Big Carbon and Pollution News You Should be Aware of

The US Supreme Court today dealt two blows to the utility industry, so to speak, and probably to the Bush Administration as well.

First, they ruled that the EPA has the authority already in existence for regulating carbon emissions on new motor vehicles. This means for the first time that the EPA can, with no new legislation, have a clear path to putting restrictions on greenhouse gases for a major part of the US economy. And from my own and my lawyer’s readings of the decision, this decision is very easily extensible to effect power plants, industrial sources - and even your home furnace and barbecue grill, for that matter.

The second decision here shoots down an argument that Duke Energy was making (and TVA for that matter), which is essentially that if a power plant reduces its hourly emissions, it should be able to increase its annual emissions so long as the net increase on a per-MWh basis is lower. That is, if a power plant reduces its emissions of Pollutant X from, say 1 per MWh to 0.8 per MWh - but also extends the time it operates over the year such that there are more MWh, then it would be in violation. I’ve argued in favour of the utilities on this point because I could use the potential benefit of an increased net capacity factor and improved dispatch curve position as a selling point to convince utilities to upgrade their emissions controls sooner, rather than waiting for the law to force them. However, the USSC says I’m wrong, and that’s she wrote (although I think Duke as an individual entity has grounds for appeal as the USSC says in their decision). The full decision is here:

What’s the short of this? First, an Administration so inclined has much fewer obstacles to ordering the EPA to start regulating carbon and greenhouse gas emissions for portions of the economy. And second, existing power plants are not going to be able to bump up their capacity to meet with demand by adding halfway emissions controls efforts, which either means they will not upgrade (which means, more natural gas generation and more $$$ on your utility bill) or they will have to meet full New Source regulations (which means, more $$$ on your utility bill). And, possibly, a cleaner environment, to some extent.

I was about to post about this. Here are my questions:

  1. Is it possible that one downside of this decision is that it makes it more likely that a command and control solution will be used instead of smarter market solutions? I think it’s been pretty well established that correctly structured permit programs are both more effective and more efficient at reducing pollution levels. This is especially true for problems like greenhouse gases, where there is little danger of so-called “hot spots.”

  2. What consequences will the easing of standing requirements have? I could be wrong, but it seems to me that the majority opinion eases the standing requirements from where they were in *Lujan *and later cases. It seems like this will make it easier for plaintiffs to get into court on similar issues. Is this good? Bad?

One thing this may help (or hurt, depending on your stance) is a easing the way for nuclear power, as a zero carbon emission way to produce energy.

I don’t know that it changes that aspect of it; I think a cap and trade system is perfectly viable under this decision.

While not a legal scholar myself and so I won’t comment directly, my lawyer claims that this could end up with the courts being hit with a huge flood of (what he terms) “nuisance” lawsuits funded by environmental groups. He does not like what he calls a “corruption of Article III”, and claims that Roberts supports him in his dissent (which I confess I’ve not had time to read at work here).

This sounds like good news to me. It sounds like it will hand the next President a stronger tool for reducing Carbon Emissions. If this allows the EPA to move up the MPG requirements and reduce the Emission, it sound great.

As I already have accepted that energy prices have to go up and will go up, what is the downside to this decision? It is over my head **Una ** and I hope you can further reduce my ignorance. What will it take to get the power industry to start building more ‘clean’ Coal Plants and Nuclear plants?


I think a market solution would not rely on the ability of the EPA to be able to declare CO2 an “air pollutant” under the Clean Air Act. Now that the EPA has that ability, a command and control door is opened where previously the only option might have been a Congressional approach with industry cooperation.

While a permit system is certainly still viable, I think that this decision makes it politically less likely. It is somewhat easier for EPA and state actors to issue command regulations because they hide the cost of the regulation from the public. It seems like more of an environmental victory than a permit system. Environmental groups also seem to be more likely to lobby for command and control regulation since it gives them a greater role in the enforcement. So opening the door for these groups to force EPA rulemaking seems like it will make command and control regulation more probable.

Yeah, I’m not sure it would be right to characterize them as “nuisance” suits, but it does seem to open the door to more suits. And not just from environmental groups.

I can see the importance of the decision, but I have an ignorant question or two. I’m recovering from cataract surgery, so I may have missed a lot in the Cornell material. I’ll see clearly soon, but things are foggy now.

Does the court say the EPA has the authority to regulate carbon emissions from autos, or does it say the EPA has and must use the authority?

If today’s EPA folks are hostile to the concept of restricting carbon emissions, are they free to do nothing, or to call for voluntary self-regulation?

Thank you.

From the opinion:

It could limit the building of new clean coal power plants, because it could require carbon capture/sequestration technology as a BACT. However, given the results of an international study I just participated in, I still think that clean coal even with 90% carbon capture and sequestration will be highly economically competitive with natural gas.

The Duke decision will limit the expansion and upgrade of existing coal power plants, and could accelerate shut-downs of several marginal plants. Without naming names, I can think of a handful just off the top of my head which may shut down because of the Duke decision. I’m guessing that people in the upper NE region of the country will see the most impact from this.

It should give a whole new emphasis to new nuclear power plants.

What’s the downside? It’s difficult to say. I guess the fairest thing to say is that it forces the issue somewhat on carbon and other GHG emissions regulations, and could raise the cost of electricity. If you already accept that electricity prices must increase to capture or avoid pollution, then the net effect is really the potential for a faster path to GHG limits, or even reductions. There may also be net legal effects, as noted earlier in this thread, which I’m not qualified to speak on.

Richard Parker:

My reading of the majority opinion is that is places an extra-special emphasis on the fact that one of the litigants was a state. So I’m not sure how many additional lawsuits this is likely to open the door to, unless states are also parties to those suits.

I think that’s right. But the court also emphasized that if you have a procedural right to redress (which I think includes more than just states), you don’t have to meet some of the normal requirements for standing (redressability, immediacy, etc.). I’m sure the majority would argue that this was already part of the court’s jurisprudence, but it seemed like a bit of an expansion to me.

Can you find me a quick pincite for this statement within the opinion? I’d be interested to see it. My judge wrote an opinion a little while ago which relied in part on the Supreme Court’s prior admonition that the requirement of redressability might be relaxed in a procedural standing case, but that it’s never wholly eliminated—being, as it is, one of standing’s “irreducible elements.”

Here it is:

So I guess the question is whether “all the normal standards” can be done away with entirely, or just relaxed. Interesting. Thanks.

The resolution of that question by the D.C. Circuit, incidentally, will determine whether my judge’s opinion gets affirmed or reversed. :slight_smile:

I was surprised to read that the major automakers are among the groups that want the EPA to regulate CO[sub]2[/sub] emmissions. Apparently, the automakers figure that having the EPA regulate them will be better than letting Congress enact some law that is tailored to please environmentalists, and much much much better than having each state enact its own standards.

Interesting politics at work here.