In the News

The regulations will almost certainly face legal challenges, and may need to be modified. But in light of the Supreme Court rulings upholding the EPA’s authority to regulate greenhouse gas emissions, “it’s very unlikely the courts will completely strike down the EPA efforts here,” says Jason Schwartz, legal director for the Institute for Policy Integrity at the New York University School of Law.

Except for a handful of occasions—regulating acid gases from waste incinerators is one example—Section 111(d) of the Clean Air Act has seldom been applied to law. It’s also written very broadly, both a positive and negative point for EPA, said Jason Schwartz, legal director for the Institute for Policy Integrity at New York University, a think tank that supports the regulation of greenhouse gases. While it gives the agency more or less a clean slate for what it can propose, it could also potentially increase the number of legal challenges down the road.

U.S. EPA’s choice of which year to use as a benchmark for emissions reductions could hold an important clue to how far the administration will go to curb climate change, experts and state regulators say.

Less than two weeks before President Obama announces a highly anticipated U.S. EPA rule to limit greenhouse gases from existing power plants, rumors abound about how ambitious the rule will be and how easy it will be for utilities to comply while keeping electricity reasonably priced and reliable.

— Charging for carbon: Writing for WSJ.com, Richard L. Revesz, director of the Institute for Policy Integrity, writes that sensible carbon policy involves charging for emissions. “The (EPA) should provide each state with an ‘emissions budget’ and allow states to meet those budgets by establishing carbon markets.”

The best way to move forward on coal is to price carbon pollution appropriately, at a price that reflects its significant negative impacts on climate and human health. These impacts are not currently taken into account in the decisions of energy companies—or in their bottom lines.

An agency is typically lumped into one of two categories: executive (subject to presidential control) and independent (not subject to presidential control). Kirti Datla and Richard L. Revesz discuss how the “independent agency” label does little more than create a false dichotomy. There are not just two types of agencies. Different permutations of design choices result in many different kinds of agencies. And so, in reality, agencies fall along a continuum ranging from most insulated to least insulated from presidential control.

The Wall Street Journal editorial board is continuing to pretend that the EPA is acting against the law by regulating coal pollution, despite repeated Supreme Court rulings that conclude otherwise. On April 29, the Supreme Court ruled in a 6-2 decision to re-instate the EPA’s Cross-State Air Pollution Rule, which regulates air pollution that crosses state lines and “significantly” prevents neighboring states from achieving national air quality standards. The rule, which is part of the Clean Air Act by way of the “Good Neighbor Provision,” was delayed in 2011 for further review after being challenged by a major coal-fired operator — to the delight of the Wall Street Journal, which lauded the decision to delay for showing “how out of bounds the cross-state regulation is.” The board decided that the Supreme Court “should overturn [the Cross-State pollution rule] for violating the federalist intentions of Congress,” adding it would “to show this increasingly rogue agency that it can’t rewrite the law as it pleases.” Now that the rule has been reinstated (counter to the wishes of the Journal) in EPA v. EME Homer City Generation, the paper is scrambling to find wrongdoing. The board published an editorial titled “The EPA Unchained” recycling its own faulty arguments that concluded with the fear that “the Obama EPA will feel even less bound by legal restraints, if that’s possible.” Its claims, however, are extremely misguided. … The WSJ summarily dismisses the court’s defense of the EPA’s use of cost-benefit analysis when considering the best regulatory action, calling it “ironi©” because “the EPA typically dismisses cost-benefit analysis unless a statute explicitly calls for it.” However, according to an amicus brief from NYU’s Institute for Policy Integrity, the EPA has been using cost-benefit analyses to guide inter-state air pollution regulations for decades. The “Good Neighbor Provision,” for instance, does not explicitly call for cost-benefit analysis. The Court deferred to the EPA as the most appropriate body to determine whether or not to use cost-benefit analysis to regulate pollutants that are clearly covered by the Clean Air Act.

Opponents of the Environmental Protection Agency’s proposed carbon dioxide standards for newly built power plants are looking to federal statutes beyond just the Clean Air Act to base legal cases. Challenges are likely to focus on whether the agency violated the Energy Policy Act of 2005 when it proposed a standard for new coal-fired power plants that would necessitate the use of carbon capture systems. Industries that oppose the performance standards already have raised the objection, and a House committee launched an investigation into whether the proposed rule violates the law. “My guess is that the industry is going to throw every possible legal argument into the mix on this,” Michael Livermore, an associate professor of law at the University of Virginia School of Law and a senior advisor to the Institute for Policy Integrity, told Bloomberg BNA. “It’s kind of a no holds barred, every argument, don’t pull any punch kind of approach.”

EPA scored a victory when the Supreme Court reinstated its cross-state emissions rule for power plants, but changing market and compliance conditions may force the agency to rethink how the rule is implemented. … The EPA’s Clean Air Interstate Rule, a predecessor to the cross-state rule that the D.C. Circuit also struck down, has remained in effect. Now the EPA needs to address how it will transition between the two programs, state air pollution regulators and attorneys said. “Having this issue in legal limbo for so long, EPA should move as quickly as they can to implement,” Richard Revesz, director of the Institute for Policy Integrity, told Bloomberg BNA April 29