by Jeffrey Bossert Clark, Scott Pruitt, F. William Brownell, Patrick McCormick III, and David Doniger
On May 20, 2014, the Federalist Society Environmental Law and Property Rights Practice Group convened at the National Press Club to discuss the form of the appropriate federalism model for regulating CO2 emissions under §111(d) of the Clean Air Act. The event featured Oklahoma Attorney General Scott Pruitt, who discussed his recent paper, "The Oklahoma Attorney General’s Plan: The Clean Air Act Section 111(d) Framework That Preserves States’ Rights." Here, we present a transcript of the event, which has been edited for style, clarity, and space considerations.
EPA’s Clean Power Plan is the Obama Administration’s most important effort to address the challenge of climate change. But it also raises significant legal issues of first impression ranging from unsettled statutory language to EPA’s splintered approach under different subsections of CAA §111 to judicial skepticism about EPA’s expansive CAA approach using a very narrow statutory provision. Although the courts likely will be inclined to grant EPA significant deference in pursuit of the important goal of curbing greenhouse gas emissions, concerns regarding the precedent-setting nature of EPA’s “beyond the fenceline” approach in this rule and future rulemakings for other sectors likely could tip the scales against upholding the rule.
When designating the “best system of emission reduction” in its Clean Power Plan, EPA considered several factors far beyond the fencelines and control of the regulated power plants. The clear statutory language, context, and regulatory background demonstrate that such a “beyond-the-source” approach is not allowed under §111. To find otherwise would suggest that EPA can require drivers to stay home or to use public transportation in order to reduce motor vehicles’ tailpipe emissions under the Clean Air Act. Although this conclusion may result in lower overall emission reductions, it is the outcome that the CAA requires.
A significant transition is underway within the electricity sector due to several market forces, retirement of certain plants, and regulatory pressures. There is notable overlap between available strategies for mitigating electricity sector risks and potential compliance strategies for states under the Clean Power Plan. This overlap presents regulators with an opportunity to pursue strategies that help manage the transition occurring in the electricity sector and achieve greenhouse gas reductions required under the Clean Power Plan, particularly in the areas of end-use energy efficiency and additional renewable power generation.
An accurate assessment of the stringency of state emission goals under EPA’s proposed Clean Power Plan compares state emission goals to adjusted state emission rates that incorporate known and reasonably foreseeable measures that will affect CO2 emissions from existing power plants. These adjusted emission rates may include projections of actual generation and emissions, which may differ from the building block assumptions used in EPA’s Clean Power Plan. In addition, projections in performance levels can reflect the emission and generation impacts that compliance measures will have on the electricity system. Consideration of these impacts can lead to a more accurate comparison of a state’s projected CO2 performance level to its final emission goal under the Clean Power Plan and result in state plans that are optimized for the degree of required emission reduction.
EPA’s Clean Power Plan is a rational, solid rulemaking designed to deliver flexible, efficient control of greenhouse gas emissions from existing fossil fuel-fired power plants. EPA has identified the best system of emission reduction that allows states and companies to adjust to locally relevant factors and generation-fleet characteristics, deploying the emission-reduction strategies most appropriate and effective. The Clean Air Act allows a system-based approach under §111 and, in fact, this approach is optimal in satisfying the statutory requirements by securing the cuts in carbon pollution that are needed and doing so through locally appropriate and innovative solutions.
Looking at the history of the Clean Air Act provides some guidance on what Congress intended when it required the “best system of emission reduction” under §111(d) and on EPA’s supervisory authority over state plans. But the drafting error, where the conflicting House and Senate amendments to §111(d) were not reconciled, remains largely uninformed by the legislation’s history and will have to be resolved by EPA and, ultimately, the courts.
On June 18, 2014, EPA officially proposed the Clean Power Plan—a rule that aims to reduce CO2 emissions from the nation’s existing fleet of fossil fuel-fired power plants. The proposal was developed pursuant to CAA §111(d), a section of the law for which there is limited regulatory precedent and no direct judicial decisions interpreting the statutory language. Any major new EPA rulemaking is bound to be controversial, and the proposed Clean Power Plan is no exception. The December issue contributes to the debate by expanding on the major issues explored during a July 14, 2014, workshop hosted by ELI and Duke University’s Nicholas Institute for Environmental Policy Solutions.
In the Courts
EPA §404 proceedings against Pebble Bay mine can move forward.