Energy & Environment

Supreme Court ruling on Clean Power Plan doesn’t halt EPA action or change timeline

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Last month, the Supreme Court unexpectedly issued a “stay” of the Clean Power Plan, the centerpiece of the Obama administration’s efforts to mitigate climate change. This decision unquestionably bars the Environmental Protection Agency (EPA) from enforcing any of the rule’s requirements until the lawsuits against it are fully resolved. But opponents claim that the stay requires the EPA to halt all work related to the rule. Under their spurious interpretation, the agency could not, for example, provide additional guidance on emissions trading to the many states and power companies that are moving ahead with planning processes for meeting the rule’s carbon reduction targets. In fact, there is ample precedent for federal agencies continuing to work on policies stayed by courts.

{mosads}Opponents also argue that the stay automatically “tolls” all of the Clean Power Plan’s compliance deadlines. In other words, they claim that even if the rule is upheld and the stay lifted, all future deadlines will be postponed for at least the amount of time that the stay was in place. This argument, too, is incorrect. The stay order itself says nothing about tolling, and prior practice suggests that if the rule is upheld, it will be up to the D.C. Circuit to decide whether and how to adjust the rule’s timeline, which doesn’t call for full compliance until 2030.

History shows that a “stay” doesn’t stop agency efforts

Before the Supreme Court’s decision, the EPA released an initial draft — in a separate docket from the Clean Power Plan itself — of model trading rules for states seeking to use emissions trading systems to meet their carbon reduction targets. (The agency also released a draft federal plan outlining compliance options for states that do not submit their own plans to the EPA.) The agency planned to finalize the model trading rules during the summer of 2016 in order to support local planning efforts, which are continuing in many states (including several that are opposed to the Clean Power Plan). Legal precedent suggests that the EPA has the right to continue this work.

Opponents of the rule have argued to the contrary. The attorneys general of Texas and West Virginia (two of the states leading the challenge to the Clean Power Plan in court) recently claimed that “the States, their agencies, and EPA should put their pencils down.” Jeff Holmstead, a former EPA official under President George W. Bush who is representing opponents of the Clean Power Plan, argued that further work by EPA would be the equivalent of “thumbing your nose at the Supreme Court.” Sen. James Inhofe (R-Okla.) recently made similar comments.

But the EPA has taken actions to implement stayed rules under both the Republican and Democratic administrations over a period spanning almost two decades. After the U.S. Court of Appeals for the D.C. Circuit issued a stay on the EPA’s Cross-State Air Pollution Rule in 2011, the agency continued work on the rule by adjusting state emissions budgets and resolving issues related to modeling. At the time, the EPA argued that its action “is consistent with and is unaffected by the Court’s Order staying the [rule].”

In 2003, under the George W. Bush administration, the EPA also declined to “put its pencil down” when faced with a stay of its rule adding an equipment replacement provision to the Clean Air Act’s New Source Review program. Indeed, while the stay was in place, the agency solicited public comments on multiple issues related to the rule. (Holmstead was the EPA’s assistant administrator for air and radiation at that time.)

During the Clinton administration in 1999, the D.C. Circuit stayed the NOx SIP (Nitrogen Oxides State Implementation Plan) Call, a rule limiting nitrogen oxides emissions affecting downwind states. While the stay was in place, the agency pursued a related regulation, but gave states the option to voluntarily comply with the stayed rule instead.

Recent claims that the EPA must halt all work on the Clean Power Plan would be persuasive if the court had granted an injunction rather than a stay. The nature of these remedies is very different, but the opponents of the Clean Power Plan treat them as if they were equivalent. As Chief Justice John Roberts wrote in the majority opinion in Nken v. Holder (2009), a stay “halt[s] or postpon[es] some portion of the proceeding, or … temporarily divest[s] an order of enforceability,” whereas an injunction “directs the conduct of a party, and does so with the backing of [a court’s] full coercive powers.” In short, an injunction is a binding restriction on the conduct of the agency. A stay holds much less power, focusing only on the enforceability of the rule.

What happens to compliance deadlines?

The EPA’s opponents have argued that the stay automatically delays, or “tolls” all Clean Power Plan deadlines, even though the Supreme Court made no mention of such tolling.

The U.S. Chamber of Commerce recently posted a white paper on its website arguing that, if the Clean Power Plan is upheld by the courts, the “EPA is required to move all the Rule’s deadlines into the future by at least the amount of time between the Stay’s issuance and its expiration.” Inhofe echoed this claim and wrote to the EPA administrator asking her to make clear that such tolling would take place.

Here, again, these claims fly in the face of precedent. Indeed, none of the cases cited in the Chamber of Commerce’s white paper support this tolling position. Decisions of this sort are made after a stay is lifted, as was the case for both the NOx SIP Call and the Cross-State Air Pollution Rule. Consistent with the proper reading of prior precedent, if the Supreme Court upholds the rule, or declines to hear the case after the D.C. Circuit upholds it, the D.C. Circuit will decide what to do about the various deadlines. That is not a decision that the Supreme Court made when it granted the stay, and it is ultimately a matter to be decided by the federal courts, not the EPA.

The D.C. Circuit will eventually have wide discretion on what to do about the deadlines, and there are likely to be competing arguments. For example, the general counsel for the National Association of Regulatory Utility Commissioners suggested that “[t]he deadlines that are further out — the 2030 and 2022 deadlines — may change less than the nearer-term ones” after the stay is lifted. Given the extensive lead time and compliance flexibility already built into the Clean Power Plan, and various market forces and policies that are continuing to drive emissions reductions in the power sector, the judges may well decide that revisions to the Clean Power Plan’s later deadlines are not justified.

While the stay is in effect, the EPA cannot impose Clean Power Plan requirements on any state that does not voluntarily act. But nothing bars the agency from continuing to develop guidance on emissions trading. Finalizing the model trading rules would both support states that want to move forward with their planning now and speed up the implementation process if the courts ultimately uphold the Clean Power Plan, thereby avoiding unnecessary delays that would further compromise our well-being. Providing interested states and regulated entities with tools to aid their planning is the responsible thing for the EPA to do.

Revesz is dean emeritus and Lawrence King Professor of Law at New York University School of Law, and director of the Institute for Policy Integrity. He is the co-author, with Jack Lienke, of the new book “Struggling for Air: Power Plants and the ‘War on Coal.'”

Tags Clean Power Plan Climate change Environmental Protection Agency EPA Jim Inhofe Supreme Court

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