February 21, 2018
EPA has scheduled listening sessions on the Clean Power Plan (CPP) for today (Kansas City), next week (San Francisco, Calif.) and next month (Gillette, Wyo.), dragging the controversial carbon control machinery back in discussion. Stayed by the Supreme Court, the CPP’s fate now resides with EPA under new management. Although a decision to repeal and replace the rule seems likely, litigation is the only certainty.
To understand the CPP’s eventful life, a very useful parable can be found in a famous but unlikely narrative, The Iliad. Simply substitute Homer’s dramatis personae for their contemporary counterparts and it becomes much easier to see what was behind EPA’s proposal, why 28 states rejected it, why the Supreme Court stayed it and why its fate is sealed.
In Homer’s famous imagining, the Greek army (EPA circa 2014) faced the daunting task of breaching the walls of Troy (the States). Frontal assault (cap and trade legislation) proved to be futile. So, after years of costly assaults, the Greeks instead changed strategies and offered the Trojans a gift (the Clean Power Plan). The gullible Trojans accepted this wooden horse – unaware that it concealed Greek warriors (CPP standards) who once inside would subdue them by stealth.
That was the plan. The CPP, like the Trojan Horse, was an elaborate subterfuge, an attempt to achieve by deceit what could not be achieved by straightforward means.
Subterfuge in this case was necessary because EPA’s regulatory ambition exceeded its authority. The Clean Air Act Sec. 111(d) does not allow the agency to dictate state-wide standards. It restricts the agency to defining the best system for reducing emissions and a “procedure” for states to follow as they develop their air quality plans with performance standards based on EPA’s best reduction system.
The subterfuge was the agency’s decision to conceal its own de facto standards in what it euphemistically called “emission performance rates” for coal and natural gas units. And here is where the outcome for EPA was different than it was for Homer’s Greeks. Unlike the Trojans, most governors rejected the CPP, realizing that EPA was effectively asking them to impose its made-in-Washington performance standard on each regulated source.
Of course, these governors were also cost conscious where EPA was not. Several economic studies of the CPP warned of higher wholesale electricity costs – with 45 states facing double-digit increases – that would fall hardest on the poorest households and make their state’s energy-intensive industries less competitive. Significant costs for negligible environmental benefits.
How did EPA stumble where the Greeks won? Unfortunately, EPA, didn’t have a “brave Achilles” to design its strategy for seducing the states. Instead it relied on NRDC lawyers, activists who, as The New York Times delicately put it, “had a strong voice in efforts to shape President Obama’s climate change agenda.” NRDC dreamed up the legal subterfuge that became the CPP’s Achilles’ heel.
Put it this way, if the Greeks had turned to NRDC for advice, they’d still be outside the walls of Troy pleading for Helen’s attention.
As EPA’s new management decides on its future carbon emissions course, there are lessons it can learn from the failure of its predecessor. First, if you’re proposing to transform the nation’s power grid and effect a major economic sector with higher costs, best to let Congress lead the way. Second, if your ambition exceeds your legal authority, adjust the former to fit the latter, not the other way around.
Finally, if you must invite outside counsel to write your rules for you, at least choose lawyers who understand the law.