The Supreme Court’s Clean Power Plan missteps

Shocking both its proponents and opponents, the Supreme Court issued an order on February 9 staying the Clean Power Plan (CPP), which requires the U.S. power sector to make deep reductions in emissions of greenhouse gases (GHGs). The immediate effect of the stay will be to halt enforcement of the CPP while the courts conduct a full review of its validity under the Clean Air Act (CAA). This process could take 18 months or longer. As a result, the fate of the CPP—the centerpiece of the Obama administration’s climate change strategy—will be in limbo for the remainder of the president’s term and, in all likelihood, well into that of his successor. 

Reuters/Joshua Roberts – man uses a sweeper to clear snow from in front of the Supreme Court after a major winter storm swept over Washington, DC

By issuing the stay, the court abandoned principles of judicial restraint and recklessly reached out to block the Obama Administration’s flagship environmental initiative without explaining why it took this extreme step. Although a setback to the EPA and a shot across the bow by justices hostile to the CPP, the stay’s actual impact will be limited and temporary.  The D.C. Circuit Court of Appeals may uphold the CPP and a divided Supreme Court could well affirm that decision. Implementation of the CPP would then resume with minimal delay. Even if the CPP is struck down, power plant GHG emissions will continue to decline as the electricity sector moves away from coal and renewables capture larger market share. Granted, rejection of the CPP would complicate the task of policymakers, but a number of useful tools to curb GHG emissions will remain available under existing law and leadership states like California and New York will likely redouble their efforts to address climate change.

Applying the traditional stay criteria

Normally, stay requests are the domain of the courts of appeals, which review challenges to agency regulations before the Supreme Court decides whether to enter the fray. Following this path, petitions to review the CPP and accompanying stay requests were filed with the Court of Appeals for the D.C. Circuit last fall. That court denied a stay on January 21, concluding that the CPP challengers “had failed to satisfy the stringent requirements” for a stay, and set an expedited schedule for reviewing the CPP on the merits. For the Supreme Court to intervene after the lower court had denied a stay and without waiting for it to examine the legality of the CPP is unprecedented, yet its brief order provides no rationale for this extraordinary step.

The four justices appointed by Democratic presidents dissented from the stay order, mirroring the sharp partisan divisions around the CPP in Congress and the nation’s statehouses. The stark split between the court’s liberal and conservative factions, coupled with the majority’s failure to explain its decision, has prompted speculation that the stay was more influenced by politics than by careful legal analysis.

Showing irreparable injury

Stays of agency action are rare because, in the absence of full judicial review, the courts are reluctant to second-guess executive branch decisions unless there will be substantial irreparable harm to affected parties and the government has failed to provide convincing reasons for proceeding with regulation. Many observers felt that states and industry had made weak showings of irreparable harm because compliance with the CPP is not required until 2022 and the CPP’s earlier planning deadlines are merely administrative and do not impose significant obligations on states or utilities.

While CPP opponents claimed that some coal-fired power plants would be retired in anticipation of CPP restrictions and that states would in fact expend significant resources on compliance planning, these arguments were strained and speculative. Many coal plants have been shuttered already and others were earmarked for retirement before the CPP became final last fall. More will undoubtedly close in the next few years but how much these closures will be driven by the CPP and when they will occur are matters of guesswork. The CPP’s planning deadlines hardly force immediate action by states and power companies:  the first CPP deadline—September 16, 2016—is simply for requesting more time to develop state plans. The plans themselves are not due until September 16, 2018, by which time the pending court cases should be resolved.

Although a setback to the EPA and a shot across the bow by justices hostile to the CPP, the stay’s actual impact will be limited and temporary.

It’s impossible to know how—if at all—the court majority weighed these considerations. Perversely, the majority could have turned the government’s argument on its head, reasoning that a stay would not be harmful precisely because the CPP’s compliance dates are so distant. But this logic would be a radical departure from the traditional standards for a stay, which put the burden on those challenging regulations to demonstrate irreversible harm if they are implemented.

U.S. international standing

The government argued that a stay would be harmful because it would call into question the executive branch’s ability to deliver on the emission reduction commitments it had made at the recent Paris climate talks (COP21) and weaken support for global action on climate change, an Obama administration priority. These considerations should have carried significant weight. Perhaps the majority downplayed them on the ground that any harm to U.S. diplomacy would be short-lived if the CPP is ultimately upheld and, if it is not, the U.S. diplomatic posture would need to be revisited anyway. If this was the majority’s reasoning, it ignores the tangible near-term damage to U.S. credibility and the inevitable loss of momentum in implementing the Paris agreement resulting from global uncertainty over U.S. climate policy.

Will the CPP ultimately be upheld?

An essential factor in considering a stay request is whether the applicants have made a strong case on the merits of their challenge to the agency regulation. Although the court’s order is silent on this issue, it’s likely that at least some members of the majority were deeply troubled by the claimed legal deficiencies of the CPP.  These concerns would not have justified a stay in the absence of irreparable injury but do suggest that the government may face an uphill battle in defending the CPP before the Court on the merits.

Reuters/Ayesha Rascoe – The American Electric Power Company’s cooling tower at their Mountaineer plant is shown in New Haven, West Virginia

In recent terms, the court has been unusually proactive in accepting challenges to EPA Clean Air Act rules. The EPA has largely avoided major setbacks in these cases, but the sharply worded opinions of Justice Scalia, joined by Justices Alito and Thomas, have accused the EPA of “overreaching” interpretations of the law that supposedly distort congressional intent in order to justify sweeping regulation of the economy. It’s not surprising that these three justices would be hostile to the CPP and would seize upon the stay as a means to vent their displeasure, even at the expense of the traditional restraints on Supreme Court interference in the regulatory process.   

