Deregulation on Demand: Trump EPA Panders to Polluters in Dismantling Clean Power Plan

Introduction

Corporate capture of regulatory agencies like the Environmental Protection Agency (EPA) has progressed to a dizzying degree of brazenness during the Donald Trump administration, helping to power the president’s dangerous assault on public safeguards. This paper seeks to document this phenomenon empirically by examining the extent of the influence that corporate polluters enjoyed over the Trump EPA’s development of its Affordable Clean Energy (ACE) rule.

Specifically, our research compares the public comments that a sample of relevant national trade associations submitted regarding how greenhouse gas emissions from existing fossil-fueled power plants should be regulated to the provisions contained in the final ACE rule, seeking to answer a fundamental question: Just how much of industry’s wish list did the Trump administration deliver? Researchers identified a total of 23 unique substantive requests, or “asks,” in the trade associations’ public comments and concluded that the Trump EPA incorporated 79 percent of them into its final ACE rule. This high percentage is evidence of how unduly attentive the Trump EPA is to the very industries it is supposed to be regulating, while ignoring the legitimate interests of the public it is supposed to be protecting. When agencies become overly influenced by the industries they regulate, they risk undermining their credibility and the legitimacy of the policies they create. Structural reforms at the EPA, including measures aimed at limiting conflicts of interest among agency leadership, should be adopted to address the root causes of the problem of corporate capture.

The Trump Doctrine of Corporate Corruption

Under President Donald Trump, the threat to the integrity and legitimacy of our democratic institutions has never been greater. His frequent verbal assaults on the judiciary and his nose-thumbing at congressional oversight have been widely reported and condemned, but his administration’s efforts to undercut the regulatory system and the web of safeguards it supports and enforces may well have a greater impact on Americans’ daily lives. We focus in this paper on just one of the constellation of public interest agencies charged with translating protective statutes into concrete and enforceable standards – the Environmental Protection Agency (EPA), and on just one regulatory initiative – the Trump EPA’s repeal of the Obama administration’s Clean Power Plan and promulgation of its own, far less protective Affordable Clean Energy (ACE) rule. In a subsequent report, we will examine industry influence over a broader range of Trump anti-safeguard initiatives, including measures that would undermine critical protections designed to keep our air safe to breathe, our drinking water free of contaminants, and our communities free of toxic chemicals.

While the Trump administration did not invent the problem of capture by regulated industries, the influence that corporate special interests have come to enjoy over federal agencies during Trump’s tenure is unprecedented in U.S. history. An overwhelming number of lobbyists and executives now hold leadership positions in the very agencies charged with supervising their former industries, supposedly on behalf of the public interest.[1] One of Trump’s first official acts was to issue a pair of executive orders that effectively made it his administration’s official regulatory policy for the protector agencies to ask “how high?” when the industries they oversee told them to jump. One order required agencies to devote their resources to carrying out an aggressive assault on existing safeguards, regardless of the harms to public health, safety, and the environment that would result, while the other put corporate interests at the helm of this assault by explicitly inviting them to send Trump’s agencies “hit lists” of existing safeguards they wanted to see repealed or weakened.[2]

Unsurprisingly, the Trump EPA has been particularly aggressive in rolling back safeguards opposed by corporate polluters, including rules to limit greenhouse gas emissions from power plants and automobiles, protect fragile wetlands and upland water sources, and ensure safe storage of toxic coal ash waste.[3] The Trump rollbacks would add to the already healthy bottom lines of these large corporations, by allowing them to avoid the cost of cleaning up their own mess. Instead, they would transfer those costs to working families – costs that would ultimately be measured in preventable deaths, increased cancer rates, lost school days, and degradation of our cherished environmental heritage. Such costs, of course, would be disproportionately borne by those who can least afford them, including the poor and people of color. While it would be impossible to capture the full scope of these harms with numbers, one study from a pair of Harvard researchers was able to generate a “conservative estimate” of 80,000 premature deaths per decade and respiratory problems for more than 1 million people.[4]

A Climate Policy Only Fossil Fuel Interests Could Love

There have been previous examinations of the extent of corporate regulatory capture that has taken place during the Trump administration. For example, a 2019 study from Public Citizen found that the Trump administration had acted on 85 percent of the National Association of Manufacturers’ (NAM) requests to initiate discrete deregulatory actions over the course of its first two years in office.[5] Results from these studies show the extent to which corporate interests are driving the agenda of the Trump assault on our safeguards.

