Captains of industry contending with a sea of Obama era regulations.
Thanks to Rich Lowry’s article at National Review and some other sources, we can see clearly the three fatal flaws bringing down the Clean Power Plan in its entirety. Lowry wrote The Great Regulatory Rollback. Excerpts below with my bolds and images.
1. No federal law governs CO2 emissions.
Lowry: The Clean Power Plan, which sought to reduce U.S. carbon emissions by 32 percent below 2005 levels by 2030, was government by the administrative state on a scale that has never been attempted before. The EPA took a dubious reading of a portion of the Clean Air Act (Section 111, which arguably prevented the EPA from taking this action rather than empowered it to do so) and used it to mandate that the states adopt far-reaching plans to reduce carbon emissions, under threat of the loss of federal highway funds.
In an August ruling of the DC Court of Appeals, the justices put it in writing:
However, EPA’s authority to regulate ozone-depleting substances under Section 612 and other statutes does not give EPA authority to order the replacement of substances that are not ozone depleting but that contribute to climate change. Congress has not yet enacted general climate change legislation. Although we understand and respect EPA’s overarching effort to fill that legislative void and regulate HFCs, EPA may act only as authorized by Congress. Here, EPA has tried to jam a square peg (regulating non-ozone depleting substances that may contribute to climate change) into a round hole (the existing statutory landscape).
The Supreme Court cases that have dealt with EPA’s efforts to address climate change have taught us two lessons that are worth repeating here. See, e.g., Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014). First, EPA’s well intentioned policy objectives with respect to climate change do not on their own authorize the agency to regulate. The agency must have statutory authority for the regulations it wants to issue. Second, Congress’s failure to enact general climate change legislation does not authorize EPA to act. Under the Constitution, congressional inaction does not license an agency to take matters into its own hands, even to solve a pressing policy issue such as climate change.
From the Court Document On Petitions for Review of Final Action by the United States Environmental Protection Agency. Additional discussion at DC Appeals Court Denies EPA Climate Rules
2. EPA regulates sites, not the Energy Sector.
Lowry: The presumption of the plan was jaw-dropping. The EPA usually targets pollutants; carbon dioxide isn’t one (although the Supreme Court erroneously said that it meets the definition in the case of Massachusetts v. EPA). The EPA has always regulated specific power plants; in this scheme, it went “outside the fence” to mandate broader actions by the states, e.g., the adoption of quotas for renewable energy. The EPA once considered its mandate to be protecting clear air and water for Americans; with the Clean Power Plan, it sought to adjust the global thermostat for the good of all of humanity.
From the EPA document Repeal of Carbon Pollution Emission Guidelines
That the CPP depends on the employment of measures that cannot be applied at and to an individual source is evident from its treatment of coal-fired power plants. The rule established performance standards for coal-fired plants assuming a uniform emissions rate well below that which could be met by existing units through any retrofit technology of reasonable cost available at the time. This means that, in order to comply, many owners or operators of existing coal-fired units were expected to shift generation from such units to gas-fired units or to renewable generation. Similarly, the rule contemplated that gas-fired units would shift generation to renewable generation. The rule therefore is formulated in reliance on and anticipation of actions taken across the electric grid, rather than actions taken at and applied to individual units. Pp 8-9
The EPA is proposing to repeal the CPP in its entirety. The EPA proposes to take this action because it proposes to determine that the rule exceeds its authority under the statute, that those portions of the rule which arguably do not exceed its authority are not severable and separately implementable, and that it is not appropriate for a rule that exceeds statutory authority—especially a rule of this magnitude and with this level of impact on areas of traditional state regulatory authority—to remain in existence pending a potential, successive rulemaking process.Pg 12
After reconsidering the statutory text, context, and legislative history, and in consideration of the EPA’s historical practice under CAA section 111 as reflected in its other existing CAA section 111 regulations, the Agency proposes to return to a reading of CAA section 111(a)(1) (and its constituent term, “best system of emission reduction”) as being limited to emission-reduction measures that can be applied to or at an individual stationary source. That is, such measures must be based on a physical or operational change to a building, structure, facility, or installation at that source, rather than measures that the source’s owner or operator can implement on behalf of the source at another location. The EPA believes that this is the best construction of CAA section 111(a)(1), as explained in detail below, for several reasons.pg 14
Therefore, the EPA proposes that the BSER be limited to measures that physically or operationally can be applied to or at the source itself to reduce its emissions. Generation shifting—which accounts for a significant percentage of the emissions reductions projected in the CPP and without which individual sources could not meet the CPP’s requirements—fails to comply with this limitation. Accordingly, the EPA proposes to repeal the CPP.pg25-26
In addition, while the EPA is authorized to regulate emissions from sources in the power sector and to consider the impact of its standards on the generation mix in setting standards to avoid negative energy impacts, regulation of the nation’s generation mix itself is not within the Agency’s authority. Regulation of the energy sector qua energy sector is generally undertaken by the Federal Energy Regulatory Commission (FERC) and States, depending on which markets are being regulated. Pg.27
