Environmental Update

Publication April 6, 2017

US environmental rules that encourage renewable energy are in flux as the Trump administration tries to reverse a decade of US leadership on climate change.

In 2007, the US Supreme Court decided a case brought by Massachusetts and 11 other states to force the Environmental Protection Agency to establish guidelines on emissions of carbon dioxide, methane, nitrous oxide and hydrofluorocarbons. The states pointed to language in the Clean Air Act obligating EPA to set emissions standards for “any air pollutant” “which may reasonably be anticipated to endanger public health or welfare.” In the context of motor vehicle emissions, the states asked why the agency had refused to consider whether greenhouse gases fell into that category.

Through Massachusetts v. EPA, the court overturned EPA’s 2003 determinations that the agency lacked authority under the Clean Air Act to regulate greenhouse gases and that, if it had the authority, it would decline to exercise it. As a result, EPA began the formal process of examining the science documenting the risks posed by greenhouse gases, ultimately recognizing that those emissions had contributed to a public-safety crisis. Grounded in this science and the established statutory obligation, EPA’s 2009 “endangerment finding,” as it is known, survived multiple court challenges to form the basis for new standards on auto emissions and, later in 2015, for Obama’s Clean Power Plan.

Two months into the Trump administration, the Clean Power Plan is now endangered and the scientific finding is under political assault. 

Executive Order

President Trump traveled to EPA headquarters on March 28 to sign an executive order to set in motion the reversal of most of the Obama regulatory initiatives addressing climate change.

The order directs EPA to suspend, revise or rescind the Clean Power Plan limiting carbon emissions for existing power plants. It revokes several Obama executive orders and memoranda, including one that tried to remove regulations that deter private industry from responding to climate change by innovative means and another that requires the military to assess the threats posed by climate-induced turmoil abroad, including potential flows of refugees fleeing famine or war.

The order requires EPA and other agencies to identify rules that may hinder energy production. Within 180 days after the order, the head of each federal agency must submit a final report with “specific recommendations that, to the extent permitted by law, could alleviate or eliminate aspects of agency actions that burden domestic energy production.” Each agency “shall, as soon as practicable, suspend, revise, or rescind, or publish for notice and comment proposed rules suspending, revising, or rescinding, those actions, as appropriate and consistent with law.”

The order also directs federal agencies to stop considering how their actions will affect climate change when reviewing federal actions under the National Environmental Policy Act.

Significantly, however, the order did not instruct the EPA to rescind the agency’s 2009 endangerment finding that carbon dioxide is a pollutant.

Clean Power Plan

The Clean Power Plan, which would regulate greenhouse gas emissions from existing fossil fuel-powered power plants, has been tied up in the courts for over a year, after more than 26 states and others who believe the plan is unconstitutional sued to block implementation. The EPA head, Scott Pruitt, led the effort to overturn the plan in court while attorney general of Oklahoma. In 2016, the Supreme Court stayed implementation while the case was being argued before a lower court.

The Clean Power Plan requires a 32% reduction in carbon dioxide emissions from most existing coal- and gas-fired power plants by 2030. Each state had been assigned individual carbon reductions and would be required to submit an implementation plan demonstrating how it will achieve such reductions. The federal government would impose a federal plan in states that fail to submit their own plans or submit plans that fall short of what the Clean Power Plan requires.

As a response to the endangerment finding, the Obama EPA projected that the plan’s pollution reductions — which extend to more pollutants than just greenhouse gases — would prevent 3,600 premature deaths and 90,000 fewer asthma attacks in children in the United States between now and 2030.

Implementation has been on hold since the Supreme Court stay to let the litigation play out. A US appeals court heard oral arguments on the merits in September 2016. A decision is expected this year, with an appeal likely to follow to the Supreme Court.

The Trump administration asked the appeals court on March 28 to dispense with writing a decision on grounds that the court would be wasting time to decide a case about a plan the government expects to dismantle.

Ending the Clean Power Plan by agency action will not be easy. The plan was published in final form, so the Trump administration cannot simply reverse it by fiat. The government must go through the standard rulemaking process to undo it. Advocates of the plan are urging the appeals court in the meantime to issue an opinion.

It will take at least a year — probably longer — for EPA to scrap or otherwise revise the Clean Power Plan. The federal Administrative Procedures Act requires EPA to issue a notice of any proposed change, allow for public comment, and build an administrative record that presents a reasoned analysis supporting the changes.

Like any new environmental regulation, litigation inevitably follows. 

The fact that the endangerment finding about greenhouse gases remains in place means the agency remains obligated to take action to reduce greenhouse gases under the Clean Air Act. Thus, even if EPA were successful in withdrawing the Clean Power Plan, the agency will face demands to take other action on greenhouse gases. Attorneys general from 18 states have intervened in the appeals court case in support of the plan. The Trump administration is being advised to preserve some minimal level of climate regulation to give it a better hand in court.

If the court were to strike down the plan on grounds that it exceeds the agency’s authority, then the administration would not have to go through the rule-making process to undo it. 

Most observers believe that repealing the Clean Power Plan will have little effect on the US solar and wind industries because prices have come down enough to allow renewables to compete with fossil fuels. Many utility executives are moving forward with plans to diversify their generating portfolios and reduce carbon emissions anyway in anticipation that the country will eventually have to move in that direction, even if US policy is unclear in the near term. Utilities grow by adding to rate base. One way to do so is by investing in pollution control or in new power plants that use cleaner fuels. Doing nothing is not a recipe for growth. 