The purpose of this study is to dig a little deeper into the phenomenon of industry capture in the Trump administration and examine the extent to which corporate interests influenced the actual substance of these deregulatory efforts, in this case the Clean Power Plan rollback. In other words, whereas past studies, such as the Public Citizen report, have looked at the degree to which industry is dictating the agenda for the Trump administration’s rollbacks, this study examines the more complicated question of whether and to what extent these corporate interests are influencing the content of the provisions contained in the administration’s weaker replacement rule for the Clean Power Plan.

The Trump Attack on the Obama Clean Power Plan

The EPA’s 2019 Affordable Clean Energy (ACE) rule addressed, albeit superficially, greenhouse gas emissions from existing fossil-fueled power plants using the authority granted to the EPA by Section 111(d) of the Clean Air Act. Through this rulemaking, the Trump administration repealed the Obama administration’s 2015 Clean Power Plan and replaced it with a significantly weaker emissions reduction program.

The difference between the two rules primarily turned on each administration’s divergent interpretation of what constituted a “best system of emissions reduction” (BSER), as that term is used under Section 111(d). Interpreting BSER broadly, the Obama administration program would have required states to adopt their own implementation plans aimed at meeting specified emissions reductions goals that were tailored to their unique circumstances. The final Clean Power Plan laid out three “building blocks” that states could employ in designing their implementation plans: (1) reducing the carbon intensity of individual power plants’ generation through heat rate improvements; (2) reducing emissions from the most carbon-intensive power plants by substituting generation with that from less carbon-intensive power plants; and (3) reducing emissions by substituting carbon-intensive generation with low-carbon or zero-carbon generation. The practical effect of this design is that it would have enabled states considerable flexibility to achieve meaningful reductions in greenhouse gas emissions from the power sector located within their borders at a reasonable cost.

In contrast, the Trump administration’s ACE rule relies on an interpretation of BSER that is so narrow that it effectively deprives the term of practical meaning. The ACE rule only recognizes modest source-specific heat rate improvements as permissible. And because the rule grants states considerable flexibility in implementing this standard, it could conceivably – and paradoxically – lead to actual increases in greenhouse gas emissions from fossil-fueled power plants as compared to no rule at all.[6]

When first proposed in 2014, the Obama EPA’s Clean Power Plan was met with fierce opposition from industry. A wide variety of business groups – especially those industries related to fossil fuel development and use – submitted comments on the 2014 proposal that criticized its legal basis and suggested alternative designs. The Obama EPA considered and rejected many of these criticisms in working toward a final rule. An unprecedented stay from the U.S. Supreme Court in 2016 prevented the rule from taking effect while legal challenges against it worked their way through the federal courts. As a result, a legal challenge to the still-unimplemented Clean Power Plan remained pending before the U.S. Court of Appeals for the D.C. Circuit when the Trump administration took office in early 2017. President Trump, who had made opposition to environmental and other regulations a major theme of his campaign, wasted little time securing from the D.C. Circuit an abeyance in the litigation while his EPA worked on a replacement that would become the ACE rule.

The Trump EPA formally began work on the ACE rule with a 2017 advance notice of proposed rulemaking (ANPRM), which broadly sought public feedback on whether and how it should regulate greenhouse gas emissions from existing fossil-fueled power plants. Again, a wide variety of business groups responded to this request, offering their ideas for what a weaker replacement rule should look like (as opposed to an outright repeal).

The Affordable Clean Energy Rule: Just What Corporate Polluters Ordered?

