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Simon Evans

Simon Evans

25.06.2014 | 12:35pm
Rest of world emissionsSupreme Court backs Obama’’s plan to sidestep Congress and regulate carbon emissions
REST OF WORLD EMISSIONS | June 25. 2014. 12:35
Supreme Court backs Obama’’s plan to sidestep Congress and regulate carbon emissions

The use of executive powers to regulate greenhouse gas emissions has been reaffirmed by the US Supreme Court in a ruling issued on Monday. We take a look at the history of US efforts to regulate emissions and what the latest ruling means for the future.

First, here’s a brief timeline of US efforts to tackle greenhouse gas emissions.

2003, 2005, 2008 and 2010

Between 2003 and 2010 the US Congress repeatedly tried and failed to pass cap-and-trade legislation that would have limited emissions across the US economy.

The number of climate laws reaching Congress peaked in 2009-10, as the chart below shows. The current Congress still has until mid-term elections in November to catch up.

EPA Supreme Court Bar Chart

Source: Center for Climate and Energy Solutions

The 112th US Congress during 2011-2012 was the first to make no attempt to pass cap-and-trade rules since the first effort, way back in 2003. Obama has effectively given up on getting Congress to act and is using the executive powers of the US Environmental Protection Agency instead.

2007

The EPA’s executive powers to regulate greenhouse gas emissions stem from a 2007 Supreme Court ruling. This said the Nixon-era Clean Air Act should be used to regulate “any pollutant” that “endangers public health or welfare”. This case is often referred to as Massachusetts vs EPA.

2009

In 2009 the EPA produced a 210-page report to support its “ endangerment finding” that greenhouse gas emissions are indeed a threat to public health. This triggered a requirement to issue greenhouse gas regulations under the Clean Air Act.

2010 and 2011

The EPA issued regulations covering tailpipe emissions from cars, vans and trucks in 2010 and 2011. In 2010 it also issued a final notice of its intention to regulate emissions from stationary sources such as factories and power stations. This is what Monday’s Supreme Court decision ruled on.

The EPA had decided stationary sources emitting more than 100,000 tonnes of carbon dioxide per year should be required to obtain a permit to operate. They should also be required to apply the best available control techniques (BACT) to limit emissions.

2012 and 2013

Subsequently the EPA proposed limits for greenhouse gas emissions from new power plants. The limits would effectively ban additional coal-fired capacity without carbon capture and storage facilities.

The rules have yet to enter force having been subject to extensive consultation and legal challenge. EPA issued revised rules in 2013. These are supposed to be finalised in January 2015.

2014

In May this year the EPA issued plans to limit emissions from existing power plants. The ‘Clean Power Plan’ rules are due to be finalised in June 2015. We’ve already taken a detailed look at the proposals.

A key point is that they would extend EPA jurisdiction beyond the fenceline of power plants, out into the wider economy. This is designed to give states maximum flexibility to comply through energy efficiency or renewables, for instance, but it is a legal weak link.

Legal challenges

The EPA’s endangerment finding was challenged, and in 2012 upheld. The Supreme Court has denied a review of this decision.This week’s Supreme Court ruling stems from a series of cases challenging EPA regulation. It ruled on six separate cases in a single decision.

It considered just two questions: does the Clean Air Act compel the EPA to require permits for stationary sources of greenhouse gases and should permitted sites be required to apply BACT to limit emissions.

The Clean Air Act rules on permitting apply to emissions of 250 tonnes or more. For greenhouse gases this would cover tens of thousands of sites, making the rules impossibly burdensome to enforce.

The EPA solution was to “tailor” the threshold to 100,000 tonnes of greenhouse gases. The Supreme Court struck this down. The EPA had no authority to rewrite the limits written into law by Congress, it said.

The legal debate centred on the meaning of “any pollutant”. Should this cover all pollutants or should EPA take a pragmatic, context-specific decision on which pollutants to include?

The court ruling favoured the latter. It is written in language highly critical of the EPA’s inclusive, “all pollutants” approach, which it said took “some cheek” given the EPA has shown pragmatism elsewhere. The ruling also contains clear warnings against attempts to expand the EPA’s regulatory reach.

But the court backed EPA’s right to regulate greenhouse gas emissions from sites already covered by the Clean Air Act because of emissions of other pollutants. That leaves the EPA able to target 83 per cent of stationary source greenhouse gas emissions, only slightly lower than the 86 per cent it wanted to target.

It’s also important to note that the EPA’s power plant rules are based on a different section of the Clean Air Act, so there is no direct legal impact on them from Monday’s ruling.

Solid foundations

The latest ruling affirms the legal basis of the EPA’s regulatory efforts, namely Massachusetts vs EPA. The court had the chance to revisit that decision but chose not to.

Two of the nine Supreme Court justices repeated their view that the 2007 ruling was wrong. But the other seven judges did not question its validity and showed no willingness to look at it again.

The Supreme Court is in general reluctant to challenge its own past decisions, according to Case Western Reserve University School of Law Professor Jonathan H. Adler.

That means Massachusetts vs EPA is “here to stay”, Adler writes. Even lawyers for the US power sector conceded its validity during earlier hearings. EPA regulation of emission is here to stay too, says Adler.

So President Obama’s climate policy has solid legal foundations.

A Congressional rewrite of the Clean Air Act could shake those foundations. But there do not appear to be any serious expectations this could happen. Congressional inability to agree on climate laws is the reason the Clean Air Act is being used in the first place.

Even so, further legal challenge to Obama’s power plant plans are inevitable. This will mean the rules are delayed by five years until around 2020, according to a blog for thinktank the Brookings Institution.

Despite the lack of a direct legal link commentators have already started picking over the entrails of Monday’s Supreme Court decision for signs of how it might rule if, or perhaps more likely when, the power plant rules are challenged.

The court’s warning against EPA expanding its regulatory reach is key here. Its power plant rules imply regulating not just power plants but other aspects of the economy.

The court ruling says:

“When an agency claims to discover in a long-extant statute an unheralded power to regulate ‘a significant portion of the American economy’… we typically greet its announcement with a measure of skepticism. We expect Congress to speak clearly if it wishes to assign an agency decisions of vast ‘economic and political signifi­cance’.”

That seems to suggest the court would take a dim view of EPA overreach. The EPA has already anticipated this and has designed its power plant rules to resist attack according to Brian H. Potts, partner at US law firm Foley & Lardner.

Potts writes:

“For example, if a court found that EPA’s renewable or energy efficiency assumptions were unlawful, the rule would just unravel a bit; it wouldn’t come completely undone.”

So while it seems unlikely that Obama’s power plant emissions controls will arrive on schedule – and that could have implications for UN climate talks in Paris next December – it would be a brave move to bet against them taking effect eventually.


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