Foreseeable Yet Lamentable: Pruitt's Attack on Carbon Restrictions

Daniel Farber

Oct. 10, 2017

An earlier version of this post appeared on Legal Planet.

Few things were more foreseeable than the Trump administration's repeal of the Clean Power Plan (CPP). The administration was never going to leave in place a regulation that disfavored coal and promoted the use of renewable energy in electricity generation. The only real questions were when and how.

Today, the administration is taking the first step with the release of a proposed rule repealing the CPP. EPA is relying wholly on the argument that it can interpret the statute in question (section 111(d) of the Clean Air Act) to cover only regulations within the fenceline of a power plant, not regulations that require the owner to obtain power from cleaner sources elsewhere.

The action is notable in part for what the agency did not do, some good and some bad. Here are some things that were discussed at some point within the administration but not ultimately undertaken:

  • Repealing the finding that greenhouse gases endanger public health and welfare by causing climate change. The Bannonites really wanted the agency to officially repudiate climate science.  
  • Relying on a glitch in the statute's history to find that EPA has no power at all to regulate power plants. Industry pushed this argument hard during the litigation on the CPP.  
  • Arguing that the statute unambiguously limits EPA to "within the fenceline" regulations like improving the efficiency of coal-fired generators.  
  • Pledging to issue "within the fenceline" regulations or actually issuing them on the spot.

EPA apparently had a hard time getting the cost-benefit analysis for this proposal to come out the way Pruitt wanted. It considered only the social cost of climate impacts within the United States, unlike the previous analysis. It did several different analyses, incorporating different assumptions. Even so, a number of its estimates showed the rule having large net costs to society after 2020. To get the benefits of repeal to look good, it had to assume away most or all of the health benefits of reducing the use of coal. I'm sure it played other games with the numbers, which we'll be hearing more about from energy and environmental economists.

How will this repeal stand up in court? My guess is that the courts will probably agree that, in the abstract, it's not unreasonable to construe the statute to be limited to measures taken within the fenceline. But because the agency hasn't argued that the statute is legally unambiguous, it also had to present policy reasons in favor of its decisions. It is here that the proposed rule may be vulnerable because opponents will be quick to attack the evidence and analysis supporting its policy arguments.

The agency's refusal to commit to "inside the fenceline" actions may also leave it vulnerable, since it has a duty to do so. Its refusal to do so also undermines its claim to be acting in good faith to implement the statute. The D.C. Circuit may well push the agency to do more.

By the way, there seems to be a logical hole in EPA's argument, although for some reason, it hasn't gotten any attention. Reducing the use of a high-pollution power plant is something that can be done within the fenceline of that plant. Why couldn't that count as a feasible control measure if cleaner power (including power from the owner's other facilities) is available at a similar price? It doesn't seem crazy to argue on this basis that reducing use of an inherently high-pollution technology where feasible should count as a system of control.

I haven't discussed whether EPA's decision is good social policy primarily because it isn't. The costs of the CPP were likely to be minimal – in fact, there are reports that the U.S. will achieve its target under the rule even without it because of economic pressures that are pushing coal out of the market. Secretary of Energy Rick Perry has made a desperate proposal to force utility customers to subsidize coal plants, but for a variety of reasons, I don't think that proposal will come to pass. But it appears that we could actually get somewhat greater reductions for little cost if the CPP were to remain in effect. And readers of this blog don't need to be reminded of the serious risks of climate change and the need to cut carbon where possible.

About the only good thing I can say for Pruitt's action is that clearing away the CPP may conceivably make it easier for the next president to take even more sweeping action. It could also increase the pressure on Congress to act rather than leaving everything to the executive branch.

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