The legal pitfalls of Zeldin's climate rule rollback

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EPA's proposal to stop regulating power plant climate pollution is built around a bold claim that experts say could create legal stumbling blocks.
The U.S. power industry is the nation's second-highest emitting sector. But in its draft rule repeal, EPA argues that the industry emits too little heat-trapping pollution to be worth regulating.
EPA Administrator Lee Zeldin announced Wednesday that his agency would repeal two 2024 power sector standards: one to limit climate pollution and another to curb mercury pollution. He accused the Biden administration of enacting the rules to kill off 'baseload' coal and natural gas generation.
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'That's not the unintended consequences of the decisions that are made by the Biden EPA,' he told an audience of reporters and industry representatives. 'That was the intended consequences.'
The repeals, he said, would save fossil fuel generation and advance President Donald Trump's 'energy dominance' agenda. But Zeldin also stressed at the event that the proposals could change before they are finalized, based on public comments.
'That is a decision that we aren't prejudging, that I cannot prejudge at the onset of the proposed rule, but that is a decision that I will have to make at the end of this process,' he said, in response to a question from POLITICO'S E&E News.
If EPA finalizes its power plant rule repeal in its current forms, experts warn it could face numerous challenges. Here's a look at EPA's legal arguments and their possible pitfalls.
An about-face on the Clean Air Act
The Clean Air Act provision that EPA uses to regulate power plant carbon — known as Section 111 — asks EPA to first determine whether a source category 'causes, or contributes significantly' to harmful air pollution. EPA determined in the 1970s that coal and gas power plants met that standard and began regulating them for smog, soot and other pollutants.
EPA has always interpreted the statute as requiring only one so-called finding of significant contribution per regulated sector — and not separate findings for each pollutant, like carbon.
But Wednesday's proposals break with that precedent.
'The EPA is proposing that the Clean Air Act requires it to make a finding that [greenhouse gas] emissions from fossil fuel-fired power plants contribute significantly to dangerous air pollution, as a predicate to regulating [greenhouse gas] emissions from those plants,' states the draft rule.
Jason Schwartz, legal director for the Institute for Policy Integrity at New York University Law School, said the statutory language was 'pretty clear that you don't need pollutant-specific findings.'
Jeff Holmstead, who served as EPA air chief during the George W. Bush administration, disagreed. He said the Trump EPA is right that the Clean Air Act requires it to make a separate finding of significant contribution before regulating a new pollutant from any given sector.
'This issue, though, is separate from the question of whether CO2 emissions from U.S. power plants significantly contribute to climate change that harms public health or welfare,' he said. 'The courts could agree with EPA on this issue but still reject EPA's position that power plants do not significantly contribute to climate change.'
What is 'significant' pollution?
The U.S. power sector is responsible for about one-quarter of U.S. climate-warming emissions — and 3 percent of global emissions. It is the largest contributor to climate pollution in the U.S. outside of transportation.
It would be difficult for EPA to argue that the U.S. power sector isn't a significant source of greenhouse gas emissions, Schwartz said. In 2021, the D.C. Circuit Court of Appeals ruled in American Lung Association v. EPA that EPA was right to decide that power plants contribute significantly to climate change 'because of their substantial contribution of greenhouse gases, under any reasonable threshold or definition.'
The Supreme Court was asked to review that decision and declined.
Meghan Greenfield, a former EPA and Justice Department attorney, said the text of the EPA power plant repeal doesn't grapple meaningfully with the D.C. Circuit's decision that power plants are significant emitters almost no matter how you look at it.
But she said the agency's broader argument for why power plants shouldn't be considered significant contributors also deserved scrutiny.
EPA states in the rule that U.S. power generation's share of global CO2 emissions 'is relatively minor and has been declining over time.'
It notes that U.S. gas and coal plants are responsible for about 3 percent of worldwide emissions — a decline from previous years caused as much by rising emissions in developing countries as falling emissions in the U.S. The agency's draft repeal doesn't seem to propose that 3 percent as a new threshold below which source categories shouldn't be considered 'significant.'
Instead, it discusses the economic impact of regulating coal and gas plants, which it claims would barely make a dent in global emissions.
'What I think is really unusual here is that they're collapsing the inquiry of whether or not the pollution is harmful into whether or not you can address it,' said Greenfield, who is now a partner at Jenner and Block.
