- Undoing the Clean Power Plan
- November 23, 2016 | Authors: Joshua L. Belcher; Samina M. Bharmal; Jay Holloway; Liz Williamson
- Law Firm: Sutherland Asbill & Brennan LLP - Washington Office
- The election of Donald J. Trump as the next President of the United States appears to have dealt certain defeat for the Obama Climate Action Plan. Central to that effort was the Clean Power Plan, finalized by the U.S. Environmental Protection Agency (EPA) in 2015, which would have imposed greenhouse gas (GHG) emissions limits on existing coal- and gas-fired electric generation through heat rate improvements, generation shifting and trading mechanisms. A similar rulemaking imposed GHG performance standards on new coal- and gas-fired plants (GHG NSPS). The limits on coal-fired plants (new and existing) in particular were widely viewed as unachievable in practice (with the regulations on new coal plants relying in part on carbon capture and sequestration), and the limits appeared to ensure the ultimate phase-out of coal-fired plants over time.
President-elect Trump, however, campaigned to revive the coal industry in America, assailing climate change as a Chinese hoax and promising to roll back the current Administration’s efforts to constrain carbon emissions. He pledged to withdraw the Clean Power Plan, and it is expected that Mr. Trump also will withdraw the GHG NSPS. He further suggested that he will back the U.S. out of the Paris Climate Agreement. Although such an extensive reversal will face significant challenges, the Republican Party’s continued control of both chambers of Congress has further stacked the deck in favor of the new Administration’s efforts.
There are a number of options available to President-elect Trump to remove the ability of the EPA to regulate GHGs from power plants under the Clean Power Plan and the related GHG NSPS and to withdraw from the Paris Climate Agreement.
The Clean Power Plan and GHG NSPS can be rolled back through existing litigation. The primary state and industry appeals of the Clean Power Plan are currently before the U.S. Court of Appeals for the D.C. Circuit and awaiting a final decision. Briefs have been submitted and oral argument was concluded in late September 2016. Appeals of the GHG NSPS also are before the D.C. Circuit, but only initial briefs have been submitted. Trump’s election will not change the eventual rulings from the D.C. Circuit, which are very important due to the vacancy at the U.S. Supreme Court.
If the rules survive challenge at the D.C. Circuit, Trump’s Department of Justice (DOJ) could simply refuse to further defend them, similar to President Obama’s successful strategy regarding challenges to the Defense of Marriage Act, which ultimately was declared unconstitutional. Dampening the effectiveness of such a strategy is the fact that other parties to the litigation in support of the rules would continue their defense.
Another option is for the Trump EPA to request the D.C. Circuit to hold the Clean Power Plan litigation in abeyance—i.e., enter a pause on the proceedings—while EPA reconsiders the existing rules. Reconsidering the rules would involve deciding whether to reopen the administrative record for further comment or to pursue a new final rule, thus mooting the current litigation. Revisiting the rulemaking could result in a complete withdrawal (and there are several pending petitions with the EPA requesting this result), or it may involve a rule employing only Building Block 1 for heat rate improvements that were significantly more achievable than the remainder of the rule. The Trump EPA could also follow the path of the new Obama EPA when it paused the 2008 ozone National Ambient Air Quality Standards (NAAQS). In that case, the new Obama EPA paused the case in 2009. By 2011, the case resumed only because EPA chose to allow the 2008 ozone NAAQS to go forward and decided to incorporate its desired priorities in the 2015 ozone NAAQS.
The D.C. Circuit likely will anticipate this type of activity upon the change in administration. To prevent issuing what could amount to an “advisory opinion” in the event a Trump EPA pulls its support, it may not issue a ruling in the case until the new administration is in place and indicates how it intends to proceed. Another potential outcome is that the liberal-leaning D.C. Circuit upholds the Clean Power Plan before the arrival of the new administration. An appeal from that decision would risk landing on a split Supreme Court which could allow the D.C. Circuit decision to remain in place.
