Defusing Blunderbuss Constitutional Attacks on EPA's Proposed Regulation of Existing Power Plants to Abate Climate Change

As climate scientists have been telling us for years, and as all but the most obstinate climate deniers acknowledge, greenhouse gas (GHG) emissions from the combustion of fossil fuels are contributing to climatic changes.  These changes have taken the form of melting ice sheets, rising sea levels, changes in wind and ocean current patterns, and increases in the frequency of severe weather events, to name but a few effects.  Rising temperatures linked to GHG emissions also exacerbate public health problems associated with the release of more conventional air pollutants, because temperature increases facilitate the formation of tropospheric ozone, which can cause breathing difficulties and cardiovascular problems.  It is not a stretch to characterize climate change as the most challenging environmental problem of our time.

Since taking office in 2009, the Obama Administration has taken important steps to reduce GHG emissions, both in the U.S. and through negotiations with foreign countries such as China.  These steps have included using the authority that Congress vested in the federal Environmental Protection Agency (EPA) under the Clean Air Act (CAA).  Although Congress enacted the CAA decades before human contributions to climate change were broadly recognized, Congress consciously provided EPA with a flexible mandate to address the health and environmental risks linked to air pollution as the agency became aware of them.  In 2007, the Supreme Court concluded that GHGs qualify as “air pollutants” under the CAA, giving EPA the authority to regulate emissions of carbon dioxide and other GHGs from new motor vehicles. After President Obama took office, EPA issued a finding that EPA’s subsequent regulation of GHGs from cars and trucks triggered EPA’s authority under the CAA to regulate GHG emissions from factories and other stationary sources as well.  Once again, the Supreme Court last year ruled that EPA has the power to regulate GHG emissions from stationary sources, at least in some contexts.

Relying on that authority, EPA last year issued proposed regulations in an effort to reduce GHG emissions from the electric utility sector, a major source of the pollutants that contribute to climate change. The agency has promised to finalize those regulations some time next summer.  In the meantime, it has solicited public comment on its proposals and is busy analyzing the resulting input to decide what shape the final regulations should take.  As might be expected for an undertaking of such significance, the proposals have generated an enormous volume of comments, both favorable and unfavorable.           

Opponents of the proposal have raised a host of legal objections, ranging from those that appear to be spurious or unsupported by current legal authority to questions of first impression.  There is no doubt that whatever the outcome of the proposed rulemaking next summer, EPA will wind up having to defend its regulations in court.

Some of the professed illegalities of EPA’s proposed approach can be easily dismissed. In particular, constitutional objections to the proposal seem groundless.  At least one set of comments filed on behalf of the coal industry claims that the CAA provision on which EPA is relying to regulate existing utility sources (CAA § 111(d)) amounts to a violation of the constitutional separation of powers.  Way back in 1935, the Supreme Court declared a couple of pieces of legislation enacted during the New Deal unconstitutional because they violated the so-called non-delegation doctrine.  That doctrine prohibits Congress from delegating its core lawmaking authority to an administrative agency. The Court has since made it clear that Congress may vest in an agency the authority to adopt legally binding regulations, as long as the legislation includes an intelligible principle to guide the agency in the exercise of the delegated authority and to give courts the means of ensuring that the agency’s efforts are consistent with the policies reflected in the legislation.  Since the 1930s, the Supreme Court has rejected every single claim that federal legislation violated the non-delegation doctrine, even though in many of those cases the intelligible principle identified in the legislation was very broad and general (such as to legislate in the public interest and necessity).  In 2001, the Court firmly rejected a non-delegation challenge to a core provision of the CAA, the provision authorizing EPA to set national ambient air quality standards that are “requisite to protect the public health.”  The Court in Whitman v. American Trucking Associations concluded that that the delegation was well within the parameters of previous delegations that the Court had found valid.

Many legal observers regarded the Court’s 2001 decision as having sounded the death knell of the non-delegation doctrine as a tool for finding statutory delegations of rulemaking authority to administrative agencies to be unconstitutional.  Yet, some critics of EPA’s proposed power plant rule have raised a non-delegation challenge, notwithstanding that the provisions defining the standards of performance that EPA is authorized to issue for categories of GHG-emitting stationary sources are at least as specific as the ones that easily passed muster in the 2001 decision, which also involved the CAA.  It is difficult to conceive of a legitimate ground for distinguishing the 2001 precedent.

One basis for doing so, the critics have argued, is that, due to a drafting error by Congress, the final version of the 1990 amendments to the CAA include two apparently conflicting provisions concerning the relationship between two different CAA provisions (sections 111 and 112).  Under one reading of those provisions, EPA is authorized to regulate existing power plants that emit GHGs under a provision that originated in the Senate, but not under a provision that originated in the House.  The argument is that the two provisions cannot be reconciled, leaving EPA with no guidance on the circumstances in which it is allowed to regulate.  The argument has several flaws.  For one, the statute can be interpreted as subordinating the House to the Senate provision. 

Even if that is not the proper reading of the statute, however, one important court has already rejected a challenge that was essentially rooted in non-delegation concerns in an analogous situation – and again, the case arose under the CAA.  When Congress passed the 1977 CAA amendments, it made another drafting error by including two provisions that established the effective date of an important new CAA permit program at different times.  Litigants challenged EPA’s regulations implementing the new permit program in the D.C. Circuit Court of Appeals, the same court that is likely to hear challenges to EPA’s power plant rule.  The court concluded that the two provisions were completely irreconcilable; they could not both be given effect.  Rather than declare the amendments to be a standardless and unconstitutional delegation of regulatory authority, however, the court deferred to EPA’s effort to accommodate the clash in a manner most consistent with underlying statutory goals.  It declared that “in coping with legislative inadvertence and error, a reviewing court should eschew an overly technical view that would invalidate all facial instructions of the law that may be inconsistent in certain respects when there is an ascertainable, functionally viable, reasonable legislative purpose lying beneath.” It will be the court’s task, giving appropriate deference to the views of the expert agency that administers the CAA, to identify those purposes and interpret the statute in ways that best promote them.  What it should not do is throw up its hand in frustration and invalidate the statute on constitutional grounds.

