In the News

EPA has taken a number of steps to shield its newly proposed rule to limit greenhouse gas (GHG) emissions at existing power plants from inevitable legal challenges, an effort that one observer says appears aimed at preserving as many portions of the emerging policy as possible should federal courts vacate them.

“They might not say it explicitly, but the notion is they’re trying to ensure if you remove one Jenga piece from this stack, the whole thing doesn’t collapse,” says a source with the Institute for Policy Integrity (IPI) at New York University law school.

States have wide latitude to meet their carbon reduction targets under the proposed rule, with electrical-sector carbon offsets, interstate emissions trading, renewable energy and energy efficiency all viable options, said Jack Lienke, a legal fellow with the Institute for Policy Integrity. Some may find that running natural gas generators more — and coal plants less — represents their least-cost option to cutting carbon emissions, while others may choose to switch from fossil fuels to wind and solar power, he said.

Nor are proposed reductions uniform across the states. “The rules look at the existing power mix. They take it into account that some states are more fossil fuel-dependent than others right now,” Lienke said.

Another recent Supreme Court decision restoring the EPA’s Cross-State Air Pollution Rule, which had been vacated by a lower court, also indicates the agency is due deference when crafting cost-effective programs to deal with large air pollution issues, Michael Livermore, associate professor of law at the University of Virginia School of Law and senior advisor to the Institute for Policy Integrity, told Bloomberg BNA June 2 (EPA v. EME Homer City Generation LP, 2014 BL 118432, U.S., No. 12-1182, 4/29/14). He said addressing air pollution that blows across lines is analogous to climate change regulation.
“You had a complex environmental problem that has vexed the agency for some time,” he said. “The agency developed a sophisticated regulatory plan based on modeling and the best science and came up with cost-effective emissions reductions and large net benefits and does it in a flexible manner.”

NYU Professor: Industry “Just As Likely To Hire More Workers As They Are To Lay Workers Off.” Professor Michael Livermore, from New York University’s Institute for Policy Integrity, stated that “most serious economists will argue that our best estimate of the net effect is zero,” because any negative employment effects will be made up for by jobs added in the clean energy economy.

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.