If the revision of CAFE standards serves as an opportunity for the Trump regime to preempt state authorities, the Clean Power Plan (CPP) represents an opportunity to render unto the states what the administration would like them to be responsible for—or perhaps what they don’t want the federal government to bear the responsibility of.
The CPP was the intended path by which the Obama administration was to achieve the promised Nationally Determined Contributions (NDC) to global decarbonization as part of the Paris Accord. Although finalized late in President Obama’s second-term, the legal groundwork was laid during the G.W. Bush administration.
W’s refusal to regulate greenhouse gas emissions (GHG) from car tailpipes led to the decision in Massachusetts v EPA. As discussed throughout, the case established EPA’s authority to regulate greenhouse gases (GHGs) it determined were contributing factors to global warming. The 5 to 4 decision further established such regulation as obligatory, if the Agency also determined that global warming/ climate change was indeed harmful to human life and the welfare of the planet.
Justice Stevens writing for the majority included such phrases in the opinion as:
The harms associated with climate change are serious and well recognized.
EPA overstates its case in arguing that its decision not to regulate contributes so insignificantly to petitioners’ injuries that it cannot be ha[u]led into federal court, and that there is no realistic possibility that the relief sought would mitigate global climate change and remedy petitioners’ injuries, especially since predicted increases in emissions from China, India, and other developing nations will likely offset any marginal domestic decrease EPA regulation could bring about.
While regulating motor-vehicle emissions may not by itself reverse global warming, it does not follow that the Court lacks jurisdiction to decide whether EPA has a duty to take steps to slow or reduce it. (emphasis mine)
Because greenhouse gases fit well within the Act’s capacious definition of “air pollutant,”EPA has statutory authority to regulate emission of such gases from new motor vehicles. That definition—which includes “any air pollution agent …, including any physical, chemical,… substance … emitted into … the ambient air … ,” §7602(g) (emphasis added)—embraces all airborne compounds of whatever stripe. Moreover, carbon dioxide and other greenhouse gases are undoubtedly “physical [and] chemical … substance[s].
EPA’s reliance on post enactment congressional actions and deliberations it views as tantamount to a command to refrain from regulating greenhouse gas emissions is unavailing. (emphasis mine)
The case led directly to EPA’s subsequent endangerment finding. Finalized on Pearl Harbor Day 2009, it gave President Obama the needed legal basis to order EPA to regulate power plant emissions—principally CO2–pursuant to the Clean Air Act. The regulation is now generally referred to as the Clean Power Plan. The Plan was a cornerstone of the larger Obama Climate Action Plan that endeavored to combat global warming on multiple fronts, e.g. stringent CAFE standards, promoting American leadership in clean energy, boosting the resilience of buildings and infrastructure to natural disasters, etc.
The CPP, although finalized, has never been in force because of multiple challenges filed by 27 states, industry, mining and manufacturing organizations and entities, e.g. the National Association of Manufacturers and Murray Energy, and 200 members of Congress. The challenges prompted a stay of the regulations going into force by SCOTUS.
The very brief order of Chief Justice Roberts read in part:
The application for a stay submitted to The Chief Justice and by him referred to the Court is granted. The Environmental Protection Agency’s “Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units,” 80 Fed. Reg. 64,662 (October 23, 2015), is stayed pending disposition of the applicants’ petitions for review in the United States Court of Appeals for the District of Columbia Circuit….
The case was then remanded back to the U.S. Court of Appeals for the District of Columbia Circuit. In September 2016, oral arguments before an en banc panel of judges were heard, no opinion had been rendered prior to Trump’s occupation of the Oval Office. On March 28, 2017 Trump ordered EPA to review the Plan, with the direction to propose revisions, including rescission, as it saw fit.
EPA has recently (June 8, 2017) sent the Office of Management and Budget (OMB) a draft of its intention to rescind the CPP. After OMB signs-off on the proposed action, it will be published as a draft in the Federal Register. The Agency will ask for and consider public comments. Although there is little doubt EPA is intending to rescind the Plan in whole, legal challenges must wait until the rescission becomes final.
There is no question environmental organizations, states and other pro-environment stakeholders will challenge the Agency’s revocation in federal court. Whether a rescission or even a substantial revision of the Plan will be based upon the laws of science or society will determine the basis for the challenges.
Counsel for a number of environmental groups was hesitant to predict EPA’s reason(s) for the rescission:
We’ll wait and see what actually emerges…I’m sure that the many organizations and states that supported the Clean Power Plan and that support climate action would challenge any rescission on whatever ground.
There are two distinct avenues the Agency could cite as its reason for rescission: legal and scientific. Of the two, legal is the more likely because it may circumvent mention of the endangerment finding.
Attacking the finding would result in a trial of the science of climate change in a venue, i.e. the federal court system, where the preponderance of scientific evidence–supporting both the occurrence and the harm of climate change–has been accepted as requiring federal regulation. Trumptefarians prefer the court of their supporter’s opinion.