3. CPP costs are huge, while benefits are marginal.
Lowry: The last gets to the absurdity of the Clean Power Plan on its own terms — it did virtually nothing to affect global warming. As Benjamin Zycher of the American Enterprise Institute points out, the Obama administration’s Climate Action Plan (which includes the Clean Power Plan) would reduce the global temperature by 15 one-thousandths of a degree by 2100. The point wasn’t to fight climate change per se, but to signal our climate virtue in the hopes of catalyzing action by other nations and, not incidentally, hobble the U.S. coal industry in favor of more politically palatable sources of energy, namely wind and solar.
An irony emerges on this third point. In order to propose a regulatory change, the EPA must present calculations pertaining to the “Social Cost of Carbon (SCC)”, now renamed “Social Cost of CO2 (SC-CO2)”. In the document released by EPA, this Regulatory Impact Analysis (RIA), begins on page 30 with several tables.
Methodology Considerations:
In addition to presenting results from the 2015 CPP RIA, this RIA uses two additional quantitative approaches to analyze the effects of the CPP in order to present information on the potential effects of the proposed repeal of the CPP. The first approach involves a modest reworking of the 2015 CPP RIA to increase transparency and illuminate the uncertainties associated with assessing benefits and costs of the CPP, as reflected in the 2015 analysis, as well as analyzing the potential effects of the CPP repeal. More specifically, this analysis increases transparency of the 2015 CPP analysis by presenting the energy efficiency cost savings as a benefit rather than a cost reduction and provides a bridge to future analyses that the agency is committed to performing. The current analysis also provides alternative approaches for examining the foregone benefits, including more clearly distinguishing the direct benefits from the co-benefits and exploring alternative ways to illustrate the impacts on the total net benefits of the uncertainty in health co-benefits at various PM2.5 cutpoints. This approach shifts the focus to the domestic (rather than global) social cost of carbon, and employs both 3 percent and 7 percent discount rates. Finally, we consider that how changing market conditions and technologies may have affected future actions that may have been undertaken by states to comply with the CPP and how these changes may affect the potential benefits and costs of the CPP repeal. Pg. 30
As the RIA analyzes costs and benefits applying a variety of different methods and discount rates, there is a relatively large number of results. We present the full suite of avoided compliance cost, forgone benefit, and net benefit results discussed in the RIA in Tables 1 through 3. Pg 33
Therefore, in Tables 4 and 5 we offer another perspective on the costs and benefits of this rule by presenting a comparison of the forgone benefits from the targeted pollutant – CO2 – (the costs of this proposed rule) with the avoided compliance cost (the benefits of this proposed rule). Excluded from this comparison are the forgone benefits from the SO2 and NOX emission reductions that were also projected to accompany the CO2 reductions. However, had those SO2 and NOX reductions been achieved through other means, then they would have been represented in the baseline for this proposed repeal (as well as for the 2015 Final CPP), which would have affected the estimated costs and benefits of controlling CO2 emissions alone. Pg.37
Table 5 Gives the Bottom Line (in billions of US$)
| Year |
Discount
Rate |
Compliance Costs
Avoided |
Forgone Domestic
Climate Benefits |
| 2020 |
3% |
($0.30) |
$0.10 |
| 7% |
($0.30) |
$0.00 |
| 2025 |
3% |
$14.50 |
$1.30 |
| 7% |
$14.50 |
$0.20 |
| 2030 |
3% |
$14.40 |
$2.50 |
| 7% |
$14.40 |
$0.40 |
Summary
There will be lots of pushback on these numbers since they show billions of compliance cost against miniscule benefits.
Lowry: If Congress had authorized the EPA to remake the nation’s energy economy, we would presumably be aware of it and recall an impassioned congressional debate over this radical and costly change. In fact, the opposite is true. Congress has declined to enact laws limiting carbon emissions, including when Democrats held both houses of Congress under President Obama. If the future of the planet is at stake and it requires a generational effort to save it, surely it is not too much to ask that a statute or two be enacted by Congress explicitly committing the country to the task. Yes, this requires winning elections and gaining democratic assent, but such are the challenges of living in a republic and a nation of laws.
For background on SCC, now termed SC-CO2:
Social Cost of Carbon: Origins and Prospects
Six Reasons to Rescind Social Cost of Carbon
SBC: Social Benefits of Carbon
___A. Bernaerts (2016), Offshore Wind-Parks and Northern Europe’s Mild Winters: Contribution from Ships, Fishery, et cetera? Journal of Shipping and Ocean Engineering 6, p. 46-56, PDF 
Science Matters 