

[41] Bob Sussman, The Clean Power Plan: Will States Choose to Comply?, PlanetPolicy (Jan. 20, 2015, 2:46 PM), http://www.brookings.edu/blogs/planetpolicy/posts/2015/01/20-clean-power-plan-states-comply-sussman.

[42] Robert Walton, States Leaning Toward Mass-Based CPP Compliance, Regional Cooperation, UtilityDive (Oct. 21, 2015), http://www.utilitydive.com/news/states-leaning-toward-mass-based-cpp-compliance-regional-cooperation/407691/.

[43] Legal Challenges – Overview & Documents, E&E Publishing, http://www.eenews.net/interactive/clean_power_plan/fact_sheets/legal (last visited January 29, 2016).

[44] Lyle Denniston, States Move to Block “Clean Power Plan” (UPDATED), SCOTUSblog (Jan. 26, 2016, 9:28 PM), http://www.scotusblog.com/2016/01/states-move-to-block-clean-power-plan/.