The other set of constitutional objections to EPA’s proposal is as far-fetched as the non-delegation challenge.  Some of the rule’s critics have charged that EPA’s approach represents an unwarranted intrusion on state sovereignty in violation of the Tenth Amendment.  According to the Supreme Court, a federal statute or regulation improperly infringes on powers reserved to the states by the Tenth Amendment only if that federal action “commandeers” state governmental processes by coercing the states to implement federal programs.  Although litigants have with some regularity attacked federal environmental statutes and regulations as Tenth Amendment violations, those challenges almost never succeed.

The Supreme Court slapped aside just such a challenge in the landmark decision in Hodel v. Virginia Surface Mining & Reclamation Association, which involved a constitutional challenge to the Surface Mining Control and Reclamation Act.  The Act, like the Clean Air Act, the Clean Water Act, and other federal environmental legislation, was an effort to achieve environmental improvement through a program of “cooperative federalism.”  The Court, in finding no federalism-related problem, found it significant that the statute did not require the states to enforce any standards, expend state funds, or participate in the federal regulatory program in any other way.  If any state chose to sit on the sidelines, the federal government would take on the burden of administering the program in that state.  The Court found it critical that there “could be no suggestion that the Act commandeers the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program. . . . The most that can be said is that the Act establishes a program of cooperative federalism that allows the States, within limits established by minimum federal standards, to enact and administer their own regulatory programs, structured to meet their own regulatory needs.”  In case there was any doubt about the scope of the precedent the Court was setting in Hodel, it analogized the Surface Mining Act to other federal statutes that had survived Tenth Amendment attacks in the lower courts, including the CAA.

The Hodel Court’s characterization of the surface mining statute as an example of cooperative federalism fits the provisions under which EPA has issued its power plant proposal to a tee.  The proposal sets emission reduction targets for each state and describes various options states might adopt in adopting plans capable of hitting those targets.  No state has to employ the strategies suggested by EPA.  Indeed, a state can choose to forego participation entirely.  If it does, EPA has the power to adopt a federal GHG reduction plan for the state, and the agency has announced its intention to issue a proposed framework for a federal plan next summer.  This approach clearly amounts to permissible encouragement, not unacceptable commandeering.  Some critics of EPA’s proposal have argued that it improperly encroaches on state power because states have no authority to change EPA’s target for GHG emission reductions.  But if that were enough to violate the Tenth Amendment, every environmental cooperative federalism statute would be unconstitutional.  They all set federal goals and then give states the option of choosing the means to achieve them (or of not participating at all), but not the option of altering the goal.  Yet, federal courts, including the Supreme Court, have repeatedly held that such an approach passes muster under the Tenth Amendment. 

Other critics have urged states to refuse to participate even if the proposal does not violate fundamental federalism principles.  While the states are free to do just that, they should think twice before abdicating control of the regulatory program to EPA.  Historically, states have jealously guarded the policymaking discretion afforded them under cooperative federalism statutes.  Forty-six states, for example, have chosen to administer the Clean Water Act’s National Pollutant Discharge Elimination System.  Federal and state agencies may disagree on the best approaches to achieving federal regulatory goals, and they often do so because different strategies have different social and economic policy implications.  States should carefully consider whether they are sanguine in forfeiting control over the manner in which the new regulatory program affects state interests.  An obstinate decision to sit on the sidelines may amount to cutting off a state’s nose to spite its face.

In short, the constitutional challenges to EPA’s clean power plan proposal are likely to generate little judicial traction.  That leaves those opposed to EPA’s proposal dependent on arguments that the proposal exceeds EPA’s delegated statutory authority.  The proposal does raise important questions in this regard.  One of these is whether EPA’s proposal for new electric generating units would violate the CAA because EPA has chosen to rely on carbon capture and sequestration to reduce GHG emissions from new sources.  Some industry commenters have claimed that this technology is not yet available.  The issue is important because, under the statute, EPA can only regulate existing electric generating units if it has issued valid standards for new sources in the same category.  A second question, referred to above, is whether EPA’s regulation of mercury emissions from electric generating units under § 112 of the CAA precludes EPA from regulating GHG emissions from existing sources in the same industry under § 111(d).  A final, controversial issue is whether EPA has the authority to rely on techniques that extend “beyond the fence line” of an individual generating unit in its efforts to reduce GHG emissions.  EPA has proposed allowing states to meet their GHG emission reduction targets by altering the mix of electric generation to reduce coal-fired power and increase renewable or other clean forms of power generation.  It has also proposed allowing states to rely on implementation of demand reduction programs by affected utilities.

Critics of the proposal have argued in their comments that EPA has clearly exceeded its statutory authority on all of these questions and that courts are certain to strike down the final rule if it follows the approach reflected in the proposal.  I don’t agree.  Although the questions are certainly arguable, I find that the statutory text, applicable judicial precedents, and important administrative law principles provide a solid grounding for EPA’s approach.  Given the focus of my current analysis on the constitutional objections to the proposal, my reasoning on the statutory issues will have to await another day.