Obama’s Clean Power Plan: wounded, not dead yet

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US Supreme Court (photo Matt Wade)

US Supreme Court (photo Matt Wade)

The US Supreme Court has issued a judicial stay of President Obama’s Clean Power Plan (CPP).  Scott Fulton, former General Counsel of the US Environmental Protection Agency (EPA) and current President of the Environmental Law Institute, explains the ramifications of this decision for US and international climate efforts, in an interview with Talia Fox, fellow of the Clean Energy Leadership Institute, “This will raise questions in the minds of other countries”, says Fulton. But he adds that it would be premature to conclude that the Clean Power Plan is dead.

The decision of the Supreme Court to issued a judicial stay of President Obama’s signature climate change policy instrument, the Clean Power Plan (CPP), halts further implementation of the proposed restrictions on carbon emissions from fossil fuel-fired electric generating units until completion of the expedited, 27-state challenge pending before the DC Circuit Court. While opponents of the CPP are cheering the decision as an indication of the Plan’s ultimate demise, environmentalist and clean energy advocates are concerned about further delays in action to address climate change, as well as the international implications of the decision, given the US’s leadership in the recent COP 21 Agreement in Paris.

What does the stay mean, practically speaking? How will this affect the timeline for the CPP and the corresponding state plans? How concerned should the environmental community—and the clean energy community—be? And what impact does the tragic death last week of Justice Antonin Scalia, the Supreme Court’s conservative champion, have on the CPP’s prospects?

The Court says stunningly little in its order, given the domestic and international significance of its action

For a legal perspective on these and other questions, I sat down with Scott Fulton, former US EPA General Counsel during the first Obama Administration and current President of the Environmental Law Institute.

Talia (T): For those reading this who may not have a legal background, could you break down what happened in the US Supreme Court’s decision to stay the Clean Power Plan?

Scott (S): When an agency promulgates a regulation, that regulation can be challenged in court through a petition for review. Petitions for review of EPA regulations under the Clean Air Act have to be heard by the DC Circuit Court of Appeals, and the DC Circuit Court of Appeals decisions are then potentially reviewable by the US Supreme Court. In the course of rulemaking litigation, there’s always the question of the legal effect of the rule pending completion of the challenge to the rule. What a motion for stay intends to accomplish is halt compliance with the rule until the courts have considered its legal merits and subsequently issue a decision. Here, a motion for stay pending appeal was filed in the DC Circuit, and the DC Circuit about a month ago ruled against the motion, holding that the rule should not be stayed, based on the legal criteria for issuing a stay.

T: What criteria might cause a court to issue a stay?

S: A stay is considered extraordinary relief that requires the proponent to prove a number of things:

  1. likelihood of success on the merits, that is, the person trying to get the stay has to make a preliminary proving that their arguments are strong and will likely succeed;
  2. the presence of irreparable harm—that [the petitioners] are going to be harmed or damaged in some significant way if the court doesn’t stay the matter; and
  3. that the issuance of the stay would be in the public interest.

The DC Circuit looked at the assertions of the movers on the motion to stay and concluded that they didn’t satisfy the factors for the issuance of the stay.

A year’s delay or better puts the fate of the rule to some degree in the hands of the next White House

T: How did this issue get to the Supreme Court? What happened when it got there?

S: The parties who filed the stay motion took the extraordinary step of asking the Supreme Court to stay the matter despite the DC circuit’s decision. This is a very unusual request, and it is unprecedented for the court to entertain such a request, because we’re at a very early stage of the litigation. The Court nonetheless decided to entertain—and grant—the motion to stay, essentially disagreeing with the DC Circuit’s conclusion.

The Court says stunningly little in its order, given the domestic and international significance of its action. There’s no analysis to indicate why the Court thought a stay was appropriate. Were the dynamics associated with states needing to continue working on their plans to implement the CPP pending appeal on the Court’s mind? Was it concerned that lasting changes would be made in the power sector before the rule’s legal viability had been established? Was the Court persuaded that the rule was flawed? If so, was the flaw a manageable one or a foundational one? We don’t know and are left to speculate.

Now you could look at this and say, in order to issue a stay, you have to find 1, 2, and 3. Therefore, we might assume that the Court must be signaling, among other things, that it thought there was a likelihood that the petitioners would ultimately win on at least one of the arguments. But there are many issues in the case, some of which are foundational and some of which are not. At bottom, there is not much to go on in terms of what was animating the Court.

T: What does this mean for the timeline of the final rule in your estimation?

S: Implementation here all plays out in the hands of the states or, in the absence of state plans, under a federal implementation plan. So if the impetus for action by the states pending appeal is removed, then some state planning may slide during the stay.

The rule is now back before the DC Circuit for review on the merits. If the DC Circuit finds a problem with the rule and sends it back to the EPA, then you’ve got another loop that has to take place before the rule in revised form could makes its way back to the Supreme Court. Assuming that the stay would remain until the rule’s fate is finally determined, we’re probably looking at a minimum delay of around a year (under a scenario in which the DC Circuit and Supreme Court both uphold the rule in its current form) and a maximum delay of several years. Of course, a year’s delay or better puts the fate of the rule to some degree in the hands of the next White House.