It’s virtually certain that Justices Alito, Scalia and Thomas will vote to strike down the CPP when the court hears the merits of the challenges to the rule. But can we be similarly confident about the views of the two other members of the majority, Justice Kennedy and Chief Justice Roberts?  They have been notably silent in recent decisions involving the CAA. They may have qualms about weakening long-standing principles of deference to agency interpretations of ambiguous statutory language. And Justice Kennedy was in the majority in Massachusetts v EPA, the groundbreaking 2007 decision that recognized the application of the CAA to climate change and pushed the EPA to use its authority to regulate GHG emissions from motor vehicles. He may feel that striking down the CPP would be backtracking on Massachusetts by making it impossible for the EPA to use the tools that that the court provided in 2007

It’s not implausible that either or both justices would join the court’s liberal wing in upholding the CPP. They may have supported a stay to show solidarity with their conservative colleagues but believed that they could undo any harm by later voting to uphold the CPP on the merits. If the D.C. Circuit, which will hear arguments on June 2, issues a strong opinion affirming the CPP, these undecided justices might be persuaded to follow suit. 

The concrete impact of the stay 

Despite the EPA’s vow to continue working on CPP compliance planning, the 27 states that sued to stop the CPP are virtually certain to disengage from that process since the stay removes any legal compulsion to meet the CPP’s planning deadlines. While frustrating to the EPA, this will not be a fatal blow to the CPP if it is later upheld because states would again be on the hook for implementation and the EPA would likely resist a major extension of the compliance deadlines. States that did not challenge the CPP may also be unenthusiastic about further compliance planning, but are likely to redouble their efforts to reduce GHG emissions under their own laws. Outspoken governors—like Jerry Brown of California, Andrew Cuomo of New York and Jay Inslee of Washington—will likely see the stay as a challenge to their leadership and an additional reason to press forward with aggressive initiatives to curb emissions. 

It’s virtually certain that Justices Alito, Scalia and Thomas will vote to strike down the CPP when the court hears the merits of the challenges to the rule. But can we be similarly confident about the views of the two other members of the majority, Justice Kennedy and Chief Justice Roberts?

The stay will be unlikely to slow the momentum toward lower GHG emissions in the power sector. These emissions have been on a downward trajectory for nearly a decade and roughly half of the reductions targeted by the CPP have already occurred. The shift away from coal as a fuel source has been driven mainly by the low price and abundant availability of natural gas and the large costs required to implement emission controls for conventional (non-GHG) pollutants. The Energy Information Agency (EIA) and other experts have predicted further coal plant retirements independent of the CPP. And both coal and natural gas have been under pressure from rising market penetration of wind and solar, which have advanced dramatically with improvements in technology, reductions in cost and lowering of regulatory barriers. Congress’ recent decision to extend tax credits for wind and solar will complement these trends and accelerate the replacement of fossil energy sources by non-emitting renewables.  

At some point, the pace of emission reductions in the power sector may slow in the absence of the CPP. But sheer economics and other government policies are now decarbonizing power generation and will continue to exert a strong influence even if the CPP is declared invalid. Those who believe that coal will return to dominance if the CPP vanishes are engaging in wishful thinking. The likelihood is that, even without the CPP, power plant emissions will be much lower in 2030 than they are today.

The path forward under existing law

Of course, apart from its actual impact on emissions, the CPP has played an important symbolic role in demonstrating U.S. political will to address climate change and our ability to make progress despite the lack of new authority from Congress.  Loss of the CPP will inevitably create deep doubts internationally about U.S. staying power and credibility even if emissions continue to fall.

However, the administration has many irons in the fire separate from the CPP, including an aggressive program to reduce methane emissions, elimination of refrigerants with high global warming potential, ongoing rulemaking at the Department of Energy to set tighter efficiency standards for appliances and other products, and regulatory and non-regulatory initiatives to lower GHG emissions from light- and heavy-duty vehicles. It may even turn out that section 115 of the CAA, hitherto largely ignored, offers opportunities to achieve economy-wide emission reductions that could be defended legally even if the CPP fails to pass muster.

Reuters/Jim Urquhart – Steam rises from the stakes of the coal-fired Jim Bridger Power Plant supplied by the neighboring Jim Bridger mine that is owned by energy firm PacifiCorp and the Idaho Power Company, outside Point of the Rocks, Wyoming

While unfortunate, the Supreme Court stay of the CPP is only one piece of the complex U.S. climate puzzle. The D.C. Circuit and Supreme Court may yet uphold the CPP, enabling it to get back on track.   But even without the CPP, continued emission reductions coupled with the tools remaining available to the executive branch, ongoing state leadership and rising public concern will provide a viable path forward for U.S. climate policy. 

Bob Sussman served in the Obama administration during 2009-2013 as co-chair of the Transition Team for the EPA and then as senior policy counsel to the EPA administrator. He was a senior fellow at the Center for American Progress in 2008, writing and speaking about climate change and energy. In 2007 he retired as a partner at Latham & Watkins. He previously served in the Clinton administration as the EPA deputy administrator. He is now on the adjunct faculty at Georgetown Law Center and Yale Law School and is a consultant on energy and environmental policy.