President-elect Joe Biden should avoid the mistakes President Barack Obama made in attempting to reduce greenhouse gas emissions, a panel of environmental law experts said last week.
Georgetown University law professor Lisa Heinzerling said Biden should reconsider the White House’s role in reviewing regulations by the EPA and others.
“In my view, the Obama administration lost precious time … by delaying, weakening and stopping agency rules,” Heinzerling, a former EPA adviser, said during a panel discussion Thursday by the C. Boyden Gray Center for the Study of the Administrative State at George Mason University.
If the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) does review agency rules, it should do so quickly and provide the agencies clear rules for appealing its decisions, Heinzerling said.
“Let the head of the EPA actually be the head of the EPA, not the aides in the White House. Not the OIRA head. Not the economic advisers; not the new climate czar. … I think that will be the key to getting work done quickly,” she said. “It can seem right now in the beginning of the administration that four years is a long time. It’s not.”
But Jonathan Adler, professor at the Case Western Reserve University School of Law, said OIRA can help ensure EPA’s regulations are written in a way to withstand court challenges.
As an example, he said tightening National Ambient Air Quality Standards (NAAQS) on ozone and particulate matter could produce large reductions in carbon emissions.
“One value of having OIRA involved in the process, if the right people are there, is to make sure that when EPA is tightening the NAAQS standards, even if carbon reductions are part of the reason why EPA’s really doing it, EPA is sure to give a justification that [uses] the traditional rationales for NAAQS standards setting — because that’s what the courts are going to want to see — even if we all know there’s some great carbon gains here too.”
“There is some legal risk” in seeking to capitalize on the co-benefits, Adler acknowledged. “But it’s less legal risk than going straight at greenhouse gas emissions.”
Clean Energy Standard vs. Clean Power Plan, Carbon Price
Adler and Heinzerling agreed, however, that the new administration should not attempt to revive the Obama EPA’s Clean Power Plan, which was stayed by the Supreme Court before it was formally abandoned by the Trump administration. The CPP would have set state targets to reduce carbon emissions from electricity generation by 32% from 2005 levels.
With the U.S. Senate split 50-50 between Democrats and Republicans, Vice President-elect Kamala Harris can cast the tiebreaking vote to pass a budget reconciliation bill. But the Democrats are short of the 60-vote majority needed to prevent other legislation from falling to filibusters. That means Biden will need to rely largely on his executive powers to try and meet his campaign proposal to eliminate power sector carbon emissions by 2035, panelists said. (See Dems’ Senate Gains Raise Hopes for Biden Agenda.)
“I think a Clean Power Plan 2.0 is incredibly high risk,” Adler said. “The Supreme Court before did not seem too enamored of the Clean Power Plan. It’s likely to be even more hostile today.”
Heinzerling noted that the Supreme Court did not issue an opinion on the CPP, which some critics said was illegal for going “beyond the fence line” in forcing carbon reductions at generating plants. Harvard Law School professor Laurence Tribe has said the rule violated the “non-delegation doctrine” — that EPA lacked authority to regulate those sources at all.
“So we don’t know why it went down, and I think it would be risky to try it again,” said Heinzerling, the lead author of the winning briefs in the Supreme Court’s Massachusetts v. EPA ruling, which held that the Clean Air Act gives EPA the authority to regulate GHGs. “As to what do you have to lose? You have to lose all that time in an administration committed to doing something about climate change. You just can’t spend that amount of time, resources, political capital and everything else on something that’s going to be a loser.”
The filibuster is not the only obstacle to Biden’s climate ambitions. “I think even getting 50 votes so that the vice president can cast the tie-breaking vote will be a challenge in some of these areas because I’m not sure that senators like Joe Manchin [(D-W.Va.), the incoming chair of the Energy and Natural Resources Committee,] are always going to be on board,” Adler said. “I think this administration is going to spend a lot of time focusing on the use of fiscal instruments, use of spending authority as a way of advancing environmental policy especially in the climate area.”
Adler said Biden has an opportunity to build a coalition “where you’re spending on infrastructure that a lot of folks on the right want, but you’re also doing it in a way that deals with some of the equity and justice concerns … and also focused on lower-carbon, lower environmental impact infrastructure and facilitating transitions away from carbon-emitting fuels.”
