On September 27, the U.S. Court of Appeals for the D.C. Circuit heard nearly seven hours of oral arguments that, on their face, bode well for the Clean Power Plan (Plan) and for the United States’ contribution to the Paris Agreement. EPA published its ambitious emissions guidelines for the Plan on October 23, 2015—and on the very same day, states raced to challenge the rule. The Plan aims to cut CO2 emissions from power plants by 32% from 2005 levels by 2030. To achieve this goal, states are free to choose the best route to meet their assigned emission level. States can implement either an emission standards plan that applies to all affected sources, or a state measures plan that utilizes a mix of approaches (e.g. renewable energy standards, increased residential efficiency, emission trading). EPA touts the Plan as one that will reduce cost to consumers and promote development of renewable energy. Despite this, 27 states oppose the rule.
Although it is difficult to predict a victor based on oral arguments, the scales seem to be tipping in the Plan’s favor. Both sides boasted a team of attorneys advocating for or against the Plan. The Court, sitting en banc (apart from Judge Garland who recused himself), heard from counsel for state petitioners, non-state petitioners, EPA, state respondents, the power industry, and environmental groups. State challengers attacked the rule from all angles, alleging statutory, constitutional, and procedural issues to show that the plan exceeds EPA’s authority. The bulk of the day, however, was dedicated to the “generation-shifting” argument; in short, EPA interfered with states’ authority by forcing states to transition to energy-efficient economies. Luckily, the Court jumped on this argument, questioning whether the Plan is truly “transformative” given that coal is already being replaced by low-carbon resources—an observation that the power company intervenors agree with. The Court also reminded petitioners that EPA has always had the authority to set pollution performance standards. In fact, the only thing “transformative” is the Plan’s regulation of CO2, which prior case law deemed permissible. The most noteworthy question of the day came from Judge Tatel, who asked, “Isn’t reading generation shifting into the statute necessary to keep the CAA up-to-date and ensure the statute evolves to adapt GHGs, as Congress intended?” Throughout the day, questions and observations like Judge Tatel’s demonstrated an encouraging understanding of the Plan’s purpose in the context of today.
Meanwhile, parties to the UNFCCC ratified the Paris Agreement at a lightning pace over the preceding weeks, and the agreement met the threshold for entry into force on Wednesday. The United States’ pledge to the landmark agreement involves cutting overall GHG emissions by 26%–28% below 2005 levels by 2025. Because the Clean Power Plan is destined to play a major role in meeting those goals, invalidating the Plan would set the U.S. off on the wrong foot in the new and promising era of the Paris Agreement. With the agreement set to enter into force on November 4, hopefully the U.S. does not have to return to the drawing board.