'They're saying, 'This is too small, and regardless, we can't do anything, and so it's not bad,'' she said. 'That's kind of how I read it.'
Looming litigation
Environmental groups made it clear Wednesday that they will challenge the repeals in court.
'Ignoring the immense harm to public health from power plant pollution is a clear violation of the law,' said Manish Bapna, president and chief executive officer of the Natural Resources Defense Council. 'Our lawyers will be watching closely, and if the EPA finalizes a slapdash effort to repeal those rules, we'll see them in court.'
In order for EPA to reverse its existing rule, it has to make the case that the change is reasonable, and that means the agency has to rebut all its prior rationale for its rules, said Ryan Maher, a staff attorney at the Center for Biological Diversity.
Courts tend to be skeptical when an agency does an about-face, he said.
'It is an uphill battle, especially where the significance threshold hasn't been evaluated or applied.' Maher said. 'They are changing the goal posts that basically eliminate greenhouse gas regulation.'
EPA's regulatory rollback announcement did not address whether the agency was still planning to undo its 2009 endangerment finding for greenhouse gases, a goal that fizzled out during Trump's first term.
The question of climate costs
The Biden-era power plant carbon rule that EPA proposes to repeal was supported by 405 pages of modeling and analysis on health, economic and energy impacts of that rule.
But the regulatory impact analysis EPA released Wednesday with its draft rule totaled only 72 pages, compared with the hundreds that are usually devoted to weighing the costs and benefits of important rulemakings.
The draft doesn't consider any costs associated with the increased carbon emissions the repeal would cause. It briefly cites 'significant uncertainties related to the monetization of greenhouse gases.' The Trump White House has directed agencies to avoid using social cost of greenhouse gases metrics in rulemakings.
Meredith Hankins, a senior attorney with NRDC, said the lack of detailed analysis 'definitely stood out to me.'
'Under the principles of administrative law, agencies can of course change their minds — but they do need to provide a reasoned explanation for their decision, and can't ignore significant aspects of the problem,' she said. 'The paucity of technical analysis, and total lack of climate impacts in their cost-benefit analysis certainly don't seem to lend themselves to meeting those basic standards.'
Dena Adler, a senior attorney at the Institute for Policy Integrity, expressed skepticism that EPA would be able to make its case that U.S. power sector emissions were insignificant.
'EPA will be hard-pressed to justify reversing the immense climate and public health benefits of the 2024 carbon pollution rule, and it's arbitrary for EPA to dismiss the climate benefits of the 2024 rule as zero,' Adler said.
Even the first Trump administration found U.S. power sector emissions were significant, she added.
The legal terrain
Richard Revesz, faculty director at the Institute for Policy Integrity, noted that EPA found that its proposed rule repeal would result in greater costs than benefits.
He noted that EPA for decades has considered how reducing each source of emissions contributes to solving larger pollution challenges and argued that the new approach breaks with 'rationality' and past practice.
Wednesday's proposed repeal, he said, also abandons EPA's own peer-reviewed value of the social cost of greenhouse gases, which the agency has used since the George W. Bush administration.
'Greenhouse gas emissions cause extensive economic harm, and their proper valuation is certainly not zero as this proposal essentially suggests,' said Revesz, who served as administrator at the Office of Information and Regulatory Affairs during the Biden administration. 'Courts have previously rejected agency analyses that undervalue or fail to value the significant and well-established damages from greenhouse gases.'
Zeldin's move Wednesday was just the latest in a yearslong back and forth at EPA over how the agency should address the climate effects of the power sector.
In 2015, the Obama administration set the first-ever limits on carbon pollution from power plants — only for the rule to be blocked by the Supreme Court. The first Trump administration's replacement for the Obama-era Clean Power Plan — called the Affordable Clean Energy rule — was then repealed by the Biden administration, which replaced it with the regulation EPA is now trying to unwind.
The Biden rules were already being challenged by Republican-led states and industry groups. The U.S. Court of Appeals for the District of Columbia Circuit heard arguments in December but put deliberations on hold after a request from the Trump administration.
The Biden-era rule relies on carbon capture and storage technology to curb greenhouse gas emissions. States and industry argued before the appeals court that the technology has not advanced enough to be applied at the scale proposed by the rule and that EPA exceeded its authority when it finalized the rule .
The Biden EPA defended the regulation, as well within the agency's traditional rulemaking power to regulate pollution at its source.
This story also appears in Energywire.