President Obama’s climate change agenda hit a roadblock at the Supreme Court on Monday, but the administration brushed aside the decision and declared victory anyway, saying most utilities already have made the pollution cuts that technically are no longer necessary in light of the high court’s ruling.
In a 5-4 decision, the Supreme Court blocked the Environmental Protection Agency’s mercury and air toxics standards, charging that the administration failed to adequately consider the estimated $10 billion it would cost utilities to dramatically cut power plant pollution to comply with the measure.
The high court’s decision does not necessarily stop the EPA from implementing the standards in the future, but it does establish something of a precedent, with the justices making clear the administration must consider the economic consequences of its climate change agenda.
“EPA’s decision to regulate power plants … allowed the agency to reduce power plants’ emissions of hazardous air pollutants and thus to improve public health and the environment. But the decision also ultimately cost power plants, according to the agency’s own estimate, nearly $10 billion a year,” Justice Antonin Scalia wrote in the majority opinion. “EPA refused to consider whether the costs of its decision outweighed the benefits. The agency gave cost no thought at all, because it considered cost irrelevant to its initial decision to regulate.”
While Republicans on Capitol Hill and other administration critics praised the decision, the EPA seemed unfazed and said mercury and air toxics standards are, for all intents and purposes, still in effect despite the court’s ruling.
“The ruling couldn’t mitigate all of the injustice wrought by the regulation. Utilities have to plan years in advance, and judicial review of [mercury and air toxics standards] took more than three years,” said William Yeatman, a fellow with the Competitive Enterprise Institute. “The unfortunate result is that the preponderance of regulated entities already complied with the rule. That an illegal rule was allowed to have such a consequence is an injustice.”
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Utilities have spent years planning how they’ll comply with the standards. The upgrades and retrofits of power plants in order to meet mercury and air toxics standards cannot easily be undone, nor are utilities likely to completely ignore the rules given the fact that the EPA surely will revise and reintroduce them with a stronger cost-benefit analysis included, legal analysts say.
The EPA essentially has achieved its central goal even though its regulations have temporarily been tossed.
“EPA is disappointed that the court did not uphold the rule, but this rule was issued more than three years ago, investments have been made and most plants are already well on their way to making emissions reductions,” the agency said in a statement. “Since the decision was about how and when the agency considered costs in its decision that mercury and air toxic emissions from power plants threaten public health and the environment, and not EPA’s Clean Air Act authority to limit hazardous air pollutants, EPA remains committed to ensuring that appropriate standards are in place to protect the public from the significant amount of toxic emissions from coal and oil-fired electric utilities and continue reducing the toxic pollution from these facilities.”
Other pieces of Mr. Obama’s climate change agenda, such as the Clean Power Plan, which will restrict carbon emissions from power plants, also face an uncertain legal future.
But the effects of those regulations already are being felt. EPA’s climate change rules have led to the closure or conversion of at least 393 power-generation units — or about 62,000 megawatts of generating capacity, according to an analysis by the American Coalition for Clean Coal Electricity.
Mr. Obama has said the broad goal of his climate change programs is to ween the U.S. off of fossil fuels and promote the expansion of renewable energy such as wind and solar power.
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Monday’s decision would seem to be a major hurdle for the president and his climate goals, but legal specialists say the EPA largely is correct in its assertion that the regulations remain in place despite the Supreme Court’s action.
Utilities “have decided to phase out coal plants. Those are on schedule, and the indications are nobody is planning to change that schedule. Some have started to … spend money to put updated pollution control equipment in,” said Charles Warren, chairman of the environmental group at the law firm Kramer Levin Naftalis & Frankel LLP. “I think this buys a little time, but I do think, in the end, it is going to be very difficult to forestall the regulations. Most utilities — since over 80 percent of them have already decided what they’re going to do vis a vis their coal-fired plants — are going to go forward.”
It’s unlikely utilities would be successful in legal attempts to recoup from the federal government money spent on the now-invalid MATS program, Mr. Warren added.
For utilities, similar problems could arise from the Clean Power Plan. Under the proposal — the final version of which is due out this summer — states are responsible for achieving carbon-reduction targets set by the EPA. Figuring out how to meet those goals takes years of planning, and the work largely will be done if and when the rules end up before federal courts.
Republicans have proposed legislation to halt EPA regulations until all legal challenges are settled, but Mr. Obama surely would veto such a measure.
Critics say the current system is fundamentally unfair to power generators.
Still, Republicans praised the ruling and said it represents a firm rebuke of Mr. Obama’s attempts to battle climate change through executive action rather than legislation.
“The mere fact that the EPA wished to ignore the costs of its rules demonstrates how little the agency is concerned about the effects it has on the American people [and] the EPA continued to burden the public with more and more costs even as so many are still struggling to get by and improve their lives in this economy,” said House Majority Leader Kevin McCarthy, California Republican. “Today’s decision firmly rejects the Obama administration’s circumvention of the democratic process and restores a dose of accountability to the increasingly unaccountable executive branch.”