Pruitt’s recent championing of a red-team/blue-team debate about the science of global warming is the type of extra-judicial forum in which the administration would prefer to plead its case. The choice of teams, topics and decision criteria would be basically theirs to decide—offering a significant opportunity to accuse the scientific establishment of financial self-interest and unethical practices.
Federal justices—even the conservative ones—are bound by judicial precedence. They are less likely to be influenced by emotion—according greater respect to the considerable body of mainstream science and peer review that stands behind the conclusion the climate is changing, at the hands of humans, for the worse.
The legal argument most likely to be made by the administration is essentially the same Administrator Pruitt, the 27 plaintiff states and other challengers used against the Obama administration. Specifically, EPA overstepped the authority granted it by the Clean Air Act and accorded otherwise to the states.
There are several significant legal issues attendant to the administration’s review of the CPP. The first and most obvious is about Pruitt’s own ability to be an impartial decisionmaker. As the Attorney General of Oklahoma, he challenged EPA over both its authority and its science on 14 different occasions.
Many of the suits he led or participated in challenged EPA’s authority to regulate GHG emissions and called into question the legitimacy of the findings of the mainstream scientific community. His views are well known both from his past actions and as the Administrator of EPA.
It would be improper for him and, by inference, the administration to enter into the review with a pre-determined judgement as to its outcome. One would think Pruitt and others in the Trump administration would be sensitive about real and perceived conflicts and preconceptions, having accused President Obama of pre-determined rushes to judgement on the Midterm Evaluation of the 2022-2025 CAFE standard and in crafting regulations in support of WOTUS, methane and other environmental matters.
Beyond past court challenges is the phrasing of the letter he sent to all 50-state governors explaining that SCOTUS had granted the administration’s request to suspend decisions in pending CPP cases until after the administration’s review and decision. The SCOTUS decision was in anticipation of Trump’s March 28th executive order.
The letter was written and sent after the order, however. Only three paragraphs long, the last of which read:
The days of coercive federalism are over. Accordingly, I look forward to working with you, your state experts and local communities as we develop a path forward to improve our environment and bolster the economy in a manner that is respectful of and consistent with the rule of law. (emphasis mine)
The language and tone of the missive is sure to be raised by plaintiffs’ attorneys in challenging the legitimacy of the final rule revision or rescission. The letter is not the only possible evidence of pre-judicial judgement(s).
Notices of EPA’s review of the CPP and related provisions, including new source performance standards, were properly placed into the Federal Register on April 4, 2017. A practice both required and routine.
The phrasing, however, is once again subject to legitimate questioning, less for the literal meaning and more for the tone and its selection of backstory events cited as motivation of Trump’s ordered review.
For example, the notice stated: In conducting this review, EPA will follow each of the principles and policies set forth in the Executive Order.
The first principle listed:
- Whether this Rule [CPP] and alternative approaches are appropriately grounded in EPA’s statutory authority and consistent with the rule of law.
The statement isn’t a principle; rather, it is a question. A question the federal courts—including SCOTUS in the Massachusetts case and the subsequent denial of the challenge to the endangerment finding—had answered in the affirmative.
A subsequent offered principle stated:
- …whether this Rule [CPP] or alternative approaches appropriately maintain the diversity of reliable energy resources and encourage the production of domestic energy sources to achieve energy independence and security.
Like number 1 above, the statement is a question; a question implying the conclusion that a balance of resources is equal or superior to environmental safety and human health. The resources implied by the diversity would of course include coal—both logically and as evidenced by numerous statements of the President and Pruitt’s own speeches and the venues in which they were given.
The policy and programmatic priorities of the President and his surrogates have been considered in other challenges to Trump’s executive orders, i.e. the travel ban, and whether it unconstitutionally targeted a specific religion based not upon the words of the order but the words and actions of the President and his surrogates.
A third principle stated:
- EPA will assess this Rule [CPP] and alternative approaches to determine whether they will provide benefits that substantially exceed their costs.
This, rather than a principle, is a statement of fact and ordered practice suggesting a pre-judged outcome. What the Agency fails to own up to is the fact that in the same Order, Trump disband[ed] the Inter-agency Working Group on Social Cost of Greenhouse Gases,” and withdrew the documents in which that group set forth a “social cost of carbon” (SCC) for monetizing changes in greenhouse gas emissions.
The administration, even before the order, was on record opposing the consideration and monetization of environmental—including human health—benefits of reducing carbon and other GHG emissions. The administration has made it a habit of not subtracting benefits from costs in policies it opposes. Neither has it made it a habit to account for the cost of things it supports, e.g. tax cuts.
Alternative accounting principles may work for the administration; they do not, however, work for institutional decisionmakers or the courts. This is not to say that formal cost-benefit analysis is required. It is to say that both costs and benefits need to be considered in some rational manner.
