After more than a year of campaigning on a promise to repeal the Clean Power Plan — the Obama administration’s sweeping attempt to regulate greenhouse gas emissions from power plants — President Trump looks ready to accomplish what has become a top priority for his administration: get rid of the regulation altogether, at least in its current form.
According to various reports, the administration plans to officially begin repealing the rule while simultaneously soliciting comments about what should replace it — a process that will likely take years of formal rule-making. But the administration has also signaled that it intends to move as quickly as possible, a decision that could open any new regulation up to legal challenges in the future should the administration trade speed for adherence to administrative requirements. Initial reports suggest that the administration’s approach will mirror what industry critics have long asked for — a sweeping repeal of the Obama-era rule, and a more limited interpretation of EPA’s regulatory authority in its place.
Supporters of the original rule — including environmental groups and Democratic state attorneys general — are sure to be watching the EPA closely as it repeals and replaces the rule, and will almost certainly challenge the replacement in court once it is finalized. Any replacement rule promulgated by the Trump administration is likely to be significantly weaker than the original plan — and while that won’t make much of a difference for states like California and New York, which are moving forward with a rapid transition to renewable energy, it will certainly have an impact on states like Kentucky or West Virginia, which have been loathe to transition away from traditional fuel sources like coal. A weaker rule will also make it more difficult for future administrations to strengthen the rule — they’d likely have to re-litigate the entire process, rather than just build off of an existing framework.
“If Scott Pruitt’s EPA wants recommendations for replacing the Clean Power Plan, here’s ours: keep it and follow the law,” League of Conservation Voters President Gene Karpinski said in a statement. “Repealing the Clean Power Plan would gut the only national limits on dangerous power plant carbon pollution, threatening our health, worsening climate change and continuing the cycle of monstrous hurricanes and wildfires that are devastating communities across the country.”
Here’s what we know so far about the administration’s plans for the Clean Power Plan:
A contested rule
The Clean Power Plan, which was first proposed in 2014 and finalized a little over a year later, sought to limit carbon emissions from power plants by requiring states to meet specific targets. The plan gave states the flexibility to decide exactly how to meet those targets in a few different ways: switching from carbon-polluting fuels like coal to less polluting fuels like natural gas, improving energy efficiency at existing power plants, and installing more renewable energy sources. The overall goal was to decrease U.S. carbon dioxide emissions from the electricity sector 32 percent below 2005 levels by 2030, and was presented as part of the Obama administration’s larger climate strategy in the run-up to the 2015 U.N. Climate Conference in Paris.
Almost immediately, fossil fuel groups and conservative states challenged the rule in court. They argued that it constituted gross government overreach because the EPA didn’t have the authority to regulate power plants outside of the power plants themselves (through things like increased renewables, for example). The Supreme Court issued a stay of the rule in February of 216, pending a decision by the courts about the rule’s legality. In September of 2016, the D.C. Circuit Court heard oral arguments in the case, and it was thought that the court would issue a ruling sometime in the spring of 2017.
But then Donald Trump was elected president of the United States, and everything changed.
Trump’s first indication that he meant to make good on his campaign promise to undo the rule came more than a month before he officially took office, when he nominated Oklahoma Attorney General Scott Pruitt — who had previously sued the EPA to stop the Clean Power Plan — as administrator of the EPA. Then, on March 28, Trump issued a sweeping executive order that, among other things, announced his formal intention to repeal the Clean Power Plan. That same night, the Trump Justice Department sent a request to the D.C. Circuit Court: don’t rule on the regulation until the EPA has had a chance to review Trump’s order and decide how it wants to move forward. The court granted that request, and has not ruled in the case — but at the beginning of August, gave the Trump administration 60 days to decide how it wants to move forward.
A limited approach to carbon regulation
At the same time that the Trump administration was asking the D.C. Circuit Court to delay ruling on the regulation, EPA Administrator Scott Pruitt was working to craft the agency’s plans for repealing — and potentially replacing — the rule. According to Pruitt’s schedule, he met with nearly every trade organization currently suing the stop the Clean Power Plan, including the National Mining Association, the National Association of Manufacturers, and the U.S. Chamber of Commerce.
Repealing and replacing a rule that has already been finalized isn’t an easy task. It requires the agency to go through the same formal process that was required to create the original rule — submitting a proposal, justifying its action, soliciting public comment, and then finalizing the rule. According to the Administrative Procedures Act, which guides agency rule-making, a rule cannot be changed or repealed for reasons that are either arbitrary or capricious; in other words, a rule can’t be repealed and replaced for purely political reasons.
Environmental groups openly questioned how the EPA would avoid the appearance of repealing on a political basis, particularly considering Pruitt’s track record of suing the EPA. But it appears as though the agency’s reasoning for repealing the rule will essentially mirror the argument that critics of the original rule made in court: that the EPA overstepped its legal authority in issuing regulations that went beyond a particular power plant or energy source. This is known as the “beyond the fenceline” approach because it requires states to take action, like shifting to renewable energy, that would impact the electrical grid rather than an individual source of pollution.
