Essay Responding to Brian H. Potts, “The President’s Climate Plan for Power Plants Won’t Significantly Lower Emissions”

Critics of the Obama Administration’s recently announced efforts to control climate pollution seek to discredit the idea of existing power plant greenhouse gas emissions limits based on legal arguments that are both shortsighted and unfounded.¹1.The author would like to thank Jordan Asch for his assistance in the production of this Essay. ²2.President Obama’s Climate Action Plan is available online. Executive Office of the President, The President’s Climate Action Plan, Executive Office of the President (June 2013), http://www.whitehouse.gov/sites/default/files/image/president27sclimateactionplan.pdf. These arguments have most recently appeared in an essay posted on the Yale Journal on Regulation Online by attorney Brian Potts,³3.Brian H. Potts, The President’s Climate Plan for Power Plants Won’t Significantly Lower Emissions, 31 Yale J. on Reg. Online (Aug. 22, 2013). but some of the same ideas were put forward late last year by C. Boyden Gray, at a Resources for the Future Forum.⁴4.Climate Change Fight Over Utility GHG Rule Shifts Back To EPA After Court Rejects Lawsuit, Inside EPA Environmental Newsstand, Weekly Analysis (Dec. 14, 2012), http://environmentalnewsstand.com/Clean-Energy-General/Weekly-Analysis/menu-id-1002/Page-29.html?D=032913&S=LI&goback=.gde_78238_member_227580369#.UlWegtIw2UM. Mr. Gray’s argument has also recently surfaced at a forum held in Washington on the substance of EPA’s forthcoming proposal. See Kyle Danish, Section 111(d) and Regulation of CO2 Emissions from Existing Power Plants, at slide 6 (presentation made at the Bipartisan Policy Center meeting on GHG Regulation of Existing Power Plants Under the Clean Air Act: What Is It and How Will It Work?) (September 25, 2013), http://www.bipartisanpolicy.org/sites/default/files/Danish%20.pdf. Their basic premise is that the EPA doesn’t have the authority to regulate existing power plant greenhouse gas emissions at all. Mr. Potts also argues that the Agency is constrained by actions it already has taken under another program.

This might seem like just an interesting legal question, but it has much larger implications. In the absence of Congressional action, using available regulatory authorities in the very near term is the only present option for the U.S. to make the vigorous efforts needed to bring our climate emissions under control.⁵5.See Justin Gillis, By 2047, Coldest Years May Be Warmer Than Hottest in Past, Scientists Say, N.Y. Times, Oct. 10, 2013 at A9 (noting that a recent study by scientists at the University of Hawaii shows that “a vigorous global effort” is needed now in order to delay the onset of unprecedented temperatures and allow for societal adaptation). Existing fossil-fueled power plants are the largest U.S. industrial source of carbon dioxide.⁶6.Fossil-fuel fired electricity generation is responsible for approximately 40% percent of U.S. man-made carbon dioxide emissions. U.S. EPA, Inventory of U.S. Greenhouse Gas Emissions and Sinks, 1990-2011, Envtl. Prot. Agency (Apr. 12, 2013) (EPA 430-R-13-001, April 12. 2013), Executive Summary at ES-54, Table ES-2 (“Recent Trends in U.S. Greenhouse Gas Emissions and Sinks”), http://www.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2013-Main-Text.pdf. Once emitted from a smokestack, some portion of carbon dioxide emissions persists in the atmosphere for over a century, causing enduring climate damage – so the need for near term curtailment of such emissions is extraordinarily compelling.⁷7.Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act: Final Rule, 74 Fed. Reg. 66496, 66517 n.18 (Dec. 15, 2009) (discussing the climate forcing lifetimes of various greenhouse gases, including carbon dioxide) (hereinafter “Endangerment Finding”). See also, Intergovernmental Panel on Climate Change, Climate Change 2013: The Physical Science Basis: Summary for Policymakers, Working Group I Contribution to the IPCC Fifth Assessment Report (Sept. 27, 2013) at SPM-20 (summarizing the finding that “(d)epending on the (analyzed) scenario, about 15 to 40% of emitted CO2 will remain in the atmosphere longer than 1,000 years.”). Attempts to cut off efforts to reduce carbon dioxide emissions from the power sector before they’ve even begun therefore raise significant concerns. Without quick action on this sector, which is some 40% of the carbon dioxide problem, we simply cannot get a handle on U.S. climate pollution. Fortunately, contrary to the arguments put forward by Attorneys Potts and Gray, the EPA does have authority to regulate power sector greenhouse gas emissions using Clean Air Act section 111(d).

