Latest Court Ruling re EPA and CO2

There is the story of the court’s decision, and the back story told by one judge dissenting partly from the other two on the panel.  The overview comes from courthousenews DC Circuit Rejects Trump Rollback of Power Plant Emission Rules.  Excerpts in italics with my bolds.

Overview of Ruling on Affordable Clean Energy Rule

The federal appeals court’s 182-page opinion released Tuesday was unsigned, written by a mostly unanimous three-judge panel. U.S. Circuit Judge Justin Walker, a Trump appointee who joined the court just a month before the case was heard, penned only a partial dissent.

The panel found the outgoing president’s Affordable Clean Energy rule, adopted in 2019 as part of Trump’s effort to roll back what he considered anti-business regulations, is based on an “erroneous legal premise.” The ACE rule dropped all statewide emissions caps, giving state regulators greater autonomy and more time to reduce pollution.

The court held Tuesday that there is “no basis—grammatical, contextual, or otherwise—for the EPA’s assertion” about source-specific language in federal law that it claims limits its oversight of fossil fuel power sources.

While the ruling was welcomed by health and environmental groups, it only returns things to the status quo.  Litigation tied up Obama’s Clean Power Plan shortly after it was passed and it never took effect thanks to a Supreme Court stay in 2016.

The Trump effort to roll it back started in 2017 before culminating with the ACE rule in 2019. Now the ACE rule too will be bound up in legal purgatory, if not scrapped entirely by the incoming Biden administration.

Walker was joined on the panel by U.S. Circuit Judges Cornelia Pillard and Patricia Millett, both Obama appointees.  While the Trump appointee mostly concurred with his colleagues, Walker filed a partial dissent saying he took issue with both Obama and Trump’s regulatory efforts.

The Back Story–How We Got Here

Judge Walker wrote an interesting essay on the twists and turns with climate change, the EPA and CO2 emissions.  His statement is at the end of the court document (here).  Excerpts in italics with my bolds.

WALKER, Circuit Judge, concurring in part, concurring in the judgment in part, and dissenting in part: This case concerns two rules related to climate change. The EPA promulgated both rules under § 111 of the Clean Air Act.1

A major milestone in climate regulation, the first rule set caps for carbon emissions. Those caps would have likely forced shifts in power generation from higher-polluting energy sources (such as coal-fired power plants) to lower-emitting sources (such as natural gas or renewable energy sources). 2 That policy is called generation shifting.

Hardly any party in this case makes a serious and sustained argument that § 111 includes a clear statement unambiguously authorizing the EPA to consider off-site solutions like generation shifting. And because the rule implicates “decisions of vast economic and political significance,” Congress’s failure to clearly authorize the rule means the EPA lacked the authority to promulgate it.

The second rule repealed the first and partially replaced it with different regulations of coal-fired power plants. Dozens of parties have challenged both the repeal and the provisions replacing it.

In my view, the EPA was required to repeal the first rule and wrong to replace it with provisions promulgated under § 111. That’s because coal-fired power plants are already regulated under § 112, and § 111 excludes from its scope any power plants regulated under § 112. Thus, the EPA has no authority to regulate coal-fired power plants under§ 111.

Background Concerning EPA and Carbon Dioxide

In its clearest provisions, the Clean Air Act evinces a political consensus. For example, according to Massachusetts v. EPA, carbon dioxide is clearly a pollutant, and the Act’s § 202 unambiguously directs the EPA to curb pollution from new cars.

But for every carbon question answered in that case, many more were not even presented. For example, does the Clean Air Act force the electric-power industry to shift from fossil fuels to renewable resources? If so, by how much? And who will pay for it? Even if Congress could delegate those decisions, Massachusetts v. EPA does not say where in the Clean Air Act Congress clearly did so.

In 2009, Congress tried to supply that clarity through new legislation.

The House succeeded.
The President supported it.
But that effort stalled in the Senate.

Since climate change is real, man-made, and important, Congress’s failure to act was, to many, a disappointment. But the process worked as it was designed. In general, Senators from small states blocked legislation they viewed as adverse to their voters. And because small states have outsized influence in the Senate, no bill arrived on the President’s desk.

Nor have dozens of other climate-related bills introduced since then. So President Obama ordered the EPA to do what Congress wouldn’t. In 2015, after “years of unprecedented outreach and public engagement” — including 4.3 million public comments (about 4.25 million more than in Massachusetts v.EPA) — the EPA promulgated a rule aimed at “leading global efforts to address climate change.”