T: Couldn’t you argue that the states that are already introducing plans would have done so anyway? And that the states opposed are not making those plans in the first place? Or do you think that those state plans were in the works and now will be stalled?

S: For the states that were intending to do something here, there really is no reason to slow down, although we could find that the political dynamic for some of them changes to a degree. It can be easier for states to be progressive on an issue like this if there is an outside driver. Some state officials have probably been able to persuade their legislators or other forces within their government that it is better to move forward with a plan than to wait and have the EPA default plan kick in. This kind of leveraging is not uncommon.

This will raise questions in the minds of other countries, and in fact already is

Some states, including some of those who are challenging the rule, are likely working on parallel tracks, fighting the rule but at the same time quietly trying to figure out what it would take to comply. The second of these parallel tracks could be affected by the stay decision, not just because there’s a delay—but also because there’s a suggestion in what the Court has done that it sees the rule as vulnerable, at least in some respect. So the decision may encourage a wait-and-see approach on the part of some.

T: What does this mean for the international community? Could it affect the US clean energy targets put forth in its Intended Nationally Determined Contribution (INDC)?

S: It depends on the extent of the delay, but because we’re dealing with a fairly long time horizon—2030—this decision alone may not be that impactful. If the rule is ultimately overturned, then that’s a different story, but that depends on which parts of the rule are found problematic and whether EPA can easily address the concerns, whether the courts do something that meaningfully limits the ambition of the rule, etc.

T: Do you think it could jeopardize the United States’ acceptance of the Paris Agreement this coming April?

S: I’m guessing not. The State Department has already indicated that it does not plan to seek Senate advice and consent for the agreement because, among other things, the INDCs under the agreement are not binding and authority exists to fulfill US involvement under the Agreement without legislative action. The fact that the Supreme Court has stayed the effect of the rule as currently constituted would not appear to call those suppositions into question or change that calculus.

T: Could this decision undermine the US’s role as a leader in climate change negotiations, in terms of other countries’ participation?

S: It will raise questions in the minds of other countries, and in fact already is. For those countries that have their own internal struggles about whether they will accept or ratify the Agreement, it could present some difficulties. But, again, it would be premature to conclude that this decision puts the US INDC at significant risk.

T: Some experts are saying that this decision could unravel the negotiations that took place in Paris…

S: I think that’s overstating where we are. This stay decision is a part of the US lawmaking process; other countries may encounter their own bumps in the road as they develop programs for meeting their INDCs. This development is not a fatal to the US meeting its INDC; we’ll know more when the rule is reviewed on the merits, which is the next step.

T: How concerned should we really be? Is this as ominous as much of the environmental community and clean energy advocates are saying?  What does Justice Scalia’s tragic death bring to the equation?

S: I think it’s best to be measured about this and not to overreact. It’s important not to forget that the Supreme Court just a few years ago recognized EPA’s authority to regulate greenhouse gases under the very section of the [Clean Air Act], section 111, upon which the CPP is based. I doubt the courts will undercut that earlier decision, and rather think it’s more likely that any concerns will be registered in a way that puts the rule on the path of constructive adjustment, the way that many rulemaking challenges evolve, with the courts identifying problems and sending it back to the Agency to address the problems, with a rule ultimately emerging that passes judicial muster.

The shift towards clean energy is well underway and has a good deal of momentum behind it

Regarding Justice Scalia, first let’s honor the man. He has been a stalwart on the Court for decades and has served his country with distinction; he will be greatly missed. In terms of the CPP, apart from leaving the Court without the sharp analytical mind of one of the Court’s most iconic conservative justices, his absence leaves the Court with 8 justices and the potential for a 4-4 split in a decision on the merits of the CPP. In that event, the ruling of the DC Circuit would stand. This means that the DC Circuit’s decision on the merits could well be the decision to watch now and that whatever concerns may have been behind the stay decision may not determine the CPP’s fate.

T: What does this mean, in your opinion, for the future of clean energy?

The shift towards clean energy is well underway and has a good deal of momentum behind it. Comparative cost and consumer choice are also big drivers, and, in my view, this stay decision by the Supreme Court will not likely affect the trend line in a meaningful way.

Editor’s Note

Talia Fox is a Research Associate at the Environmental Law Institute (ELI). She is a Fellow with the Clean Energy Leadership Institute (CELI). She would like to thank Scott Fulton and members of the CELI community for their contribution to this piece.

Scott Fulton is the President of the Environmental Law Institute. From 2009 to January 2013, Mr. Fulton served as General Counsel of the US EPA, where he handled or directed some of the US’s most significant environmental legal matters and represented the US government in international meetings and negotiations. Among his many accomplishments at EPA was his lead role in creating the legal framework for the US’s initial program for regulating greenhouse gas emissions.

This article was first published on The Energy Collective and is republished here with permission.

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