Gene Grace, general counsel for the American Clean Power Association (formerly the American Wind Energy Association), said that while Biden is unlikely to win legislation enacting a carbon tax, “things like a Clean Energy Standard do seem to be building bipartisan support and something that more Democrats like Manchin and others might be able to get behind — and Republicans as well. You need to probably get over the 60[-vote] threshold if you’re going to do that.”
Biden’s climate plan pledges to “scale up best practices from state-level clean energy standards,” which require that a certain percentage of retail electricity sales come from non- or low-emitting sources. He is expected to announce the U.S. will rejoin the Paris Agreement on climate change on Inauguration Day.
Adler said he believes a carbon tax could be adopted through budget reconciliation, without needing a 60-vote majority.
“I think if it’s pitched right and phrased right, there is more potential support for that among at least some Republicans than people sometimes think,” he said. “And if the choice is that or giving EPA more authority to pressure states to regulate [and] more authority to go sector by sector and impose regulatory standards, I think there are a lot of folks who view the use of fairly straightforward fiscal tools … as less intrusive to liberty [and] less bureaucratic. And I think [it is] of particular significance in the context of climate change in particular, the sort of things that can actually be adopted and implemented far more rapidly than the regulatory alternatives.”
Reversing Regulations, Rebuilding EPA
The new administration needs to rebuild the morale and expertise at EPA following the departures of many staffers under President Trump, Heinzerling said, noting the agency’s budget is more than $1 billion less than it was 10 years ago.
She cited Trump’s appointment of those with industry ties to scientific advisory panels and EPA’s rule on scientific transparency, which she said was intended to discourage the agency “from relying on foundational scientific studies showing a link between particulate matter pollution and human health.”
Heinzerling also criticized a rule excluding “co-benefits” from cost-benefit analyses and a final rule published Wednesday that creates barriers to regulating GHG emissions from sources such as oil refineries or steel plants. The rules say an industrial sector that contributes less than 3% of total U.S. emissions is not a “significant” contributor under the Clean Air Act.
“The outgoing leadership in EPA has broken a lot of things and left quite a mess, and they’re running through the tape; they’re issuing rules without the 30-day waiting period that normally accompanies rulemaking. They’re issuing final rules … without proposed rules,” Heinzerling said.
The good news, she said, is that many of the Trump rules can be reversed because of the administration’s “‘cavalier-ness’ toward law; toward science; toward legal process.”
Adler said it will take a long time to reverse Trump administration regulations regarding the National Environmental Policy Act. “But it would not take very long, necessarily, to adopt guidances on how to interpret those regulations, particularly as they apply to climate change.”
Congressional Democrats also are expected to use the Congressional Review Act (CRA) to reverse some regulations that were finalized in the final weeks of the Trump administration. “But there will have to be some choices about how to use it because it takes up floor time in the House and Senate, and that floor time will be a precious commodity for the budget; perhaps for an impeachment trial; perhaps for other matters,” Adler said.
He cited an analysis by George Washington University’s Regulatory Studies Center that found more than 1,300 final regulations that could be subject to the CRA, including about 200 on environmental policy.
FERC’s Role
Grace said FERC “will be critical for fast tracking the time in which clean energy can be deployed to meet the 2035 Biden climate targets.”
“Even under the Trump administration, work has already been done at [FERC] to drive carbon pricing in wholesale energy markets and ensure that transmission can deliver the amount of clean energy needed to meet climate goals,” Grace said. (See Wide Support for FERC Carbon Pricing Statement.)
“Incorporating carbon pricing into the energy markets really can go a long way to help facilitate something like the Clean Energy Standard at the federal level [and make it] more cost effective. It really [should not] be underestimated how much FERC can play a role in this process.”
He added a hope that under Democratic control, FERC will reverse its policy imposing price floors for state-subsidized renewables, such as the minimum offer price rule in PJM and buyer-side mitigation in NYISO. (See related story, NYISO Explores Improving BSM Processes.)
Grace said future infrastructure and economic recovery legislation “could offer opportunities to enact modest clean energy programs.”
Adler noted that the Justice Department’s Office of Legal Counsel recently issued a memorandum positing that the White House may impose regulatory review requirements on independent agencies such as FERC.
Citing a commentary by Sally Katzen, who served as OIRA administrator under President Bill Clinton, Adler said that the Biden administration “should embrace this and use this as a way of forcing agencies like FERC, the [Securities and Exchange Commission] [and] the [Commodity Futures Trading Commission] to incorporate climate change and environmental justice … into their policy development process.”