The two public comment periods – for the 2014 Obama proposal and the 2017 Trump ANPRM, respectively – provide a unique opportunity to empirically test the extent of corporate capture that has prevailed during the Trump administration. In response to both comment opportunities, industry groups offered detailed feedback on what the EPA’s regulation of greenhouse gas emissions from fossil-fueled power plants should look like. Our researchers, a group of student attorneys from the Environmental Law Clinic at the University of Maryland Francis King Carey School of Law, drew on a representative sample of these industry comments in order to document the frequency with which the discrete requests, or “asks,” they contained were eventually reflected in the final ACE rule. A higher percentage of such asks being adopted is suggestive of a Trump EPA that has been captured by corporate interests.

Rather than conduct a comprehensive review of all industry comments, which would have been an overwhelming task, we focused instead on the comments from seven leading national industry trade associations: American Coal Council (ACC); American Coalition for Clean Coal Electricity (ACCCE); American Petroleum Institute (API); National Association of Manufacturers (NAM); National Mining Association (NMA); U.S. Chamber of Commerce; and Utility Air Regulatory Group (UARG). We focused on national trade associations to ensure our analysis focused on more generalized feedback on the rule, rather than on the more parochial concerns that the associations’ individual members might raise in their own comments. In addition, this choice also reflects the reality that national trade associations have increasingly overtaken individual companies as the major players from the business community in the rulemaking process. We chose these particular seven trade associations because they had been among the most publicly active in their advocacy against the Clean Power Plan and in favor of the ACE rule, through such means as op-eds and congressional testimony.

We carefully reviewed each of the trade association’s comments on the 2014 Obama proposal and the 2017 Trump ANPRM, where available. (Not all seven of the trade associations covered in this study participated in both public comment opportunities. For example, the ACC submitted comments on the 2014 Obama proposal, but did not submit comments on the 2017 Trump ANPRM.) As part of this review, we identified all of the substantive requests, or “asks,” that were made, which we distinguished from more general technical comments. We then reviewed the final ACE rule to determine whether each particular ask was formally adopted, partially adopted, rejected, or completely unaddressed by the Trump EPA. Based on this analysis, we were able to determine the total percentage of industry asks that were fully adopted in the final ACE rule, providing us with a yardstick for measuring the extent of industry influence over the Trump’s regulatory decision-making.

To ensure the robustness of our results, we took a conservative approach to our analysis. First, we did not count toward the final percentage any asks that were only partially adopted in the final rule. Second, to avoid misleading duplication, we only counted an ask that was adopted once, even if the particular ask had been made more than once – either by the same trade association (i.e., in their separate comments on the 2014 Obama proposal and the 2017 Trump ANPRM) or by more than one trade association.

Based on this analysis, we found that the seven trade associations made a total of 23 unique substantive asks. The final ACE rule adopted 79 percent of these asks.

To be sure, there is nothing wrong in the abstract with the EPA and other agencies basing their decision-making on the public feedback they receive. After all, the purpose of the comment process is to provide interested stakeholders with a meaningful opportunity to shape agency decision-making. It is this avenue of meaningful public participation in policymaking that helps to imbue the process and its results with a critical element of democratic accountability and legitimacy.

The problem is one of degree, however. If an agency is only attentive to one set of stakeholders – in this case corporate polluters – while systematically disregarding the concerns of the broader public interest, then this poses a threat to the accountability and legitimacy of the regulatory system, as well. For example, in their comments on the proposed ACE rule, various environmental groups urged the Trump EPA to adopt a broader definition of BSER, noting that according to the agency’s own analysis, the narrow definition employed in the ACE rule would achieve little practical reduction in existing power plants’ greenhouse gas emissions. They contended that this narrow construction of BSER was inconsistent with the Clean Air Act, which among other things requires the EPA to consider such factors as the quantity of emissions reductions and the severity of the pollution problem at issue when applying the BSER standard.[7] This was one of the many solid critiques of the ACE rule that the Trump EPA disregarded in working toward a final rule, and a reviewing court could very well use them as the basis for striking the rule down.

