EPA Gets Kneecapped At The USSC


by Karl Denninger, Market Ticker:

This is an interesting decision that will have very wide-ranging consequences.

First up, however — it does not eliminate what is known as the Chevron Deference doctrine.  It nips at the edge, but as is the usual Supreme Court practice if they can find a reasoned way to not do something like that, they don’t.  They did, thus they didn’t.

It is pertinent to the Court’s analysis that EPA has acted consistent with such a limitation for four decades. But the only question before the Court is more narrow: whether the “best system of emission reduction” identified by EPA in the Clean Power Plan was within the authority granted to the Agency in Section 111(d) of the Clean Air Act. For the reasons given, the answer is no. Pp. 28–31.

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Chevron is more-broad than this, but not by a great deal — it’s a matter of degree, not act.  For this reason the decision is very, very consequential.  Indeed it is almost-certain to change far more than the overturning of Roe — and that’s a good thing.

Here’s the key to the entire case:

Since passage of the Act 50 years ago, EPA has exercised this authority by setting performance standards based on measures that would reduce pollution by causing plants to operate more cleanly. In 2015, however, EPA issued a new rule concluding that the “best system of emission reduction” for existing coal-fired power plants included a requirement that such facilities reduce their own production of electricity, or subsidize increased generation by natural gas, wind, or solar sources.

The question before us is whether this broader conception of EPA’s authority is within the power granted to it by the Clean Air Act.

In other words the EPA took what was clearly within their regulatory authority and expanded it to claim their authority extended to an outright ban on the use of a given technology not because it produced a specific pollutant they were authorized to regulate but because they determined that another means of generating power was more to their liking.

EPA’s regulatory animus comes from two primary sources.  The first is so-called “NAAQS” pollutants which may reasonably be anticipated to endanger public health or welfare and which come from numerous or diverse sources, either mobile or stationary.  These are substances which are not specifically traceable to any single activity, event or economic action.  The second is “HAP”, which targets substances that are known or expected to be carcinogenic, mutagenic, teratogenic, neurotoxic or otherwise toxic under either acute or chronic exposure.

The latter are of much higher concern for obvious reasons and there the EPA must promote emission standards that, to the maximum reasonably and economically achievable extent, reduce those emissions.  For example scrubbers on a coal-fired plant are required under that rule because mercury emissions, for example, fall into the category of clearly toxic.

Then there is this third category, which is where the controversy lies in question, known as the “New Source Performance Standards” program.  But this standard sets maximum emission outputs and leaves how they’re achieved up to the entity in question, up to the “Best System of Emissions Reduction” applicable to that particular thing.

Here’s the key element: The NSPS only applies to things that were not part of the other two regulatory schemes.  If a plant was operating under the other two for those specific items of emission EPA does not get a second bite at the same apple.  They already took the bite and don’t get a second one.

Well, the EPA thought they could get around this specifically with carbon dioxide, which is NOT under either HAP (obviously) or NAAQS.

Thus they not only made permitting new plants basically impossible they imposed a cap-and-trade, or other similar scheme (requiring partial generation with wind or solar is in effect a cap and trade system no matter what you call it) on EXISTING plants which had the effect of making all of them uneconomic.

But the EPA’s motivating animus was not reducing a “pollutant”, never mind that CO2 isn’t a pollutant — it is essential for life on this planet, including human life.  Without it all plants die, including plankton and algae in the oceans, and without plants there are no animals.  In other words the premise is false but even leaving that aside, which the court did, the EPA stated that its motivation wasn’t reducing a pollutant: It was changing the mix of how electricity is generated.

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