Many states have continued working on their implementation plans, and EPA had been continuing to provide support while the Clean Power Plan has been on hold in the courts.

However, at the end of March, EPA canceled proposed guidance to states for implementing the plan and model emissions trading rules, as well as rewards to states that take early steps to curb greenhouse gas emissions before the rule was to take effect.

Coal Power Plants

EPA also told a US appeals court on March 28 that it will no longer defend carbon emissions limits for new and modified power plants in light of President Trump’s executive order directing EPA to review and probably drop the limits. It urged the court to drop the case. The limits were issued under the Clean Air Act. They require that any new or modified coal-fired power plant be equipped with carbon capture technology.

The administration’s request came three weeks before the court was scheduled to hear oral arguments. The court canceled arguments as it evaluates the agency’s request.

Endangerment Finding

The conservative Competitive Enterprise Institute petitioned EPA in March to withdraw the 2009 endangerment finding. The finding led the agency to conclude that it had to regulate greenhouse gas emissions.

The petition says “evidence has continued to mount that directly contradicts” the idea that greenhouse gases pose a threat to public health and welfare. It says the evidence shows a pause in global warming since 1998, what warming there has been falls within the Earth’s historical temperature fluctuations, and the atmosphere is less sensitive to carbon dioxide buildup than previously predicted in warming models.

The established body of scientific evidence supporting climate change means any such effort to overturn the endangerment finding is vulnerable to a court challenge if pursued. Accordingly, new EPA head Scott Pruitt has wanted to avoid this head-on fight. He lobbied Trump to cut language from the March 28 executive order that would have called for a review.         

EPA must respond to the petition within a reasonable time frame, but there is no specific deadline. The agency could deny the request or start a new rulemaking to revise or rescind the finding.

Paris

President Trump is expected to decide whether to keep the US in the 2015 Paris global climate pact by late May 2017, just before he travels to the Group of Seven, or G-7, summit in Italy on May 26.

The Paris Agreement was reached after more than two decades of United Nations negotiations and is the first agreement to include climate actions by both developed and developing nations. The goal of the Paris pact is to keep the planet from warming more than 3.6 degrees Fahrenheit, the point at which many scientists suggest the earth will be locked into a future of severe droughts, rising sea levels and food shortages.

Trump has the authority to reverse course since the United States pledged itself to the terms of the Paris climate accord using Obama’s executive authority to negotiate international agreements rather than entering into a treaty. A treaty would have been hard to get the US Senate to ratify. Trump promised to “cancel” US participation during the presidential campaign.

The decision on whether to formally withdraw would announce the United States’ formal abdication of its leadership role on climate change, but it is likely irrelevant in practice as far as the US is concerned. The Trump Administration has already begun the process of gutting the key means by which the United States had planned to meet its obligations under the accord to reduce the nation’s climate footprint.

While many nations — including China — have promised to move forward even if the United States withdraws, withdrawal by the United States, the second largest emitter of greenhouse gases, puts the broader climate accord in jeopardy as other nations may follow suit.

Formal withdrawal may be academic in any event since the administration has made clear it has no plans to follow through on any commitments the US made in the Paris accord to reduce emissions. The US was supposed to reduce greenhouse gas emissions by 26% from 2005 levels by 2025. The Clean Power Plan was supposed to be the down payment on the US commitment. If successfully implemented, the plan would have put the United States half way toward this goal.

Naughty Words

According to news reports, a supervisor in the US Department of Energy international climate office instructed staff not to use the phrases “climate change,” “emissions reduction,” or “Paris Agreement” in any memos or other written communications. Staff were reportedly told that the words would cause a “visceral reaction” with Energy Secretary Rick Perry, his immediate staff, and the cadre of White House advisers at the top of the department. However, the Department of Energy says there has been no such directive.

The “climate office” regularly communicates with other countries in its role of trying to advance clean energy technology internationally. State Department staff and staff in other DOE offices have not been given a list of banned words, but have been avoiding climate-charged terms in memos and briefings in favor of words like “jobs” and “infrastructure.”

EPA Cuts

The Trump administration is proposing to reduce the EPA budget by 31% and to cut staff by 20%. A leaked 64-page internal EPA memo, dated March 21, provides details of the proposed budget cuts and spending priorities.

Of note to the power sector, the budget suggests a modest increase by $188,000 for National Environmental Policy Act implementation to expedite project reviews.

The White House will release its formal budget in May. Presidential budgets are viewed by Congress merely as suggestions. Congress has ultimate control over how much is spent.

The Trump budget cuts and Congressional inaction may deal a deathblow to the Science Advisory Board, an independent panel of outside scientists that advises EPA on scientific issues. The board would see its $646,000 budget cut by 84% “to reflect an anticipated lower number of peer reviews.”

The board has been under attack in Congress. In March, the House passed “The EPA Science Advisory Board Reform Act of 2017,” which would impose new qualifications for board members, such as disqualifying scientists who have EPA grants or contracts as having a conflict of interest. It would also require that at least 10% of the board be made of state or local or tribal government officials. The bill now heads to the Senate.

— contributed by Andrew Skroback in Washington, DC


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