Clean Power Plan Comes to Court: What to Expect Next Tuesday

Next week the Clean Power Plan will have its day in court. On September 27th, 10 judges on the U.S. Court of Appeals for the D.C. Circuit will hear oral argument on challenges to EPA’s landmark limits on the harmful carbon pollution from the nation’s fossil fuel-burning power plants. The Clean Power Plan's foes grossly misrepresent how the Plan works and grossly exaggerate its impacts. We are confident that the Clean Power Plan rests on a solid legal foundation, and none of their legal arguments holds up. Here’s a quick response to their main claims.

Next week the Clean Power Plan will have its day in court. On September 27th, 10 judges on the U.S. Court of Appeals for the D.C. Circuit will hear oral argument on challenges to EPA's landmark limits on the harmful carbon pollution from the nation’s fossil fuel-burning power plants. 

Action on climate is long-overdue, and the Clean Power Plan is a critical step to curb the carbon pollution that drives dangerous climate change and threatens our children, our communities, and our planet. We are confident that the Clean Power Plan rests on a solid legal foundation, and we look forward to its day in court.

Here’s a look at what’s happened so far in the litigation, what comes next, and what’s at stake:

What is the Clean Power Plan?

The Clean Power Plan is the centerpiece of U.S. efforts to curb climate change. The Plan puts the first-ever limits on the nation’s biggest source of carbon pollution—some 1,500 coal- and gas-fired power plants that together emit nearly two billion tons per year of carbon dioxide. That’s more than a third of all U.S. climate-changing pollution and almost three times the emissions of the next ten industrial source categories combined.  

The Clean Power Plan sets emission reduction targets for coal- and gas-fired power plants based on the cost-effective emission reduction strategies already in use in the power sector.  States and power companies can choose among many ways to reach the reduction targets. States get the first option on implementation, but they may also choose to stand aside and let the Environmental Protection Agency take responsibility for regulating power plants directly. You can find an NRDC primer on how the Clean Power Plan works here.

The first pollution limits under the Clean Power Plan will take effect in 2022, more than five years from now. They will ramp up to full strength by 2030, when EPA projects power sector carbon pollution will be reduced by a third compared to 2005.  Emission reductions from the Clean Power Plan (including reductions in other dangerous pollutants) could prevent up to 3,600 premature deaths, 90,000 asthma attacks in children, and 300,000 missed work and school days each year. The public health and climate protection benefits of the Plan dwarf its costs—EPA’s analysis shows more than $50 billion in benefits per year in 2030, compared to costs under $8 billion. Households that take advantage of cost-saving energy efficiency opportunities will actually see their monthly electric bills go down. 

Power companies are well on their way to meet the Plan’s targets, thanks to the fact that the electricity industry has already started rapidly moving away from coal and towards cleaner generation—a transition driven mainly by fundamental market forces such as lower gas prices, lower costs for wind and solar power and energy efficiency, and by state and federal policies and company planning decisions that long predated the Plan.

Who is Challenging the Clean Power Plan, and Who is Defending It?                                                                    

A coalition of coal companies, big polluters in the power industry, and their political allies in mostly red states are trying everything to block the Clean Power Plan. But the public overwhelmingly supports curbs on power plant carbon pollution to protect public health and our climate, and that’s true even in the states challenging the Plan

So on the other side, a broad array of states, environmental and health groups (including NRDC), forward-looking power companies, and clean energy and high-tech firms have intervened in the case to help the Environmental Protection Agency and the Department of Justice defend the Plan. Also speaking up for the Clean Power Plan in “friend of the court” briefs are some 200 current and former members of Congress, former EPA Administrators and Secretaries of State and Defense, mayors of major cities, high-tech giants like Google, Microsoft, and Apple and many others. You can find all the briefs here.

What’s Already Been Decided?

The Clean Power Plan rests on a solid legal foundation, grounded in decisions of the Supreme Court and other courts over the last decade. 

