US: Supreme Court halts EPA’s Clean Power Plan

The US Supreme Court halted the Environmental Protection Agency’s (EPA) Clean Power Plan on Tuesday night, likely creating further uncertainty about the future of the proposed carbon reduction programme.

In a 5-4 judgement, the Supreme Court granted a legal stay to states and energy companies that had argued that the EPA does not have the legal authority to regulate greenhouse gas emissions, and that the rule would increase electricity prices.

Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented.

“The Obama administration clearly exceeded its authority in imposing this plan, which would cost taxpayers and consumers alike hard-earned money in exchange for less-reliable service,” Texas Attorney General Ken Paxton said.

The EPA has routinely maintained that it has the legal authority to regulate greenhouse gas emissions.

The states and several coal companies sued the EPA after the government agency published the Clean Power Plan, or the so-called 111D rule, in October. The rule would require overall US power emissions to decline by 32% from 2005 levels by 2030.

The Supreme Court’s decision would put a halt on the Clean Power Plan until the US Court of Appeals for the DC Circuit makes a decision about the legal arguments. The court is scheduled to hear oral arguments on June 2.

The US Court of Appeals had previously denied a legal stay for the lawsuit.

A final decision is not anticipated until later this year, and because of that, it could create uncertainty about the future of the programme. Under the finalised version of the Clean Power Plan, states were required to submit compliance plans as early as September.

States could opt for an extension, however.

Multiple lawyers have said the finalised plan provides the EPA more legal protection than the proposed rule, which was released in June 2014. Those changes include additional time for states to implement the reductions.

Lawyers had previously thought a legal stay was unlikely, because the rule has not been implemented yet as emission reductions will not be phased in until 2022.

The Supreme Court’s decision is likely a blow to states with existing cap-and-trade programmes, such as California and the nine northeastern states in the Regional Greenhouse Gas Initiative (RGGI).

RGGI and California were seen as the forerunners in the climate change field, and both programmes were expected to benefit from the new rule. dan.mcgraw@icis.com