The EPA’s authority under 111(d) includes authority to set standards for existing power plant climate pollutants

At the heart of the matter is language contained in section 111(d) of the Clean Air Act, describing when the EPA must direct the establishment of “standards of performance” – limits on air pollution emissions – for existing sources in listed industries.⁸8.42 U.S.C. § 7411(d). This section of the Act was adjusted in 1990, reflecting significant substantive changes made by Congress to an entirely different section of the Act that deals with air toxics like mercury, arsenic and chromium. As described below, Congress, in making housekeeping amendments to section 111(d), was primarily preserving a framework that avoided double regulation of toxic air pollutants emitted by existing sources.

The relevant part of Clean Air Act section 111(d) as it appears in the U.S. Code requires the EPA to “prescribe regulations” under which states submit plans including “standards of performance” for “any existing source” and “for any air pollutant (i) [which is not regulated under the Act’s national ambient air quality standards rules] or emitted from a source category which is regulated under [the section governing air toxics].”⁹9.Id. § 7411(d)(1). Attorneys Potts and Gray read this provision very narrowly as barring the EPA’s ability to limit greenhouse gas emissions from existing fossil-fuel fired power plants, because coal-fired power plants (since 2000) are “a source category which is regulated under” the air toxics provisions.¹⁰10.Id. § 7411(d)(1)(A)(i); see also Regulatory Finding on the Emissions of Hazardous Air Pollutants From Electric Utility Steam Generating Units, 65 Fed. Reg. 79825, 79830 (Dec. 20, 2000) (discussing this regulatory change in section III, “What is EPA’s Regulatory Finding?”); National Emission Standards for Hazardous Air Pollutants From Coal- and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units, 77 Fed. Reg. 9304, 9308 (Feb. 16, 2012) (discussing the regulatory scheme in subsection C, “What is the relationship between this final rule and other combustion rules?”). They assert that because existing power plants’ air toxics are regulated, their greenhouse gas emissions cannot be regulated as well. This argument, however, does not make sense from either a legal or a policy perspective.

In 1990, Congress completely overhauled the air toxics provisions of the statute, moving from the previous system (under which the EPA was supposed to list and regulate toxic air pollutants individually), to one in which Congress itself listed 188 toxic pollutants in section 112(b) of the statute and required the EPA to list and then regulate specified industries.¹¹11.see Sierra Club v. EPA, 353 F.3d 976, 979-80 (D.C. Cir. 2004) (describing the history of the air toxics provisions from 1970-1990). Under the new system, for each listed industry the EPA issues new and existing source standards for each emitted 112(b) toxic pollutant.¹²12.See generally 42 U.S.C. §§ 7412(c), (d) (describing the process for listing industries and regulating new and existing sources of 112(b)-listed air toxics).