Entitled the Clean Power Plan, the EPA’s rule used the Clean Air Act’s § 111 to set limits for carbon emissions that would likely be impossible to achieve at individual coal-fired power plants because of costs, unavailable technologies, or a need to severely reduce usage. In that sense, the limits required generation shifting: shifting production from coal-fired power plants to facilities that use natural gas or renewable resources.

To be clear, the 2015 Rule did not expressly say, “Power plants must adopt off-site solutions.” But it did set strict emission limits in part by considering off-site solutions. And those emission limits would likely have been unachievable or too costly to meet if off-site solutions were off the table.

A political faction opposed generation shifting. It challenged the 2015 Rule in this Court, arguing that § 111 does not allow the EPA to consider off-site solutions when determining the best system of emission reduction. The faction included about twenty-four states, represented by many Senators who opposed the 2009 legislation. Conversely, a political faction of about eighteen states defended the rule. Many of their Senators had supported the stymied legislation.

At that litigation’s outset, our Court refused to stay the rule’s implementation. But in an unprecedented intervention, the Supreme Court did what this Court would not. And through its stay, the Supreme Court implied that the challengers would likely succeed on the case’s merits.

Taking the Supreme Court’s not-so-subtle hint, in 2019 President Trump’s EPA repealed the 2015 Rule and issued the Affordable Clean Energy Rule.

Like the rule it replaced, the 2019 Rule relies on the Clean Air Act’s § 111 to reduce carbon emissions. But unlike its predecessor, the 2019 Rule did not include generation shifting in its final determination of the best system of emission reduction.

A new faction then challenged the 2019 Rule. It looked a lot like the faction that had defended the 2015 Rule. Arrayed against that faction were many states and groups that had opposed the old rule. And so once again, politically diverse states and politically adverse special interest groups brought their political brawl into a judiciary designed to be apolitical.

In this latest round, the briefing’s word count exceeded a quarter of a million words. The oral argument lasted roughly nine hours. The case’s caption alone runs beyond a dozen pages. And yet, in all that analysis, hardly any of the dozens of petitioners or intervenors defending the 2015 Rule make a serious and sustained argument that § 111 includes a clear statement unambiguously authorizing the EPA to consider a system of emission reduction that includes off-site solutions or that § 111 otherwise satisfies the major-rules doctrine’s clear statement requirement. Neither does the EPA.

In light of that, I doubt § 111 authorizes the 2015 Rule — arguably one of the most consequential rules ever proposed by an administrative agency:
• It required a “more aggressive transformation in the domestic energy industry,” marking for President Obama a “major milestone for his presidency.”
• It aspired to reduce that industry’s carbon emissions by 32 percent — “equal to the annual emissions from more than 166 million cars.”
• Leaders of the environmental movement considered the rule “groundbreaking,” called its announcement “historic,” and labeled it a “critically important catalyst.”

The potential costs and benefits of the 2015 Rule are almost unfathomable. Industry analysts expected wholesale electricity’s cost to rise by $214 billion. The cost to replace shuttered capacity? Another $64 billion. (“A billion here, a billion there, and pretty soon you’re talking real money.”)

True, you can dismiss that research as industry-funded. But the EPA itself predicted its rule would cost billions of dollars and eliminate thousands of jobs.

On the benefits side of the ledger, the White House labeled the 2015 Rule a “Landmark,” and the President called it “the single most important step America has ever taken in the fight against global climate change.” With that in mind, calculating the rule’s benefits requires a sober appraisal of that fight’s high stakes. According to the rule’s advocates, victory over climate change will:

• lower ocean levels;
• preserve glaciers;
• reduce asthma;
• make hearts healthier;
• slow tropical diseases;
• abate hurricanes;
• temper wildfires;
• reduce droughts;
• stop many floods;
• rescue whole ecosystems; and
• save from extinction up to “half the species on earth.”

These are, to put it mildly, serious issues. Lives are at stake. And even though it’s hard to put a dollar figure on the net value on what many understandably consider invaluable, the EPA tried: $36 billion, it said, give or take about a $10- billion margin of error.

So say what you will about the cost-benefit analysis behind generation shifting, it’s hardly a minor question.

Minor questions do not forestall consequences comparable to “the extinction event that wiped out the dinosaurs 65 million years ago.” Minor questions are not analogous to “Thermopylae, Agincourt, Trafalgar, Lexington and Concord, Dunkirk, Pearl Harbor, the Battle of the Bulge, Midway and Sept. 11.” Minor rules do not inspire “years of unprecedented outreach and public engagement.” Minor rules are not “the single most important step America has ever taken in the fight against global climate change.” Minor rules do not put thousands of men and women out of work. And minor rules do not calculate $10 billion in net benefits as their margin of error.