The Plan’s challengers cannot question whether the Clean Air Act covers climate-changing air pollutants. The Supreme Court already decided that in Massachusetts v. EPA, in 2007.  The Court affirmed that Congress made it EPA’s job under the Clean Air Act to curb all kinds of dangerous air pollution, including the heat-trapping pollutants that are driving climate disruption.

The challengers cannot question whether the Clean Air Act authorizes EPA to limit carbon dioxide pollution from power plants. The Supreme Court already decided that question too in American Electric Power v. Connecticut, in 2011. There the justices held unanimously that it’s EPA’s job to regulate power plant carbon pollution under Section 111(d) of the Act—the very provision that EPA has now used to establish the Clean Power Plan.

And the challengers cannot question the science of climate change—whether power plants’ massive carbon pollution endangers our health and well-being. The Court of Appeals already upheld EPA’s “endangerment” decision, backed by overwhelming science, in Coalition for Responsible Regulation v. EPA in 2012, and the Supreme Court did not find that question worthy of review.

The Supreme Court issued a “stay” of Clean Power Plan implementation by a 5-4 vote, last February, just before the passing of Justice Antonin Scalia. The stay wasn’t a ruling on the legal merits of the Plan—only a decision to hold up implementation until the courts decide the challengers’ claims. That job now falls to the U.S. Court of Appeals in Washington. Ten judges will hear the case en banc (Chief Judge Garland has recused himself due to his nomination to the Supreme Court).

What Are the Challengers Arguing?

With EPA’s fundamental legal authority already established, the challengers are trying to defeat the Clean Power Plan by attacking how EPA has regulated power plants. They grossly misrepresent how the Plan works, and grossly exaggerate its impacts on the power sector. None of their legal arguments holds up. Here’s a quick response to their main claims.

Making the “Best System of Emission Reduction” into Almost Nothing At All

First, the challengers claim that the “best system of emission reduction”—a key statutory term—can mean nothing more than making minimal carbon pollution reductions through small improvements in generating efficiency at individual power plants. 

The Clean Power Plan, however, defines the “best system of emission reduction” more broadly, by taking advantage of flexible, cost-effective strategies that power companies already use to produce the most electricity at the least cost, and to meet current air pollution control requirements. Power plants are all interconnected in a grid that supplies exactly the amount of electricity demanded moment by moment. Power companies routinely shift generation among plants and between companies to efficiently supply the power required, and to meet pollution control requirements cost-effectively. Because the plants are interconnected, when one operates more another operates less. 

For more than two decades, power companies and grid operators have met pollution control limits for sulfur dioxide and other pollutants by ramping up cleaner generation and ramping down dirty generation, using both smokestack pollution controls and pollution reduction credits. Each individual coal plant, for example, can choose to meet the applicable emission rate limit (set in pounds of CO2 per megawatt-hour of electricity generated) by reducing its own emission rate or by acquiring emission reduction credits. The credits come from ramping up cleaner sources of generation, such as wind and solar plants, and also by ramping up generation from existing gas plants. Credits can be created within a company or acquired from another company. 

EPA determined that the combination of using of smokestack controls and pollution credits from shifting generation among plants makes up a well-demonstrated system of emission reduction, one that is widely used by the power industry both to meet internal targets and prior federal and state regulations. EPA decided that this familiar approach is the “best system of emission reduction” for each carbon-emitting plant, and the agency then set emission rate limits that can be achieved at manifestly reasonable cost. 

The challengers face a dilemma. They recognize the potential to economically reduce emissions by supplying more power from cleaner plants and less from the dirtiest ones. Indeed, the challengers asked EPA for full freedom to tap that technique to comply with the Clean Power Plan’s emission rate limits. But they insist that EPA must ignore that emission reduction potential when setting the emission standards to which industry will be held. We’re confident the court will reject this one-sided proposition.