Additionally, prior to 1990, section 111(d) authorized existing source performance standards for “any air pollutant (i) for which air quality criteria have not been issued or which is not included on a list published under section … [108(a) of the Clean Air Act] or … [112 (b)(1)(A) of the Clean Air Act].”¹³13.42 U.S.C. § 7411(d)(1) (1988) (emphasis added) (current version amended by Pub. L. No. 101-549 and at 42 U.S.C. §7411(d)(1)). At that time, section 112(b)(1)(A) required the Administrator to list the hazardous air pollutants for which regulation would be promulgated.¹⁴14.42 U.S.C. § 7412(b)(1)(A) (1988) current version amended by Pub. L. No. 101-549 and at 42 U.S.C. §7412(b)(1)(A)). Section 108 of the Clean Air Act was and continues to be the section describing the Administrator’s duty to list air pollutants for which National Ambient Air Quality Standards (NAAQS) will be issued. 42 U.S.C. § 7408. Carbon dioxide is not a NAAQS pollutant, and it is not a listed hazardous air pollutant. See Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Final Rule, 75 Fed. Reg. 31514, 31520 (noting that EPA has not proposed or finalized a decision setting a NAAQS for any greenhouse gas); and 42 U.S.C. § 7412(b)(1) (presenting the list of hazardous air pollutants). After 1990, section 112(b)(1) contained the list of air toxics that Congress declared must be regulated when emitted by listed industries.¹⁵15.42 U.S.C. § 7412(b)(1) (2012).

It is important to understand that as part of the 1990 overhaul of the air toxics provisions, conforming changes to other parts of the statute were required. Attempting to retain the prior prohibition on double regulation of industrial air toxics, and with the EPA now regulating industry-by-industry, both the House and the Senate made non-substantive cleanup changes accompanying the 1990 overhaul.

The House amendment to section 111(d) shows up in section 108, “Miscellaneous Provisions,”¹⁶16.Clean Air Act Amendments, Pub. L. No. 101-549 § 108, 104 Stat. 2399, 2467 (1990). while the Senate amendment appears in later section 110, “Conforming Amendments.”¹⁷17.Id. § 110, 104 Stat. 2574. While the codified statute includes only the language of the first-in-time House amendment, both the House and the (later-in-time) Senate amendments appear in the Statutes at Large, which provide controlling “legal evidence of laws.”¹⁸18.United States Nat’l Bank of Oregon v. Independent Ins. Agents of Am., 508 U.S. 439, 448 (1993) (citing 1 U.S.C. § 112). In the Statutes at Large, the conforming amendments are reflected in parentheses: section 111(d) applies to “any air pollutant…which is not included on a list published under section 7408(a) (or emitted from a source category which is regulated under section 112) [House amendment] (or 112(b) [Senate amendment]).”¹⁹19.Clean Air Act Amendments, Pub. L. No. 101-549 §§ 108, 302, 104 Stat. 2399, 2467, 2574 (1990). While the codified version contains only the House amendment, an additional longstanding rule of statutory construction in such circumstances is, “the last provision in point of arrangement must control” – that is, the Senate amendment controls here.²⁰20.See, e.g. Lodge 1858, Am Fed. of Gov’t Employees v. Webb, 580 F.2d 496, 510 & n.31 (D.C. Cir. 1978) (citing over 80 cases so holding).

Taken together, this means that an accurate reading of the statute is that section 111(d) is to be used to regulate any air pollutant that is not included on a list published under section 7408(a) or 112(b). In addition to being doctrinally correct, this result also simply makes good policy sense, as it avoids double regulation: section 111(d)’s prohibition on using existing source standards for pollutants for which National Ambient Air Quality Standards have been issued avoids double regulation because existing sources of those pollutants are regulated already under state implementation plans.²¹21.42 U.S.C § 7410(a)(2)(C). The prohibition on using existing source standards for air toxics avoids double regulation because existing sources of those pollutants are regulated under section 112.²²22.42 U.S.C. §§ 7412(d)(2)-7412(d)(3). Attorneys Potts and Gray overlook this. Regardless, their position—that these housekeeping changes could have been intended to effectuate a sweeping change in the meaning of section 111(d)—simply does not hold water.