Rather, the question of how to make this “the moment when the rise of the oceans began to slow and our planet began to heal” — and who should pay for it — requires a “decision[] of vast economic and political significance.” That standard is not mine. It is the Supreme Court’s. And no cocktail of factors informing the major-rules doctrine can obscure its ultimate inquiry: Does the rule implicate a “decision[] of vast economic and political significance”?

Proponents of the 2015 Rule say it doesn’t. They have to. If it did, it’s invalid — because a clear statement is missing. And according to the Supreme Court, that is exactly what a major rule requires.

To be sure, if we frame a question broadly enough, Congress will have always answered it. Does the Clean Air Act direct the EPA to make our air cleaner? Clearly yes. Does it require at least some carbon reduction? According to Massachusetts v. EPA, again yes.

But how should the EPA reduce carbon emissions from power plants? And who should pay for it? To those major questions, the Clean Air Act’s answers are far from clear.

I admit the Supreme Court has proceeded with baby steps toward a standard for its major-rules doctrine. But “big things have small beginnings.” And even though its guidance has been neither sweeping nor precise, the Supreme Court has at least drawn this line in the sand: Either a statute clearly endorses a major rule, or there can be no major rule.

Moreover, if Congress merely allowed generation shifting (it didn’t), but did not clearly require it, I doubt doing so was constitutional. For example, imagine a Congress that says, “The EPA may choose to consider off-site solutions for its best system of emission reduction, but the EPA may choose not to consider off-site solutions.” In that instance, Congress has clearly delegated to the EPA its legislative power to determine whether generation shifting should be part of the best system of emission reduction — a “decision[] of vast economic and political significance.”

Such delegation might pass muster under a constitution amended by “moments” rather than the “reflection and choice” prescribed by Article V. But if ever there was an era when an agency’s good sense was alone enough to make its rules good law, that era is over.

Congress decides what major rules make good sense. The Constitution’s First Article begins, “All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.” And every “law” must “pass[] the House of Representatives and the Senate” and “be presented to the President.” Thus, whatever multi-billion-dollar regulatory power the federal government might enjoy, it’s found on the open floor of an accountable Congress, not in the impenetrable halls of an administrative agency — even if that agency is an overflowing font of good sense.

Over time, the Supreme Court will further illuminate the nature of major questions and the limits of delegation. And under that case law, federal regulation will undoubtedly endure. So will federal regulators. Administrative agencies are constitutional, and they’re here to stay.

Beyond that, I leave it for others to predict what the Supreme Court’s emerging jurisprudence may imply for those agencies’ profiles. Here, regardless of deference and delegation doctrines, the regulation of coal-fired power plants under § 111 is invalid for a more mundane reason: A 1990 amendment to the Clean Air Act forbids it.

The Clean Air Act Amendments of 1990 prohibit the EPA from subjecting power plants to regulation under § 111 if they are already regulated under § 112. The 2015 Rule and the 2019 Rule rely on § 111 for the authority to regulate coal-fired power plants. Because the EPA already regulates those coal-fired power plants under § 112, the rules are invalid.

This case touches on some of administrative law’s most consequential, unresolved issues. What is the reach of Massachusetts v. EPA? What is the meaning of a major question? What are the limits of congressional delegation?

My comment:  I much appreciate Judge Walker’s reprise of the historical journey.  After earning my degree in organic chemistry, I am still offended that a bunch of  lawyers refer to CO2 as a “pollutant” as though it were an artificial chemical rather than the stuff of life.  And it annoys me that the American Lung Association fronted this legal attack, as though CO2 was causing breathing problems in addition to a bit of warming during our present ice age. And that list of ailments solved by reducing CO2 emissions rivals any snake oil poster ever printed.

Observers noted that this ruling produces a kind of limbo: Obama’s Clean Power Plan is out of order, and now Trumps Affordable Clean Energy program is shot down.  Likely Biden will try to return to CPP as though Trump never happened, but the same objections will still be raised.  Clearly Judge Walker sees the issue headed for the Supreme Court as the stakes are too high for anyone else.  After their lack of courage on the 2020 election scandal, who knows what the Supremes will do.

Footnote: See post The Poisonous Tree of Climate Change

The roots of this poisonous tree are found in citing the famous Massachusetts v. E.P.A. (2007) case decided by a 5-4 opinion of Supreme Court justices (consensus rate: 56%). But let’s see in what context lies that reference and whether it is a quotation from a source or an issue addressed by the court. The majority opinion was written by Justice Stevens, with dissenting opinions from Chief Justice Roberts and Justice Scalia. All these documents are available at sureme.justia.com Massachusetts v. EPA, 549 U.S. 497 (2007).  The linked post summarized the twisted logic that was applied.