In less than two weeks, comments are due for the Environmental Protection Agency’s highly controversial Clean Power Plan (CPP), which would regulate carbon dioxide emissions from existing power plants. According to the agency’s self-imposed schedule, the CPP is expected to go final in June 2015, with state plans to be presented a year later and the possibility of one- or two-year extensions for multi-state plans. The EPA will then have a year to review each proposal, which the agency can reject if it determines that a state’s targets will not be met. EPA Administrator Gina McCarthy has warned the agency will impose a federal plan if necessary.
While many observers are looking to the courts, ultimately, to determine the fate of the EPA’s efforts, fewer people appear to appreciate that the rule is highly likely to fail as proposed, regardless of the outcome of legal challenges. The Clean Air Act was not designed to regulate carbon emissions; that fact will become even more obvious to the public as more and more states simply cannot comply with the CPP over time – in many cases, at no fault of their own.
The CPP reflects a potential power grab by Washington because of the plan’s proposed compliance options, which do not reduce emissions at the entities EPA has set out to regulate. Under federal law, the agency has the authority to regulate emissions from specific sources (i.e., the plan’s first building block), but those powers do not extend outside the physical boundaries of such sources (i.e., “outside the fence”). For the other three building blocks of the CPP, the federal government has either no or only very limited powers to guarantee state compliance.
Statements by McCarthy that the agency might seek to enforce provisions in state plans that currently fall outside of EPA’s authority have raised concerns that the EPA’s efforts could undermine traditional state rights regarding energy and environmental policymaking. For instance, if a state with a renewable portfolio standard (RPS) included the mandate in its state plan, but then later lowered or repealed the RPS via the state Legislature, the EPA could move to enforce the original target, dismissing the will of a state’s elected officials.
These valid concerns have resulted in a number of state legislatures adopting laws that would actually forbid pursuing compliance methods “outside the fence” – a step that helps protect the balance of power between the states and the federal government. Next year, that list of states will likely grow, as state officials become more aware of the threat posed by EPA, resulting in the submission of a number of plans by the June 2015 deadline that are limited to “inside the fence” approaches. Many of these states will fall short of EPA compliance. Other states may simply refuse to provide plans to the agency.
Significantly, most of the plan’s compliance options require some states, particularly those dependent on coal and poor in renewable resources, to take various legislative actions that are not politically viable, especially in the timeframe prescribed by the agency. A coal state with a Democratic governor, for example, could find it impossible to coerce the state Legislature to accept new or dramatically increased renewable energy or efficiency targets. Accordingly, it makes practical sense for some states simply to say “no” to the EPA and wait for the agency’s response or for the litigation process to play out.
Undoubtedly, the agency would then be forced to move forward with a federal plan. But the scope of such action would be limited to “inside the fence” options that likely would not be technically viable, calling into question the legality of any federal plan. After all, the EPA cannot force a state legislature to pass any law that it does not support, including a renewable portfolio standard or an energy-efficiency mandate. The success of the Clean Power Plan in the near term thus depends on the willingness of states to surrender authority to the federal government and approve compliance actions over which the EPA has no control.
In the long term, the most significant threats to the Clean Power Plan, however, are the hurdles to compliance that fall outside the powers of the states and the EPA. Despite its much-vaunted flexibility, the CPP makes too many misguided assumptions about the availability of natural gas infrastructure, which the plan assumes will allow mass fuel switching from coal. After all, coal plants simply cannot be replaced by natural gas plants. EPA also appears to ignore the absence of a federal resolution of the nuclear waste issue – a problem that prevents nine U.S. states from building new nuclear units – and the potential challenges posed by other federal laws to the permitting of natural gas and renewable infrastructure (e.g., Endangered Species Act and National Environmental Policy Act).
Consequently, some states with every intention to meet the targets under the Clean Power Plan will find themselves unable to deliver the needed reductions at no fault of their own, which will pose major difficulties to EPA’s enforcement arm.
The collapse of the CPP will thus play out over time. Some states will refuse to play by the EPA’s rules upfront. Other states will fail to reach their targets over the long term, for a variety of reasons. The potential negative impact on environmental federalism – the foundation of our success in cleaning the nation’s air and water – is deeply troubling.
An EPA that relies on the willingness of states to surrender authority, with no power of its own to force those same steps, seriously calls into question the future of the agency’s credibility in compliance and enforcement.