Pruitt’s Clean Power Break
The Trump Administration is giving the economy a boost with its deregulatory agenda, and the latest example comes Tuesday when Environmental Protection Agency chief Scott Pruitt will propose to repeal the Obama Administration’s Clean Power Plan. Ending this power grab will uphold the letter of the law and restore cooperative federalism with the states.
The Obama EPA imposed the rule in 2015 to regulate carbon emissions nationwide and force the retirement of coal-fired electric power plants. Former EPA chief Gina McCarthy took creative license by reinterpreting Section 111 of the Clean Air Act, which directs the agency to implement the “best system of emission reduction” for pollutants.
EPA had previously applied this provision narrowly to single sources of emissions (e.g., individual power plants), but Ms. McCarthy broke with decades of precedent to dictate a systemic shift in power generation. The Clean Power Plan initially requires new efficiency at coal-fired plants, but over time it impels states to substitute coal with natural gas and ultimately solar and wind.
This usurped the regulatory role of states and contradicted the Clean Air Act text, which says that “air pollution control at its source is the primary responsibility of States and local governments.” The Clean Power Plan would have forced states to scramble to alter their electric-power mix, shutting down coal plants long before the end of their useful life regardless of whether substitutes were on hand and affordable. Higher electricity costs and brownouts were likely.
The Supreme Court stayed the rule in February 2016 after 27 states and 37 electric co-ops sued. In March Mr. Pruitt launched a formal review of the rule, and a draft of the EPA’s new analysis that we’ve seen estimates that rescinding the carbon rule would save $33 billion in compliance costs by 2030.
It also finds that the Obama EPA rigged the cost-benefit calculations. For example, the McCarthy EPA claimed tangential benefits from reductions of other emissions like particulate matter that could have been achieved with less heavy-handed regulation. U.S. social costs were compared against global climate benefits.
Ms. McCarthy also assumed linear health benefits from emissions reductions notwithstanding diminishing returns. In violation of the Office and Management and Budget’s longstanding practice, energy efficiency was cited as an avoided cost rather than as a benefit. This allowed the Obama Administration to low-ball the rule’s cost estimate.
Mr. Pruitt’s proposed rule-making starts the 60-day window for public comments. EPA notes that it hasn’t decided whether it will follow its repeal of the Clean Power Plan with a new rule that regulates greenhouse gases from existing power plants and is considering “whether it is appropriate to propose such a rule.” The decision in part will depend on how well Mr. Pruitt thinks EPA can defend any new rule under the inevitable legal challenges from the environmental left.
But repealing the regulatory overreach of the Obama Administration is the first crucial step that is already paying dividends in less economic uncertainty and more confidence in the reliability of the future electric grid.
Appeared in the October 9, 2017, print edition.