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The Supreme Court’s Stay of the Clean Power Plan: Economic Assessment and Implications for the Future

October 2016

Citation: 46 ELR 10859

Issue: 10

Author: Joshua Linn, Dallas Burtraw, and Kristen McCormack

The Clean Power Plan (CPP) is expected to play an important role in reducing U.S. greenhouse gas emissions. In February 2016, responding to appeals from some of the affected industries and states, the U.S. Supreme Court issued a stay suspending implementation of the CPP until after the judicial review process. Industry groups stated the CPP will pose large and “irreparable” costs to the coal sector during the period of judicial review. However, modeling suggests that because of prevailing market, technological, and policy trends, the CPP will result in near-zero costs beyond current trends until 2025, in part because of the plan’s built-in flexibility. These factors and lessons from option theory suggest the stay is economically unjustifiable based on claims of irreparable economic harm to the coal sector. If implementation of the rule proceeds, current trends imply the stay will have little effect on industry’s ability to follow the current compliance schedule.

Joshua Linn is a Senior Fellow, Dallas Burtraw is the Darius Gaskins Senior Fellow, and Kristen McCormack is a research assistant, all at Resources for the Future.

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