President-elect Trump is widely expected to nominate a conservative justice to fill the seat of Antonin Scalia. This new justice will be less deferential to EPA and likely will take a hostile view towards regulatory overreach. If a new justice is nominated and confirmed quickly, the Clean Power Plan could face a Supreme Court that is likely to override any adverse rulings from the D.C. Circuit. However, the political climate of the new Senate suggests that a nominee is likely to face delays from a filibuster by Senate Democrats, while Senator Mitch McConnell will be forced to consider revising Senate rules on filibustering to push the nominee through. A delay in filling the vacancy could allow the D.C. Circuit’s decision, and potentially the Clean Power Plan, to survive.
Rulemaking to Revise/Withdraw
Even if the Clean Power Plan survives litigation, a Trump EPA could also alter or withdraw the rules through a new rulemaking or reconsideration. This approach would require the Trump EPA to assemble new information for the rulemaking record, like economic and environmental studies, that would justify coming to a different conclusion. Appropriate notice and opportunity for public comment in accordance with the Administrative Procedures Act also would be required. Done properly, a new rulemaking would take considerably more time and resources to achieve, but would result in more certainty for the regulated community. On average, a rulemaking takes two years from proposal to final rule. Reconsideration, on the other hand, could potentially be done more quickly, but also will likely require notice and comment. Although the immediate threat of GHG emissions limitations would be removed, any such rulemakings would remain subject to appeal by environmental groups and others in support of carbon constraints.
EPA Enforcement Discretion
If the Clean Power Plan and GHG NSPS survive legal challenge, the EPA administrator also could simply refuse to further implement and/or enforce the rules. Refusal to enforce the rules, however, is also an imperfect option. Citizens would have the ability to bring suit under the Clean Air Act to either compel EPA enforcement (with litigation easily extending over two to three years) or to directly enforce the rules against fossil-fuel plants themselves.
Of note, the Trump transition team has contemplated rescinding the endangerment finding for GHGs, which forms the basis of EPA’s regulatory authority and which would form the basis of citizen suits in the absence of the exercise of that authority. Undoing the endangerment finding would be a significant and likely unsuccessful undertaking because the Supreme Court has already upheld the endangerment finding. However, if the Trump EPA were successful in undoing the endangerment finding, then EPA would no longer have authority to regulate GHGs as a pollutant. This result is a potentially hollow victory for industry, because the Supreme Court has blocked nuisance suits based on the fact that EPA has authority to regulate GHGs. Undoing EPA’s authority would likely lead to a wave of nuisance suits against power plants.
Paris Climate Agreement and CAA 115
The Obama Administration went to great lengths to ensure that the Paris Climate Agreement did not contain any binding emission reduction commitments, allowing him to avoid seeking ratification by the Senate. As such, President-elect Trump can simply refuse to abide by the terms of the agreement. There are no formal penalties that the international community could impose. Mr. Trump also could decide to formally withdraw from the Paris Agreement in a procedure that would extend over four years, or withdraw from the 1992 UN Framework Convention on Climate Change (UNFCCC), which would take only one year. Though formal withdrawal likely would cause more outcries from the international community, one potential advantage relates to Section 115 of the Clean Air Act. In short, Section 115 allows the EPA to regulate U.S. emissions potentially impacting foreign nations as long as foreign nations have procedures allowing the United States to comment on their emissions regulations that potentially impact the United States. Some have argued that the Paris Agreement and the UNFCCC meet these requirements. Withdrawal from the UNFCCC could therefore defuse claims that Section 115 of the Clean Air Act could be used as an alternative vehicle for regulating GHGs because the United States could no longer comment on foreign nations’ emissions regulations, nor could they comment on U.S. regulations, thus removing the EPA’s ability to rely on other nations’ climate actions to justify domestic regulatory authority.
It is clear that the governing priorities of the President-elect continue to evolve, and the path to rolling back climate change regulations will depend in great part on the work of his transition team and his ultimate appointments to EPA. Mr. Trump’s EPA transition team is led by Myron Ebell, director of the Center for Energy and Environment at the Competitive Enterprise Institute and a prominent climate change skeptic. A front-runner for EPA Administrator appears to be Kathleen Hartnett White, former Chairman and Commissioner of the Texas Commission on Environmental Quality and another prominent climate change skeptic. While specific strategies remain in the works, it is clear that efforts of the current Administration to curb climate change are on their way to being undone.