111(d) author says Clean Air Act ‘not the best way’ to curb emissions

Source: Elizabeth Harball, E&E reporter • Posted: Monday, October 19, 2015

A key figure behind the Clean Air Act provision being used by U.S. EPA to regulate the power sector’s carbon emissions yesterday said an economywide cap-and-trade system proposed in 2009 would have been a less costly way to curb America’s greenhouse gas output than the statute he wrote.

Robert Nordhaus, now a partner with Van Ness Feldman LLP, was in 1970 a legislative draftsman in the House Office of the Legislative Counsel. Nordhaus was assigned to write the 1970 amendments to the Clean Air Act, one of which became Section 111(d) — the provision underpinning the Obama administration’s Clean Power Plan, a sweeping regulation aimed at reducing the United States’ CO2 emissions 32 percent by 2030.

At an event hosted by the think tank Resources for the Future in Washington, D.C., Nordhaus indicated that the “American Clean Energy and Security Act of 2009,” known as the Waxman-Markey cap-and-trade bill, would have been a further-reaching and more economically sensible alternative to the Clean Power Plan.

“Regulation of greenhouse gases under the Clean Air Act is not preordained by some divine power, but it’s a policy choice that became necessary once what I would regard as a more administrable, efficient and less costly program … to control these gases failed in the Senate,” Nordhaus said.

Nordhaus, who later served as general counsel to both the Federal Energy Regulatory Commission and the Department of Energy, added that the Clean Power Plan only regulates CO2 from power plants, leaving a significant percentage of U.S. emissions from sectors like transportation and manufacturing to be regulated through other mechanisms.

“You’re looking at a program that can’t reach all of the emissions, and one that reaches them in a way that’s not necessarily economically efficient,” Nordhaus said, explaining that an economywide carbon-trading program involving emissions beyond power plants is impossible under the Clean Air Act.

While EPA is encouraging interstate trading within the power sector as a compliance method under the Clean Power Plan, Nordhaus emphasized that there is “no guarantee” that all states will choose this method.

“If you look at the Clean Air Act as a regulatory mechanism, it’s what we’ve got; it can reach a significant proportion of our greenhouse gas emissions, but stepping back, it’s not the best way to do it,” he said.

A ‘forward-looking’ statute?

Once the final Clean Power Plan rule is published in the Federal Register, EPA will face litigation challenging its authority under the Clean Air Act to limit CO2 emissions from power plants. One question sure to be raised in those lawsuits is what Congress intended when it wrote and amended the law.

Congress amended the Clean Air Act again in 1990, and court battles are likely to center around conflicting changes enacted that year by the House and the Senate. The dispute revolves around whether EPA is forbidden from issuing duplicative regulations for an emission source — in this case, power plants — or a specific pollutant. EPA has already regulated power plants under Section 112 of the law, but it has not regulated carbon emissions.

Lisa Heinzerling, an administrative law expert and professor at Georgetown University Law Center, said at an event in D.C. earlier this week that EPA should be on firm ground as long as the agency explains its reasoning and how it interpreted that ambiguity in the law while also reaching out to affected stakeholders.

Jeff Holmstead, an industry lawyer with Bracewell & Giuliani, disagreed and said EPA’s rule is contrary to the statute. He believes the courts will find that Congress never intended to entrust such a high level of regulatory reach to the agency.

But Heinzerling said court decisions won’t be based on whether Congress intended to give EPA certain powers but rather whether EPA made a permissible interpretation of the statute.

Nordhaus said that although global warming likely wasn’t on the minds of lawmakers working on the Clean Air Act in 1970, they were aware that the science of air pollutants was still evolving and 111(d) was written to account for this issue.

“Did Congress intend to regulate greenhouse gases in 1970? Well, I would say probably not,” Nordhaus said. “But the Clean Air Act in 1970 was really designed not to deal only with the problems they knew about in 1970. What they knew about air pollution and how to control it in 1970 was pretty limited.

“They had no idea exactly how they were going to do what they had to do then, much less what they would ultimately have to do over the years as emissions increased, as the economy grew and as we had better knowledge on air pollution science,” he added. “The statute itself, in my view anyways, was really designed to be forward-looking.”

But Nordhaus also acknowledged that 111(d)’s authority has grown into something policymakers in 1970 may not have imagined at the time.

“I think nobody really looked at it seriously for many years because it was not clear at that time what pollutants would fall into this tiny little gap — what we thought was a tiny little gap,” he said.

Reporter Emily Holden contributed.