By: Richard Revesz, dean emeritus and Lawrence King Professor of Law at New York University School of Law and director of the Institute for Policy Integrity, and Denise Grab and Jack Lienke, senior attorneys at the Institute for Policy Integrity.
In a critical federal court hearing this month, challengers of the Clean Power Plan, the Obama administration’s signature climate change policy, will characterize the Plan as an “enormous and transformative expansion” of the Environmental Protection Agency’s (EPA) regulatory power.
Their legal briefs argue that, in its pursuit of reductions in carbon dioxide emissions from the nation’s electric sector, the EPA dramatically exceeded the limits of its Clean Air Act authority and commandeered a regulatory arena — the electricity sector — that has traditionally been managed by the states. They claim there is “no precedent for this invasion of state sovereignty.”
But the Clean Power Plan, while certainly a very important rule, is not the boundary-breaking behemoth that the petitioners make it out to be. On the contrary, it explicitly acknowledges and complies with the many constraints that Clean Air Act places on EPA’s authority to regulate existing power plants. Furthermore, the plan’s basic components have already been used in several prior Clean Air Act regulations, issued under administrations of both parties.
The Clean Power Plan’s compliance with statutory limits
The “Clean Power Plan” is EPA’s shorthand for a set of “emission guidelines” for power plants that it issued pursuant to Section 111(d) of the Clean Air Act. The text of Section 111 contains eight significant constraints on EPA’s authority to craft such guidelines:
1. The EPA must identify the “best system of emission reduction” and calculate the “degree of emission limitation achievable through the application” of that system. Thus, the agency cannot arbitrarily declare that existing sources in the relevant category must reduce their emissions by a particular amount. Instead, it must survey available systems for reducing emissions and calculate the level of reduction achievable using what it considers the best of those systems.
2. In identifying the best system, the EPA must consider the amount of emission reductions it will yield. It goes without saying that a system of emission reduction is unlikely to be “best” if it does a poor job reducing emissions.
3. In identifying the best system, the EPA must consider the system’s cost. As explained in U.S. Court of Appeals for the District of Columbia Circuit case law, the EPA cannot adopt standards that can be achieved only at “excessive,” “exorbitant” or “unreasonable” expense.
4. In identifying the best system, the EPA must consider “nonair quality health and environmental impacts.” For example, the use of a “scrubber” to remove sulfur dioxide emissions from a power plant’s smokestack produces coal ash, which can, if improperly stored, contaminate groundwater. The EPA cannot adopt a standard that does more harm than good due to such “cross-media environmental impacts.”
5. In identifying the best system, EPA must consider “energy requirements.” The EPA cannot deem a system “best” if it imperils access to reliable energy sources.
6. The EPA must find that its preferred method of emission reduction has been “adequately demonstrated.” Under D.C. Circuit case law, EPA cannot identify a “purely theoretical or experimental means of preventing or controlling air pollution” as the best system of emission reduction.
7.The EPA’s guidelines must be translatable into “standards of performance” for individual sources. Ultimately, states must be able to turn the EPA’s guidelines into enforceable standards for individual sources of pollution in the relevant category. This does not mean, however, that the source must meet its standard solely through actions taken within the walls of its own facility.
8. The EPA’s guidelines must give states flexibility to account for the “remaining useful life” of their existing sources. The application of certain systems of emission reduction might make less economic sense for facilities on the verge of retirement. The EPA must allow states some way to account for this variation in useful life.
As further explained in our recent report, the EPA acknowledged and complied with each of these constraints when it issued the Clean Power Plan. For example, the EPA reviewed the full range of technological and operational reduction techniques available to regulated plants and engaged in extensive cost and energy impact analysis in identifying the “best system of emission reduction” that underlies its emission guidelines. The agency ultimately concluded that its system could be implemented at a reasonable cost — comparable, on a per megawatt-hour basis, to that of past power-plant regulations targeting other types of pollution — and without reducing overall electricity generation.
The Clean Power Plan’s consistency with prior regulations
The petitioners’ characterization of the Clean Power Plan as a “transformative” exercise of the EPA’s legal authority is further belied by the fact that the EPA has used the plan’s core elements in a number of prior Clean Air Act rules, issued under administrations of both parties.
Most notably, while petitioners claim that setting emission limits based on “generation shifting” from higher-polluting to low- or non-polluting sources of electricity is “unambiguously foreclosed by … nearly a half century of consistent administrative practice,” this simply isn’t true. Two prior power-sector regulations — the Clean Air Mercury Rule, issued by the George W. Bush administration, and the Cross-State Air Pollution Rule, issued by the Obama administration and upheld by the Supreme Court — took the availability of generating shifting into account when setting emission limits.
Many other rules have been promulgated with the expectation that they would cause generation shifting, even if their emission limits were not set based on that expectation. For example, the 2011 Mercury and Air Toxics Standards were set by reference to reductions that oil- and coal-fired generating units could achieve using on-site controls, but the EPA nevertheless projected that the rule would cause a 1.3 percent decrease in coal-fired generation and a 3.1 percent increase in gas-fired generation between 2009 and 2015.
Similarly, national ambient air quality standards are set solely by reference to pollutants’ health impacts, but the EPA has long recognized that they encourage states to increase use of cleaner electricity sources.
Other examples of regulatory precedents for the EPA’s approach in the Clean Power Plan abound, as discussed further in our recent article.
The bottom line is this: When crafting the Clean Power Plan, the EPA followed clear statutory protocols and relied on familiar reduction techniques to set achievable emission limits. The result is not, as the challengers claim, an “enormous and transformative” expansion of EPA power, but is instead an eminently reasonable approach to begin addressing one of the most significant public heath threats of our time.