No law – least of all the Clean Air Act – charges the government with doing the bidding of politically powerful interests. Instead, the EPA, like all agencies, must be accountable to and fairly balance the interests of all affected stakeholders according to the dictates of the laws they implement. If the EPA creates the appearance, if not the reality, that it will only seriously consider the concerns of the corporate polluters it is charged with regulating, and not those of the broader public, this can prove just as corrosive to its credibility and the legitimacy of the policies its adopts.

In the Trump EPA, Corporate Polluters Have Found a Receptive Audience

The fact that the Trump EPA was so attentive to the concerns of corporate polluters in developing its final ACE rule should not be surprising. Even within the Trump administration, where conflicts and corruption are in evidence seemingly everywhere, the EPA has always distinguished itself as one of the most thoroughly captured by the very industries that Congress has charged it with overseeing. According to White House Office of Information and Regulatory Affairs (OIRA) records, the EPA has been one of the most aggressive agencies in advancing the administration’s assault on public safeguards, accounting for 44 of the administration’s estimated 393 deregulatory actions (11 percent) since 2017.[8] Of course, such “savings” are actually costs transferred, often in the form of sickness and death, to individuals and families, so that corporate polluters can make more money.

Other notable EPA officials with close ties to the fossil fuel industry include former Assistant Administrator for the Air and Radiation Office William Wehrum (a former lobbyist for UARG)[11], former Chief of Staff Ryan Jackson (who left the agency to take over as Senior Vice President of Government and Political Affairs at NMA)[12], and former air policy advisor and current Chief of Staff Mandy Gunasekara (who worked for a climate change-denying think tank that received significant funding from fossil fuel interests)[13].

Rooting Out Corporate Capture to Prevent Future Trump EPAs

Now that it has been finalized, the ACE rule faces an array of legal challenges from states and environmental groups in federal courts. Its odds of survival there appear dim, given the rule’s myriad legal and policy shortcomings. One of the ACE rule’s biggest weaknesses, as this paper indicates, is that the Trump EPA was overly attentive to the concerns of fossil fuel interests in designing the rule’s provisions, making it ripe for rejection as “arbitrary and capricious” under the Administrative Procedure Act.

Even if the ACE rule is successfully halted in the courts, its development has exposed the deeper problems of corporate capture that exist at the Trump EPA. While a future, more enlightened administration may sweep out some of the more superficial aspects of this problem, structural reforms will be needed to eliminate their root causes. An important place to start would be to adopt strong conflict-of-interest safeguards to prevent future administrations from installing individuals with close financial ties to polluting industries into influential leadership positions.

Endnotes

[1] David Mora, We Found a ‘Staggering’ 281 Lobbyists Who’ve Worked in the Trump Administration, ProPublica, Oct. 15, 2019 (last updated), https://www.propublica.org/article/we-found-a-staggering-281-lobbyists-whove-worked-in-the-trump-administration (last visited Mar. 27, 2020).

[2] See Exec. Order No. 13771, 82 Fed. Reg. 9339 (Feb. 3, 2017); Exec. Order 13777, 82 Fed. Reg. 12285 (Mar. 1, 2017).

[3] Nadja Popovich, Livia Albeck-Ripka, & Kendra Pierre-Louis, 95 Environmental Rules Being Rolled Back Under Trump, N.Y. Times, Dec. 21, 2019 (last updated), https://www.nytimes.com/interactive/2019/climate/trump-environment-rollbacks.html (last visited Mar. 27, 2020).

[4] David Cutler & Francesca Dominici, A Breath of Bad Air: Cost of the Trump Environmental Agenda May Lead to 80 000 Extra Deaths per Decade, The JAMA Forum, June 12, 2018, https://jamanetwork.com/journals/jama/fullarticle/2684596?appid=scweb&appid=scweb&alert=article (last visited Mar. 27, 2020)

[5] Amit Narang & Matt Kent, Your Wish is My Command: Corporate Capture of the Regulatory Process Evident in Trump’s First Two Years (Public Citizen, May 9, 2019), available at https://www.citizen.org/wp-content/uploads/Wishlist_report.pdf.