The EPA is unconstrained by prior Best Available Control Technology (BACT) determinations in directing issuance of existing source performance standards

Mr. Potts additionally takes a position in the alternative, namely that any authority the EPA has under section 111(d) to direct existing source standards for greenhouse gases is constrained by its prior efforts under the greenhouse gas permitting authority for new sources. He erroneously asserts that preconstruction permits issued under the Prevention of Significant Deterioration (“PSD”) program found in section 165 of the Act limit the EPA’s authority to prescribe existing source standards under section 111(d) of the New Source Performance Standards program.²³23.The Clean Air Act’s PSD preconstruction permitting provisions and relevant definitions are found at 42 U.S.C. §§ 7465-7469. The PSD provisions do require each new (or modified) source to achieve emissions controls that are more stringent than those provided by the performance standard applicable to all new (or as relevant, existing) sources.²⁴24.”See of this title.”).”] But nothing in the statute requires the converse, i.e., that limits in any new source PSD permits, bind the EPA in setting later existing source performance standards for that industry.

The statute’s language requires that a standard of performance, whether for a new or existing source, be one reflecting the “best system of emissions reduction which (taking into account the costs and non-air quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated.”²⁵25.42 U.S.C. §7411(a)(1) (2012). The D.C. Circuit has interpreted the phrase “adequately demonstrated” in the new source performance standard setting context as technology forcing: “look[ing] toward what may fairly be projected for the regulated future,” not as meaning that all sources must be able to meet the requirement.²⁶26.Lignite Energy Council v. EPA, 198 F.3d 930, 934 (D.C. Cir. 1999) (quoting Portland Cement Ass’n v. Ruckelshaus, 486 F.2d 375, 391 (D.C. Cir. 1973)). While there is much less experience with existing source standards, the statutory definition of “standard of performance” is the same for both new and existing sources,²⁷27.See 42 U.S.C. § 7411(a)(1) (2012) (defining “standard of performance”); 42 U.S.C. § 7411(d)(1) (referring to the establishment of “standards of performance” for existing sources). strongly suggesting that advancing control technologies must be a consideration to be weighed in existing source standard-setting as well. And, while the EPA is not prohibited from evaluating past greenhouse gas permits for some evidence of the achievability of emissions reductions levels, just as clearly, nothing in the statute or the case law restricts the EPA to prior permit levels in any way, when directing the appropriate level of existing source standards. In fact, the opposite is true. Given that the same definition of “standard of performance” applies in both new and existing source standard setting, it stands to reason that the Agency also must direct that existing source standards be based on the best system of emissions reduction, reasonably expected to serve the interests of pollution control at existing sources, without becoming exorbitantly costly.²⁸28.For reference to exorbitance as the upper bound on the cost factor under the definition of “standard of performance” in 42 U.S.C. § 7411(a)(1), see Lignite Energy Council, 198 F.3d at 933 (noting that EPA's choice in balancing the statutory factors “will be sustained unless the environmental or economic costs of using the technology are exorbitant” and citing National Asphalt Pavement Ass'n v. Train, 539 F.2d 775, 786 (D.C. Cir. 1976)).

This is not just a battle of legal niceties. We must acknowledge that the “interests of pollution control” in the context of power plant carbon dioxide emissions includes the interest in taking strong near term steps to avoid a climate catastrophe.²⁹29.For reference to the “interests of pollution control” as relevant to the selection of the best system of emission reduction, see Essex Chemical v. Ruckelshaus, 486 F.2d 427, 433 (1973), cert. denied, 416 U.S. 969 (1974). Reducing carbon dioxide emissions from existing sources in the nation’s power sector is absolutely essential, as the Obama Administration’s recently unveiled Climate Plan recognizes. While this industry surely would like to be immune from climate change regulation, with all due respect to Mr. Potts, I believe we are fortunate that his view that the EPA’s authority in this area is limited or constrained is not grounded in the law.

Ann Brewster Weeks is Senior Counsel, Clean Air Task Force, Boston, Massachusetts.