Obama’s Climate Legacy Under Fire as Power Plan Faces Test

  • Judge says case has ‘huge economic and political significance’
  • EPA showdown likely to reach the U.S. Supreme Court next year

President Barack Obama’s plan for shifting U.S. electrical power generation away from coal and toward cleaner sources was labeled in court as an illegal power grab that would force the creation of a “new energy economy.”

The Clean Power Plan would force states to restructure their entire electric portfolios, West Virginia Solicitor General Elbert Lin said during a hearing on Tuesday before a federal appeals court in Washington as 27 states seek to undo the initiative. Eric Hostetler, an attorney for the government, argued that the plan’s approach was reasonable, necessary and more cost-effective to help avert the “devastating harms” of climate change.

The political landscape wasn’t lost on the 10 judges -- six appointed by Democratic presidents and four by Republicans. During more than six hours of argument, the panel sharply questioned lawyers for both sides about the plan’s legal viability. The judges didn’t say when they will issue a decision.

“This is a huge case, and it has huge economic and political significance,” said Judge Brett Kavanaugh, an appointee of George W. Bush. “Whole communities are going to be left behind.”

The Environmental Protection Agency rule is a major piece of Obama’s climate legacy and is the cornerstone of the carbon-cutting promise the U.S. made to the world in Paris last December as part of a pact among more than 180 nations. Meeting those targets without the initiative will be difficult, though not impossible. 
 
In February, the U.S. Supreme Court cast doubt on the plan’s legal viability when it put the program on hold. The court didn’t resolve the issue, setting the stage for a likely showdown regardless of the appeals court ruling.

Obama’s Clean Power Plan Heads to Court: What to Know

Lawyers representing the 27 states and more than a dozen industry groups are arguing against the EPA’s authority to impose the rules, which aim to cut carbon-dioxide emissions from power plants 32 percent below 2005 levels by 2030. Attorneys for the agency say the plan was designed to address an “urgent” threat.

“The emission limit here is a lever,” Peter Keisler, an attorney for the industry challengers, told the judges. “It is a lever to force the subsidization of renewable facilities.”

Tuesday’s arguments took place against the backdrop of a presidential campaign in which Democratic nominee Hillary Clinton has said she supports the power plan and has called for support to aid the transition and retraining of coal miners. In contrast, Republican nominee Donald Trump has vowed to rescind the plan and other regulations in a bid to bring back coal jobs.

Carbon Targets

The EPA roiled the energy industry when it unveiled the plan 11 months ago. Since then, electric utilities, coal miners, labor unions and business groups have teamed up with the coalition of states to fight the new regulations. The plan dictates specific carbon-cutting targets based on the amount of greenhouse gases states released while generating electricity in 2012.

States, including West Virginia and Oklahoma, began filing suits in October to overturn the measure even though it gives them broad latitude on how to achieve their specific goals. Murray Energy Corp., the biggest privately-owned U.S. coal producer, the National Mining Association, the United Mine Workers of America, and the U.S. Chamber of Commerce also filed objections claiming the plan threatens jobs.

Harvard Law Professor Laurence Tribe, representing Peabody Energy Co., told the judges, “This action by the EPA is impermissible.”

David Rivkin, who filed Oklahoma’s challenge to the plan, accused the Obama administration of commandeering state governments to obtain a result -- greenhouse gas regulation -- it could not get from Congress, and violating the U.S. Constitution.

“It gives them no choice, no choice at all,” he told the judges Tuesday.

EPA’s Authority

The plan, which broadly interprets the EPA’s authority under the Clean Air Act, attempts to decide the best system of emissions reduction and set carbon-cutting targets for each state, rather than strict limits for individual power plants. States have wide latitude to meet their goals, such as shifting their electric portfolios to phase out coal plants, adopting more natural gas, and incorporating more renewable wind and solar power.

The EPA’s claim that it has a right to abate threats to public health is backed by 18 states, advocates for renewable energy sources and public health as well as technology companies Apple Inc., Alphabet Inc.’s Google and Microsoft Corp.

The outcome of the legal fight will dictate how much authority the EPA has to continue limiting carbon-dioxide emissions -- especially if the agency moves on to those tied to the refineries and manufacturing facilities. A narrow reading of the EPA’s power could block the agency from adopting market-based approaches for complying with other air-quality rules.

The bulk of the plan’s compliance burden falls on states heavily reliant on coal-fired power. South Dakota, for example, is required to slash emissions by 48 percent below 2012 levels. Montana and North Dakota must also reduce their levels by 47 percent and 45 percent, respectively.

EPA lawyer Amanda Berman told the panel the initiative was an example of bread-and-butter federalism because states face no sanction for failing to promulgate their own carbon-cutting blueprints; in that case, EPA would simply impose its own plan on the non-compliant state’s power generating sources.

U.S. Circuit Judge Patricia Millett, an Obama appointee, questioned whether the government plan was quite so innocuous.

“This strikes at the heart of a state. If it doesn’t have power, it can’t function,” she said. “It can’t leave you in control of the plug.”

The case is State of West Virginia v. Environmental Protection Agency, 15-1363, U.S. Court of Appeals, District of Columbia Circuit (Washington).

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