This summer, the Environmental Protection Agency (“EPA”) is expected to promulgate the final version of its Clean Power Plan, a set of regulations aimed at decreasing the carbon dioxide (“CO2”) emissions of U.S. power plants to 30% below 2005 levels over the next 15 years. Critics have argued that the plan oversteps the bounds of EPA’s power to regulate air pollution. In this two-part post, David Baake ’14, a former editor and writer for ELR, argues that the Clean Power Plan is well within EPA’s regulatory authority. This is the second part, addressing the contention that § 111(d) of the Clean Air Act (42 U.S.C. § 7411), which gives authority for the Clean Power Plan, was not intended to give rise to any regulations of such a sweeping nature: the “elephant in a mousehole” argument. You can read the first part here.
Opponents of the Clean Power Plan have attempted to characterize § 111(d) as an insignificant provision that was not designed to support a major regulatory initiative; in more colorful terms, an attempt to fit a regulatory “elephant” into a statutory “mousehole.” In support of this characterization, the Plan’s opponents note that EPA has established § 111(d) emission guidelines for only four pollutants from five source categories over the last forty years (79 F.R. 34,830, 34,844). While the precise contours of this argument remain unclear, the suggestion seems to be that the scant historical use of § 111(d) is evidence that this provision must be construed narrowly, perhaps by limiting EPA’s ability to consider measures like renewable energy and energy efficiency that are implemented “beyond the fenceline” of the facility containing the regulated source.
The problems with this argument begin with the statutory text. § 111(d) delegates in expansive terms, providing that EPA “shall” establish emission guidelines reflecting the best “system” of emission reduction for “any” existing source that emits “any” air pollutant not controlled under the national ambient air quality standards (NAAQS) program or the hazardous air pollutant (HAP) program. § 111(d)(1) and (2) further provide that these emission guidelines will be implemented by state and federal plans similar to those required by § 110, the centerpiece of the Clean Air Act’s most significant regulatory program. Under § 110(a)(2)(A) and (y), these plans may incorporate a wide range of pollution control measures, means, and techniques, including “economic incentives, such as marketable permits or auctions of emissions allowances.” Congress’s decision to delegate in expansive terms and to model the § 111(d) program on § 110’s NAAQS attainment program indicate that it intended for § 111(d) to provide EPA with significant regulatory authority.
The structure of the Clean Air Act confirms that § 111(d) is not a mousehole, but an essential component of the Act’s comprehensive framework for controlling existing source emissions. The report on one Senate version of the Clean Air Act noted that the drafters sought to establish a regulatory framework with “no gaps” in its coverage of existing source emissions. Reflecting its understanding that there were “three general categories” of air pollutants, Congress enacted three different programs to control existing source emissions. As EPA explained it (subscription only), the NAAQS program (CAA §§ 108–10) was designed to control emissions of air pollutants known to affect ambient air quality, the HAP program (CAA § 112) was designed to control emissions of air pollutants known to cause the most severe health effects, and § 111(d) was designed to control all other dangerous air pollutants. The scant historical use of § 111(d) does not indicate that the provision is insignificant; it simply reflects the fact that every major air pollution problem EPA has previously encountered could be adequately addressed under the NAAQS or HAP programs (this has been pointed out in an article by Nordhaus and Gutherz).
The statutory context provides additional evidence that Congress understood § 111(d) to be a significant delegation of regulatory authority. § 317, enacted in 1977, requires EPA to perform an economic impact assessment before promulgating or revising regulations under seven provisions of the Clean Air Act, including “any regulation under § 11(d).” An assessment under this provision must contain an analysis of, inter alia, “the potential inflationary or recessionary effects of the standard or regulation,” “the effects on competition of the standard or regulation with respect to small business,” “the effects of the standard or regulation on consumer cost,” and “the effects of the standard or regulation on energy use.” The fact that Congress required EPA to study the macro-economic effects of § 111(d) regulations indicates that Congress understood that this statute was no mousehole.
The text, structure, and statutory context all point to one conclusion: § 111(d) is a major grant of regulatory authority, and the Clean Power Plan fits well the overall design. If the Plan is an elephant, then § 111(d) is a circus train.