Carbon rule repeal kicks off epic battle over regulating emissions

The EPA has finally revealed its proposal for repealing a major climate regulation.

U.S. Environmental Protection Agency Administrator Scott Pruitt. (CREDIT: AP Photo/Gene J. Puskar)
U.S. Environmental Protection Agency Administrator Scott Pruitt. (CREDIT: AP Photo/Gene J. Puskar)

After months of speculation and days of teasing the announcement — the Environmental Protection Agency on Tuesday released its proposal to repeal the Clean Power Plan, a 2015 rule that would have regulated carbon emissions from the electricity sector.

“We are committed to righting the wrongs of the Obama administration by cleaning the regulatory slate.  Any replacement rule will be done carefully, properly, and with humility, by listening to all those affected by the rule,”  EPA Administrator Scott Pruitt said in a press statement. At least two state attorneys general said Tuesday they would sue to protect the rule.

Pruitt’s proposal is merely the first step in repealing the rule, which had previously been put on hold by the Supreme Court while opponents and supporters of the rule argued over its legality in the D.C. Circuit Court. The EPA will now have to go through the process of soliciting public comment on their repeal proposal and, in all likelihood, defend their position that the EPA originally overstepped its authority in issuing the Clean Power Plan before the courts.

“The Obama administration pushed the bounds of their authority so far with the CPP that the Supreme Court issued a historic stay of the rule, preventing its devastating effects to be imposed on the American people while the rule is being challenged in court,” said Pruitt, sued to block the Clean Power Plan in 2015 when he was Oklahoma Attorney General.

Part of defending their repeal proposal will be making the argument that under the Clean Air Act, the EPA can regulate emissions from power plants insofar as those regulations spur changes within the power plants themselves — the so-called “within the fenceline” approach. Part of the Clean Power Plan’s mechanism for reducing greenhouse gas emissions was to encourage states to shift away from high-emissions fuels — like coal — in exchange for lower-emissions fuels, like solar or wind. That sector-wide approach is known as “outside the fenceline.”

Some opponents of the rule argued this approach was a violation of the EPA’s authority, while supporters argued that the statute allows the agency to set standards for emission sources through “the best system of emission reduction,” even if that system operates outside of particular power plants. Opponents and supporters of the rule argued their cases earlier this year before the D.C. Circuit Court of Appeals. The court, however, never issued a decision in the case, instead deferring to the Trump administration’s decision to review the rule.

As environmental attorney and University of California, Berkeley professor Daniel Faber points out at environmental law blog Legal Planet, the EPA likely won’t argue that the Clean Air Act allows the agency to regulate only within the fenceline, just that the agency disagrees with the prior administration’s interpretation. That’s critical, because to defend the rule in court, the EPA will have to explain why its interpretation of the agency’s authority is superior to the prior administration’s — something that will require the EPA to submit evidence in favor of its interpretation versus the Obama administration’s.

In this argument, it’s possible the EPA could run into trouble. Already, environmental groups have criticized what they view as misleading analysis that accompanies the agency’s proposal to repeal the plan. In creating the Clean Power Plan, the Obama administration did a cost-benefit analysis that considered both the costs to the coal industry, and the quantifiable benefits for public health and the environment from reduced carbon emissions and other associated pollutants.

Under Pruitt, the EPA is arguing the costs outweigh the benefits, but, to do this, the agency has to ignore the health benefits associated with reducing air pollution. The agency also ignores any benefits to utilities from investing in energy efficiency and considers only on the climate benefits to the United States, rather than the global benefits of reducing carbon emissions. Still, a number of scenarios included in the EPA’s analysis found that repealing the rule would result in a net cost to society after 2020.

The EPA has not suggested how it might replace the Clean Power Plan, or even committed to issuing a replacement plan — although it is required to regulate carbon dioxide as a pollutant, since the EPA has not proposed repealing a 2009 endangerment finding, which found that carbon dioxide emissions pose a threat to human health. Failing to to take some kind of steps to regulate carbon emissions — or taking so long that the agency could reasonably be argued to be indefinitely delaying the rule through inaction — would almost certainly prompt challenges in court.

On Tuesday, the agency said that it would issue a notice of advanced rule making “that will be reflective of a thoughtful and responsible approach to regulatory action grounded within the authority provided by the statute.” It’s unclear when the EPA will solicit suggestions for what sort of regulation should replace the Clean Power Plan.

“Ignoring carbon pollution is not only disastrous policy, it’s against the law,” EarthJustice president Trip Van Noppen said in a press statement. “The Supreme Court has ruled three times that EPA must protect Americans from carbon pollution that is driving climate change, with devastating consequences. As the Trump administration tries to derail progress on climate change, we will hold them accountable in court.”

The goal of the Clean Power Plan was to reduce greenhouse gas emissions from the electricity sector by 32 percent below 2005 levels by 2030 — and despite the Trump administration’s push to repeal the regulation, it’s likely that those cuts in emissions will still take place, due in large part to the fact that cleaner sources of energy, like renewables and natural gas, are simply more cost-effective than coal. According to a report issued this week by the Rhodium Group, emissions from the power sector are projected to fall 27 to 35 percent below 2005 levels by 2030.

Still, repealing the regulation will mean that states that have not begun transitioning to a low-carbon energy mix — places like Kentucky, or West Virginia — will no longer have any incentive to change their policies. Without a nationwide framework to drag laggard states into a clean energy mix, it will be difficult for the United States to achieve the kinds of deep, economy-wide reductions necessary to make progress on slowing climate change. And, repealing the regulation will mean years of regulatory uncertainty, as the administration’s repeal and potential replacement plans are challenged in courts. Already, New York Attorney General Eric Schneiderman (D) and Massachusetts Attorney General Maura Healey (D) have pledged to fight the administration’s efforts to repeal the plan in court.

To give some regulatory clarity while the EPA considers what — if anything — might replace the Clean Power Plan, environmental groups are hoping that the D.C. Circuit Court will still issue a ruling, arguing that since the rule was put on hold pending litigation, an indefinite hold on litigation would be tantamount to an indefinite stay of the rule.

This is not just any situation of an agency reconsidering a rule — this is a situation where the rule has been frozen by a Supreme Court stay, and that places the issue of agency delay into much sharper relief,” Howard Fox, an attorney with Earthjustice, told ThinkProgress. “Here, the stay has prevented the rule from safeguarding people from pollution. Unfortunately, EPA’s delay is occurring on the public’s dime, not the polluters dime.”