Environmental Groups Warn Against “Just Say No”
Abby L. Harvey
GHG Monitor
3/27/2015
Continuing a campaign urging states to oppose the Environmental Protection Agency’s proposed carbon emissions standards for coal-fired power plants, Senate Majority Leader Mitch McConnell (R-Ky.) last week sent a letter to the nation’s governors advising them not to submit implementation plans until legal challenges to the rule are resolved. McConnell stated in the March 19 letter that “the EPA’s proposal goes far beyond its legal authority and that the courts are likely to strike it down.” Under the proposed rule, EPA sets state specific emissions reduction goals and requires states to develop and submit action plans to meet those goals through whatever means the state finds most appropriate. If a state does not submit a plan, the EPA will enforce a federal implementation plan. Environmental groups have spoken out against McConnell’s claims, though, stating that the rules are legal and if states follow his wait and see advice they will be putting themselves in a much less ideal, potentially more expensive position when it comes time to comply with the rule.
Much of McConnell’s argument focuses on the proposed rule’s best system of emission reduction (BSER), which consists of four “building blocks,” only one of which would be federally enforceable, McConnell wrote. “By requiring states to submit a plan aimed at achieving a lower emissions target based upon four so-called ‘building blocks’ — (1) improved power plant efficiencies, (2) switching electricity generation sources, (3) building new generation and transmission, and (4) reducing demand — the EPA is overreaching, as its authority under the Clean Air Act extends only to the first building block related to source specific energy efficiency upgrades. In other words, the EPA is attempting to compel states to do more themselves than what the agency would be authorized to do on its own, as many states have noted in their comments in response to the rule,” he wrote.
Lawmakers Propose Measures to Allow States to Opt Out
Various actions to allow states to opt out of the clean power plan have been proposed this week in Congress as well. Under draft legislation unveiled this week by House Energy and Power Subcommittee Chairman Rep. Ed Whitfield (R-Ky.), “no State shall be required to adopt or submit a State plan, and no State or entity within a State shall become subject to a Federal plan … if the Governor of such State makes a determination, and notifies the Administrator of the Environmental Protection Agency, that implementation of the State or Federal plan would; have a significant adverse effect on the State’s residential, commercial, or industrial ratepayers … [or] have a significant adverse effect on the reliability of the State’s electricity system.”
An amendment to the Senate version of the Fiscal Year 2016 budget resolution that would limit the EPA’s power to enforce to Clean Power Plan was introduced by McConnell, and passed by a vote of 57-43 late this week. The amendment would prevent the EPA from withholding highway funds from states that refuse to submit implementation plans. However, it seems unlikely that the EPA would try to withhold such funds, Kyle Aarons, Senior Fellow with the Center for Climate and Energy Solutions, told GHG Monitor this week. “When states don’t submit state plans under the Clean Air Act, EPA really has two things that it can do. One is to impose a federal plan and the other is to withhold highway funds,” Aarons said, stating that to he could not recall an instance in which EPA had gone the route of withholding highway funding. “In this situation I think they are extremely unlikely to do so. They haven’t talked about it at all. In the popular discussion, conferences and papers and such, that hasn’t really come up.”
State Plans Would be More Efficient, Environmental Groups Say
Environmental groups have argued that the fact that more tools are available to states for use in state implementation plans than to the EPA in a potential federal implementation plan only further illustrates why states should choose to submit a state plan. “Under the way that we all would like to see this go, EPA sets the target for the state the state then has a full toolbox of policies about how it gets to that figure. It can force coal fired power plants to be more efficient, it can shift dispatch by perhaps putting a price on carbon, it can increase renewable portfolio standards to make the utilities contract with more renewables and reduce emission that way,” Aarons said.
On the other hand, the tools available for emissions reduction under a federal implementation plan may be much more limited, making it far more difficult to reach the reduction targets efficiently and cost effectively, Aarons said. “It’s unclear what tools EPA has,” Aarons said. “One take on it is that EPA really can just regulate the power plants themselves and not renewables or efficiency or kind of anything outside the power plant. It would then in theory have to set strict targets for the power plant and then force the power plants to work kind of backwards through the states to bring more renewables on-line and more efficiency such that the power plants could operate less and meet their EPA requirements. That’s kind of one option but it’s really again it’s very unclear what that might look like.”
States Retain Power with State Plans
Refusing to submit a state plan, and instead having a federal plan implemented would further take power away from the states in deciding how to address carbon emissions, Ann Weeks, Senior Counsel and Legal Director of the Clean Air Task Force, told GHG Monitor this week. “They lose discretion over how they’re going to meet their targets potentially,” Weeks said. “The choice is between the state deciding how it wants to reach the target or EPA telling the state how it’s going to reach the targets so the states basically give up control over what their implementation plans look like.”
Aarons also said that states would be better off with a state implementation plan instead of a federal plan. “Everyone and anyone who follows this kind of agree states would be better off writing their own plan than working with the federal plan just because they can account for their specific circumstances. They know their own state a lot better of course than EPA would,” he said. “They can more easily find where the most cost effective reductions are.”
Is Delay Worth The Risk?
McConnell’s “just say no” advice to states hinges on his belief that the rule will not survive legal challenge. He also suggests that EPA is aware of this and has imposed a short deadline for the submission of plans in hopes that they will be in place before the rule is struck down. “As others have suggested, the EPA’s deadlines were very likely designed to force states to develop and submit implementation plans before the courts can decide on the legality of the CPP. Their hope is that states will commit to these plans before serious legal questions are resolved. This in itself should be a sufficiently compelling reason to deny the EPA’s request. Given the dubious legal rationale behind the EPA’s demands, rather than submitting plans now, states should allow the courts to rule on the merits of the CPP,” McConnell wrote.
Aarons and Weeks said, however, that the plan is legal and will likely withstand the challenges. If they are right, states who have chosen to wait out the legal challenges could find themselves in a precarious situation. Inaction, Weeks said, “certainly continues the uncertainty for longer. If a state cares about certainty it would start working now and figure out what it’s going to do and get going on it and plan and get ready and just do what needs to be done. Putting it off just makes it potentially more expensive.”
Further, Aarons noted many of what are believed to be the most cost-effective compliance options are market-based and will take more time to implement. Delaying now would make it more difficult in the long-term to implement these measures if the rule is found legally sound, Aarons said. “We certainly think it’s in the best interest of states to start engaging as soon as possible with EPA because some of the broader more cost effective solutions, like putting a price on carbon … they are more complex and take a lot more coordination and more time to set up. There are good examples out there … of successful market based mechanisms being used to reduce carbon emissions in the power sector but again they take time, so it would be in the state’s interest to start working sooner rather than later,” Aarons said.
