US: SCOTUS decision will alter timeline, not planning

Author: Dan X. Mcgraw

2016/02/11

The US Supreme Court decision to halt the Environmental Protection Agency’s (EPA) Clean Power Plan will delay the deadlines, but most states will continue to plan in case a final ruling does not entirely squash the carbon reduction plan.

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.

The Clean Power Plan, or the so-called 111D rule, would require overall US power emissions to decline by 32% from 2005 levels by 2030. States would have the flexibility to create their own compliance plans.

The Supreme Court’s decision puts 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 2 June.

Jonas Monast, Duke University’s Nicholas Institute’s director of climate and energy programme, said the ruling would not stop states from planning compliance pathways for the Clean Power Plans or working through some of the larger issues of the finalised rule.

“It may change the timing for the states,” Monast said. “But I expect a number of states to continue to explore their options. It is still a real possibility that the court upholds the rule.”

Monast said it is hard to predict the long-term implications of the Supreme Court decision, because Tuesday’s decision is not a final ruling on the legality of the rule. He added that even states suing the EPA over the rule will likely continue to sort through the potential compliance options.

The US Court of Appeals for the DC Circuit is expected to make a final ruling on the case at the end of 2016 or the beginning of 2017. If that timing is accurate, either party could petition the Supreme Court to hear the case in the first half of 2017.

That could set the Supreme Court up to make a final decision on the issue in late 2017 or early 2018. That timeline would shorten the timeframe for states to develop compliance plans and implement carbon reduction programmes by the EPA 2022 target.

“The risk is states could face a very tight timeline if they wait for a final decision,” he said.

Monast said he thought Tuesday’s decision would have very little impact on the future of the Regional Greenhouse Gas Initiative (RGGI) or California’s cap-and-trade programme. He said both programmes were dictated by state decisions.

Even with the Clean Power Plan, Monast said the US power sector will continue to get cleaner because of technological advance, economics of fuel sources and regulatory changes.

“The question going forward is does the EPA have to implement the Clean Power Plan in a different manner or under a different provision,” he said. “But it doesn’t prevent them from acting.” dan.mcgraw@icis.com