It’s unclear whether EPA regulations that occur outside of a particular source of pollution are actually illegal. That was, ostensibly, what the D.C. Circuit Court was set to rule on, before the case was derailed by the Trump administration’s efforts to repeal the rule altogether. Energy experts have been split on the question, with the breakdown dovetailing rather nicely with how that particular expert views fossil fuels versus renewable energy. Jeff Holmstead, for instance, former head of air quality for the EPA under President George W. Bush and current lobbyist for the fossil fuel industry, has argued that the “beyond the fenceline” approach stretches EPA authority “far beyond the breaking point.”
David Doniger, senior attorney for the Natural Resources Defense Council, has argued the opposite position, claiming that since power systems are integrated, the EPA’s authority to regulate emissions reductions “must include the full suite of demonstrated and available measures to reduce emissions at fossil-fuel power plants.”
The question of whether the EPA can regulate emissions from a particular source by encouraging action beyond that source will likely have to wait for a future administration, however, as it appears any replacement plan proposed by the Trump administration will adhere to a much more limited interpretation of the EPA’s regulatory authority.
“The Obama administration pushed the bounds of their authority so far that the Supreme Court issued a stay — the first in history — to prevent the so-called ‘Clean Power Plan’ from taking effect,” EPA spokeswoman Liz Bowman told BloombergPolitics via email. “Any replacement rule that the Trump administration proposes will be done carefully and properly within the confines of the law.”
Still, it’s far from certain what, if anything, the administration will propose as a replacement to the Clean Power Plan. According to Bloomberg and Reuters, Trump officials seem intent on repeal first, and then soliciting comments from the public, as well as industry stakeholders, regarding what should replace it.
A questionable mathematical basis
To help bolster the EPA’s case that the Clean Power Plan should be repealed, Politico reports that the agency will likely change much of the math that the Obama administration relied on to argue that the regulation would have a net economic benefit for the United States.
According to Politico, the Trump administration is planning to “drastically alter how it uses the social cost of carbon,” a change that would under-count the benefits of climate regulations. The social cost of carbon is a metric used to assign a monetary value to reducing carbon emissions, and is based on the idea that there are certain costs that society incurs for every ton of carbon dioxide emitted into the atmosphere — carbon that contributes to climate change that, in turn, creates problems like more intense storms or sea level rise, which have direct economic impacts.
Under the Obama administration, the social cost of carbon was around $36 per ton of carbon dioxide. Trump, however, has already set about reducing the influence that the social cost of carbon has in policy making; in his March executive order, he directed agencies to disregard the Obama administration’s calculations, and instead rely on a 2003 guidance that requires cost-benefit analyses to look at “benefits and costs that accrue to citizens and residents of the United States.”
That guidance is especially important when it comes to the Clean Power Plan, because the Obama administration argued that the social cost of carbon should reflect the global harm done by climate change, not just the harm done to the United States. According to a draft of the repeal plan obtained by Politico, the EPA plans to only count the domestic benefits of climate change. By directing agencies to focus more narrowly on just domestic costs, the Trump administration effectively reduces the purported benefit of climate actions — helping its argument that the United States should not shoulder the costs of benefits that would be felt globally.
According to Politico, the administration will also not count the benefits of cutting emissions other than carbon dioxide, something that lessens the economic benefits of the rule. In justifying the original rule, the EPA argued that the Clean Power Plan wouldn’t just cut carbon emissions — it would reduce other pollutants, like sulfur dioxide, nitrous oxide, and fine particles. Reducing those pollutants in the air would avoid 3,600 premature deaths, 1,700 heart attacks, 90,000 asthma attacks, and 300,000 missed work and school days annually. By focusing only on the benefits of cutting carbon emissions, the Trump administration would seriously reduce the overall economic benefit of the rule by ignoring these public health benefits, which the EPA found could total as much as $34 billion by 2030.
Another way the administration plans to change the mathematical calculus of the Clean Power Plan is to increase something known as the discount rate, which is how economic models factor in the benefit of spending money now to avoid economic consequences later. By considering a higher discount rate, the Trump administration could argue that it economically doesn’t make sense to spend money now because the upfront costs ultimately would not outweigh the long-term benefits.
Regardless of how the Trump administration ultimately changes the math, it’s almost certain that environmental groups will challenge their reasoning in court — and it will be up to the courts to decide whether any changes were made for arbitrary and capricious reasons.
“The courts are going to look very, very hard at this kind of cooking of the books,” NRDC’s Doniger told Politico. “There are two kinds of ways to get the law wrong, to play fast and loose with science and facts or with the economics, and you can lose for either or both reasons.”