Last month, the coal companies fighting President Obama’s climate agenda got some really good news. The names of a randomly selected three-judge panel were released in a case called Murray Energy Corp. v. EPA, which is currently pending in the D.C. Circuit Court of Appeals. Former President George W. Bush appointed two of the three judges on the panel, Brett Kavanaugh and Thomas Griffith, and his father appointed the third, Karen Henderson.
Why was this such good news for the coal industry? Because these three conservative-leaning judges now have the power to determine the fate of the EPA’s most important rule ever – the Clean Power Plan – which is the centerpiece of the President’s climate agenda. The Plan represents the biggest step the Administration has taken to address climate change, requiring existing power plants to reduce their carbon dioxide emissions by 30% from 2005 levels by 2030.
Oral arguments in the case are today, with a decision to come soon after. Two of the three judges on the panel, Kavanaugh and Griffith, have regularly been thorns in the EPA’s side: In 2012, the two overturned the EPA’s Cross-State Air Pollution Rule, and that same year, Judge Kavanaugh filed a dissent in a separate case arguing that greenhouse gases are not air pollutants. If just two of the three conservative-leaning judges side with the challengers, the court will halt the EPA’s proposed Plan in its tracks.
That’s why we think the EPA should consider taking drastic action now to moot the case before the court can issue a decision. Here's how it would work.
The primary legal issue before the D.C. Circuit is whether the EPA has any statutory authority to issue its Clean Power Plan. Ironically, the Plan's greatest obstacle is another EPA rule—the Mercury and Air Toxics Standard—which is itself the subject of a lawsuit pending before the U.S. Supreme Court. The EPA’s mercury rule imposes the first federal limits on emissions of mercury and other hazardous air pollutants from the nation’s power plants. Several states and industry groups are challenging the mercury rule on the grounds that the EPA misinterpreted the Clean Air Act and failed to adequately consider the rule’s costs.
In an odd twist of fate, it's the very existence of this mercury rule that could prevent the EPA from issuing its Clean Power Plan. This is because the EPA is using a fairly obscure provision of the Clean Air Act—section 111(d)—to issue the Plan, and it is unclear whether this section allows the EPA to regulate both mercury and carbon dioxide from existing power plants.
Numerous legal scholars have spent the last year debating this issue. Just last month, liberal-leaning Harvard law professors Jody Freeman and Richard Lazarus acknowledged that this question presents a “novel and, even hard legal issue.” Indeed, given the conservative makeup of the D.C. Circuit panel, the question of whether the EPA can regulate mercury and carbon dioxide using section 111(d) presents a very real threat to the Clean Power Plan, which is why we think the EPA should seriously consider doing something that would otherwise be unthinkable: concede defeat on the mercury rule before the U.S. Supreme Court and acknowledge that it should have considered the mercury rule’s costs.
While what we are proposing might sound extreme, it would eliminate the single greatest obstacle to implementing the Clean Power Plan—which is no small triumph. And it would gut the challengers’ only potentially viable claim in the D.C. Circuit. With the mercury rule no longer in effect, the EPA wouldn’t have to worry about whether it could simultaneously regulate mercury and carbon dioxide emissions—it would only be regulating one of them.
Agreeing to reconsider the mercury rule would also have little—if any—detrimental impact on the environment. The mercury rule has been in place since 2011, and approximately 90 percent of the pollution controls needed to comply with it have already been installed. Numerous utility executives have gone on record saying that they will not change their plans to install controls or shutter their coal plants, even if the Supreme Court were to overturn the rule.
To top it off, caving in the Supreme Court case won’t necessarily end the EPA’s plans to regulate mercury from power plants. The EPA can always choose to re-issue its mercury rule in a year or two after considering its costs. And by the time this happens, the EPA will have already finalized its Clean Power Plan.
If the D.C. Circuit strikes down the Clean Power Plan, the consequences could be catastrophic for the Administration's climate agenda. Even if the D.C. Circuit’s decision is immediately appealed to the Supreme Court, the high-court may or may not agree to take the case (and if they do take it, they won’t issue a decision for at least another nine months to a year). In the meantime, a negative ruling in the D.C. Circuit would cast significant doubt as to the legal soundness of the Plan, and would also hamper U.S. efforts to advance international climate negotiations, including at the U.N. Climate Change Conference in Paris later this year (since, after all, the Plan is the President’s best evidence that the U.S. is moving forward with climate regulation).
What we are proposing would undoubtedly be an unusual move. But if the Obama Administration is really serious about its climate agenda, then it should consider scrapping its mercury rule to protect its Clean Power Plan.