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EPA will soon propose performance standards under Section 111 of the Clean Air Act for greenhouse gas pollution from the two largest emitting sectors—fossil-fueled power plants and petroleum refineries. The form these standards will take remains unclear. Many from industry, environmental groups, and academia argue that to be effective and efficient, the standards should incorporate compliance flexibility. This broad term encompasses a range of design choices that provide spatial or temporal flexibility in achieving aggregate emissions outcomes.
There is widespread agreement in the academic community that § 111 authorizes the use of many types of flexible approaches. Given agency discretion to define uncertain statutory terms like “best system of emission reduction,” and given the potential of compliance flexibility mechanisms to reduce costs while preserving total emissions reduction goals, EPA and the states should be able to fit a variety of flexible approaches into the statutory criteria for performance standards.