[6] Tom Yulsman, Study Shows that Trump’s New ‘Affordable Clean Energy’ Rule Will Lead to More CO2 Emissions, Not Fewer, Discover, June 19, 2019, https://www.discovermagazine.com/environment/study-shows-that-trumps-new-affordable-clean-energy-rule-will-lead-to-more (last visited Mar. 27, 2020).

[7] See, e.g., Nat. Res. Defense Council, NRDC Comments on EPA’s Proposed ‘ACE’ Rule to Replace the CPP, Oct. 31, 2018, https://www.nrdc.org/resources/nrdc-comments-epas-proposed-ace-rule-replace-cpp (last visited Mar. 27, 2020) [follow hyperlink entitled “Joint Comments on Legal Issues (PDF)”].

[8] See White House Off. Info. & Reg. Affairs, Off. Mgmt & Budget, Exec. Off. President, Regulatory Reform Results for Fiscal Year 2019, https://www.reginfo.gov/public/do/eAgendaEO13771 (last visited Mar. 27, 2020).

https://www.reginfo.gov/public/pdf/eo13771/EO_13771_Final_Accounting_for_Fiscal_Year_2019.pdf

[9] Christian Detisch & Alison Grass, Scott Pruitt's Troublesome Ties to the Oil and Gas Industry (Food & Water Watch, Jan. 18, 2017), https://www.foodandwaterwatch.org/news/scott-pruitts-troublesome-ties-oil-and-gas-industry (last visited Mar. 27, 2020).

[10] Rebecca Leber, The Next Likely EPA Chief Has Almost Completed His Former Coal Client’s Wish List, Mother Jones, Jan. 16, 2019, https://www.motherjones.com/politics/2019/01/andrew-wheeler-bob-murray-confirmation-hearing/ (last visited Mar. 27, 2020).

[11] Lisa Friedman, Bill Wehrum, an Architect of E.P.A. Rollbacks, Faces New Ethics Inquiry, N.Y. Times, July 22, 2019, https://www.nytimes.com/2019/07/22/climate/william-wehrum-epa-inquiry.html (last visited Mar. 27, 2020).

[12] Ari Natter & Jennifer A. Dlouhy, U.S. EPA Chief of Staff Is Headed to Top Coal Mining Group, Bloomberg, Jan. 30, 2020, https://www.bloomberg.com/news/articles/2020-01-31/u-s-epa-chief-of-staff-is-headed-to-national-mining-association (last visited Mar. 27, 2020).

[13] Corbin Hiar, Incoming EPA Chief of Staff Draws Fire, Greenwire, Mar. 11, 2020, https://www.eenews.net/stories/1062577165 (last visited Mar. 27, 2020).

Founded in 2002, the nonprofit Center for Progressive Reform connects a nationwide network of scholars with policymakers and allied public interest advocates. CPR pursues a vision of legal and regulatory policies that put health, safety, and environmental protection before private interests and corporate profit. With rigorous analysis, strategic engagement in public interest campaigns, and a commitment to social welfare, CPR supports thoughtful government action, ready public access to the courts, enhanced public participation, and freer access to information.

CPR is grateful to the Public Welfare Foundation, the Bauman Foundation, and the Deer Creek Foundation for their generous support of CPR’s work

James Goodwin is a senior Policy Analyst at the Center for Progressive Reform.

Special thanks go to Kyla Kaplan, Michael Sammartino, and Lauren Stettz from the Environmental Law Clinic at the University of Maryland Francis King Carey School of Law for their indispensable assistance in conducting the research and analysis that informed this report.

Direct media inquiries by email to Brian Gumm at bgumm@progressivereform.org or Matthew Freeman at mfreeman@progressivereform.org, or by phone at 202.747.0698.