February 2016
The U.S. Supreme Court last week issued a judicial stay of President Obama’s signature climate change policy, the Clean Power Plan (CPP). The decision halts further implementation of the proposed restrictions on carbon emissions from fossil fuel-fired electric-generating units until completion of the expedited, 27-state challenge pending before the D.C. Circuit. While opponents of the CPP look to the stay decision as raising fundamental questions about the Plan’s viability, those concerned about climate change worry about delay, as well as the international implications of the decision, given the U.S. leadership in the recent COP 21 Agreement in Paris.
What does the stay mean, practically speaking? How will this affect the time line for CPP and the corresponding state plans? How concerned should those who support the plan and those in the international community interested in whether the U.S. can make good on its intended nationally determined contribution (INDC) under the Paris agreement be?
For a legal perspective on these questions, ELI Research Associate and Clean Energy Leadership Institute Fellow, Talia Fox, sat down with Scott Fulton, former U.S. EPA General Counsel during the first term of the Obama Administration and current President of the Environmental Law Institute.
Talia (T): For those reading this who may not have a legal background, could you break down what happened in the U.S. Supreme Court’s decision to stay the Clean Power Plan?
Scott (S): When an agency promulgates a regulation, that regulation can be challenged in court through a petition for review. Petitions for review of EPA regulations under the Clean Air Act have to be heard by the D.C. Circuit Court of Appeals, and the D.C. Circuit Court of Appeals decisions are then potentially reviewable by the U.S. Supreme Court. In the course of rulemaking litigation, there’s always the question of the legal effect of the rule pending completion of the challenge to the rule. What a motion for stay intends to accomplish is halt compliance with the rule until the courts have considered its legal merits and subsequently issue a decision. Here, a motion for stay pending appeal was filed in the D.C. Circuit, and the D.C. Circuit about a month ago ruled against the motion, holding that the rule should not be stayed, based on the legal criteria for issuing a stay.
T: How did this issue get to the Supreme Court? What happened when it got there?
S: The parties who filed the stay motion took the extraordinary step of asking the Supreme Court to stay the matter despite the D.C. Circuit’s decision. This is a very unusual request, and it is unprecedented for the court to entertain such a request, because we’re at a very early stage of the litigation. The Court nonetheless decided to entertain—and grant—the motion to stay, essentially disagreeing with the D.C. Circuit’s conclusion. The Court says stunningly little in its order, given the domestic and international significance of its action. There’s simply no analysis to indicate why the Court thought a stay was appropriate. Were the dynamics associated with states needing to continue working on their plans to implement the CPP pending appeal on the Court’s mind? Was it concerned that lasting changes would be made in the power sector before the rule’s legal viability had been established? Was the Court persuaded that the rule was flawed? If so, was the flaw a manageable one or a foundational one? We don’t know and are left to speculate.
T: What does this mean for the time line of the final rule in your estimation?
S: Implementation here all plays out in the hands of the states or, in the absence of state plans, under a federal implementation plan. The stay has the practical effect of extending the milestones for submission of implementation plans. Assuming that the stay would remain until the rule’s fate is finally determined, we’re probably looking at a minimum delay of around a year (under a scenario in which the D.C. Circuit and Supreme Court both uphold the rule in its current form) and a maximum potential delay of several years. Of course, a year’s delay or better puts the fate of the CPP to some degree in the hands of the next White House.
T: Couldn’t you argue that the states that are already introducing plans would have done so anyway? And that the states opposed are not making those plans in the first place? Or do you think that those state plans were in the works and now will be stalled?
S: For the states that were intending to do something here, I doubt they will slow down, although we could find that the political dynamic for some of them changes to a degree. It can be easier for states to be progressive on an issue like this if there is an outside driver. Some state officials, for example, have probably been able to persuade their legislators or other forces within their governments that it is better to move forward with a plan than to wait and have the EPA default plan kick in. This kind of leveraging is not uncommon, and the stay might diminish the strength of that leveraging.
Some states, including some of those who are challenging the rule, are likely working on parallel tracks, fighting the rule but at the same time quietly assessing what it would take to comply. The second of these parallel tracks could be affected by the stay decision, not just because there’s a delay—but also because there’s a suggestion in what the Court has done that it sees the rule as vulnerable, at least in some respect. So the decision may encourage a wait-and-see approach on the part of some.
T: Do you think it could jeopardize the United States’ acceptance of the Paris Agreement this coming April?
S: I’m guessing not. State Department officials have already indicated that they do not plan to seek Senate advice and consent for the agreement because, among other things, the INDCs under the agreement are not binding and authority exists to fulfill U.S. involvement under the Agreement without legislative action. The fact that the Supreme Court has, without explanation, stayed the effect of the rule as currently constituted would not appear to call those suppositions fundamentally into question or change that calculus.
T: Some experts are saying that this decision could unravel the negotiations that took place in Paris …
S: I think that’s overstating where we are. This stay decision is a part of the U.S. lawmaking process; other countries may encounter their own bumps in the road as they develop programs for meeting their INDCs. This development is not fatal to the U.S. meeting its INDC; we’ll know more when the rule is reviewed on the merits, which is the next step.
T: How concerned should those who support the rule really be? What does Justice Scalia’s tragic death bring to the equation?
S: It’s important not to forget that the Supreme Court just a few years ago recognized EPA’s authority to regulate greenhouse gases under the very section of the [Clean Air Act], section 111, upon which the CPP is based. I doubt the Court, or the Court of Appeals, will undercut that earlier decision, and rather think it’s more likely that any concerns will be registered in a way that puts the rule on the path of constructive adjustment, the way that many rulemaking challenges evolve, with the courts identifying problems and sending a rule back to the Agency to address the problems, with a rule ultimately emerging that passes judicial muster. This of course assumes continued support for the CPP by the White House.
Regarding Justice Scalia, first let’s honor the man. He has been a stalwart on the Court for decades and has served his country with distinction; he will be greatly missed. In terms of the CPP, apart from leaving the Court without the sharp analytical mind of one of the Court’s most iconic conservative justices, his absence leaves the Court with 8 justices and the potential for a 4-4 split in a decision on the merits. In that event, the ruling of the D.C. Circuit would stand. This means that the D.C. Circuit’s decision on the merits could well be the decision to watch now and that whatever concerns may have been behind the Supreme Court’s stay decision will prove non-impactful, particularly since we do not know what they were.
T: What does this mean, in your opinion, for the future of clean energy?
The shift towards clean energy is well underway and has a good deal of momentum behind it. Comparative cost and consumer choice are also big drivers, and, in my view, this stay decision by the Supreme Court will not likely affect the energy trend line in a meaningful way.