The case of Michigan v. EPA is cited both by opponents and proponents of the necessity of making costs and/or benefits a part of regulatory decisionmaking. The Supreme Court in the Michigan case remanded EPA’s Mercury and Air Toxics Standards rule to the D.C. Circuit because EPA failed to consider cost as a factor when promulgating the rule.
It should be stated clearly that this is an unsettled area of the law—particularly as it applies to the EPA and the Clean Air Act. It should be noted, however, that in censuring the Agency for its failure to consider the cost of compliance, SCOTUS did not indicate benefits were to be ignored.
There are multiple approaches to determine both costs and benefits. Some are direct, e.g. the price of the environmental control system, and some are ancillary, e.g. the benefit of stimulating technological innovation.
Whether employing cost-effectiveness analysis comparing a single regulatory goal (like saving a human life) and to the cost of reaching that goal under various regulatory alternatives, e.g. control technology versus a change in feedstock from coal to biomass, commonsense suggests the need to balance costs and benefits in some rational manner.
Instantiation of the Michigan case by either those who would ignore the benefits or dismiss the costs as pertinent to public policies is a mistake. Even Justice Scalia, writing for the majority in the Michigan case, foretold that the issue would need to be addressed in the future.
Environmental regulation is not simply about the natural environment and the human condition. Trump is right when he says it impacts businesses and investors.
There are two old—some would say hackneyed—sayings that remain true today and shouldn’t be discounted.
- Politics makes strange bedfellows.
- Markets hate uncertainty.
Six labor organizations, including the AFL-CIO, the International Brotherhoods of Electrical Workers and of Boilermakers and the United Mine Workers of America met with OMB on June 26, 2017 carrying the message: The CPP Is A Job Killer.
The first slide of their presentation read:
- Utility, coal and railroad jobs took a big hit as a consequence of 40,000 MW of coal plant closures due to the EPA 2012 MATS rule (per DOE/EIA 2017 AEO).
- Additional job losses due to low natural gas prices, lack of demand growth, effective NSPS band on new coal plant construction.
- Rescinding the CPP is a critical step in reducing future job losses in the coal generation, transportation, and mining sectors.
Their recommendation was to rescind the CPP and replace it with a new inside the fence standard. Their business arguments parallel those of mining companies and many utilities. Their legal arguments could easily have been written by Attorney General Pruitt.
Earlier in June dozens of electric industry executives met with Pruitt, relaying the same basic message. As reported by Emily Holden of E & E News:
Dozens of power industry executives who flew to Washington for a…meeting with U.S. EPA Administrator…Pruitt had three minutes apiece to tell him whether they want to replace the Clean Power Plan.
Many said that if EPA follows through with rescinding the rule, the agency should write a less stringent carbon regulation that sets efficiency standards for coal plants.
Holden quoted a source with knowledge of the meeting who said Pruitt didn’t seem taken with the idea.
The difference between the message of both power industry executives and labor leaders and Pruitt’s reaction is telling. One may differ with these labor and industry leaders about the content of the revision but agree with the need and practicality of reducing carbon emissions.
These business and labor leaders understand the reality of the marketplace. They may have disagreed with the requirements of the Obama’s CPP, but they understand regulating harmful emissions is not simply demanded by some but required by all—including the federal judiciary.
Because this regulation is required, it is inevitable. These executives understand what Trump, Pruitt, Bannon and other members of the President’s Hot Air Gang do not.
To block passage of required and inevitable regulation–because of a doctrinaire refusal to face facts– leads to marketplace uncertainty. The type of uncertainty that causes investors and planners to stand in-place when action is needed.
Based on three factors, it may be fairly assumed EPA will continue to recommend a revocation-without-replacement CPP strategy:
- Pruitt’s witnessed response to the power industry executives’ recommendation of replacing Obama’s Plan with a less stringent Trump proposal;
- Pruitt’s vehement anti-regulatory record as an administrator, litigator and orator; and
- Trump’s anti-science record as president, his never retreat personality and proven willingness to be guided by Pruitt, Bannon, Miller and other known doctrinaire deniers.
The future of the CPP, therefore, will be much like that of CAFE and other of the administration’s efforts to rollback regulatory protections of the nation’s environment and people–multiple law suits.
It is still very early in the game to know with any certainty the outcome of the legal challenges to any proposed rescission or substantive revision of the CPP. It could be two or more years before a final SCOTUS decision is rendered. Nothing even begins to happen extra-agency before the new rule is finalized.
If Pruitt is half the legal strategist an ex-attorney general should be, EPA will stretch out the time it takes to issue the draft rule. Limbo for the deniers is nearly as good as their adding to the dead-reg heap.
While a decision is pending, the administration can go on purging websites of any references to climate change and agencies of program dollars and professional staff.
In the next installment of this series, I will discuss the recent ruling by the U.S. Court of Appeals for the District of Columbia Circuit in a case brought against EPA because of Administrator Pruitt ‘s 90-day stay of an Obama administration rule restricting methane emissions from new oil and gas wells.
The case provides some important insights into the future of the CPP and other rolled-back environmental regulations by the Trump administration.
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