The challengers next claim is that EPA is completely barred from limiting power plants’ dangerous carbon pollution because EPA has already used another part of the law—Section 112—to curb the same plants’ emissions of mercury and other hazardous air pollutants. This argument conflicts with the statute’s language, its history, and plain common sense: when Congress adopted the modern Clean Air Act in 1970, it intended there to be “no gaps” in protection from dangerous industrial air pollutants. Section 111(d) exists precisely to curb dangerous pollutants that are not limited under other parts of the law. The challengers argue that in 1990, Congress changed its mind, deciding to protect industries from so-called “double regulation.”  But there is no evidence for this fanciful theory that Congress abandoned its plan of comprehensive protection in 1990. And it is not “double regulation” to limit different harmful pollutants from the same source. Power plants, after all, are regulated under a half-dozen parts of the Clean Air Act. Congress did not give a free pass to some kinds of dangerous pollution simply because other kinds were controlled under another part of the law.

Uncooperative Federalism

The Clean Power Plan’s foes also claim that the Plan unconstitutionally coerces the states into reconfiguring their electricity systems. But the Clean Power Plan is textbook "cooperative federalism": EPA establishes the emission reduction targets in its emission guideline. States then have the opportunity to develop their own implementation plans. If a state chooses not to develop a plan, EPA directly regulates pollution from the power plants; EPA does not regulate the states.

The Supreme Court has repeatedly upheld the constitutionality of these cooperative federalism arrangements in laws ranging from strip mining to health care. The challengers know this, so they’ve launched an even wilder claim: that the Clean Power Plan forces states to take ancillary energy regulatory actions—for example, public utility commissions needing to decide whether to issue permits for proposed new plants, and what just and reasonable rates they may charge customers.  

But this is business as usual. States are already continuously involved in regulating these aspects of the power system, and the Clean Power Plan—with its enormous flexibility—doesn’t change any of those functions. The claim that the Plan thrusts huge new burdens on the states is based on the fiction that that the power sector is an otherwise stable and unchanging industry. Far from it:  the power industry is already engaged in a rapid transition away from coal to cleaner generation, driven by fundamental market forces such as low gas prices and low costs for renewable energy and energy efficiency. State PUCs and other agencies are already routinely engaged. The Clean Power Plan just builds on these trends; it does not mandate dramatic changes to the industry.

Indeed, the challengers’ constitutional argument wouldn’t stop at the Clean Power Plan. It would effectively block any federal safeguards against power plant air pollution, including those aimed at curbing acid rain, toxic emissions, or interstate smog violations. Why? Because like the Clean Power Plan, all of those pollution control measures lead to shifts in where power is generated, as dirty plants are phased out and cleaner ones built.  States routinely deal with the incidental regulatory questions that come with these changes, and they’ve never before alleged that they are unconstitutional burdens. 

There’s nothing different going on with the Clean Power Plan.  In reality, it reasonably requires only modest reductions of a dangerous pollutant beyond what the unregulated marketplace would accomplish on its own, and gives states tremendous planning flexibility including the ability to opt-out entirely.

What Comes Next?

Next Tuesday, both sides will present their case to the 10 judges on the Court of Appeals, in arguments expected to last at least three-and-a-half hours, and possibly much longer.  The court will likely issue its decision on the merits late this year or early in 2017. Its decision will carry weight in appeals to the Supreme Court. It may even be the final word, if the high court chooses not to take the case. 

What’s at Stake?

The Clean Power Plan is the centerpiece of U.S. action to combat climate change. It is an important component of U.S. action to meet our commitment under the historic Paris Climate Agreement, which creates a global framework to reduce carbon pollution worldwide. Progress at home is critical to U.S. leadership abroad—to gaining the confidence of other nations and securing action by all major emitters.

We are way late in starting to address climate change. The harmful impacts are already being felt here in America—more deadly heatwaves, more extreme droughts, and more intense and costly storms and flooding. Increasing temperatures combined with the harmful pollutants emitted by power plants contribute to unhealthy air quality, triggering asthma attacks and other respiratory harms. These serious public health impacts come with high costs and disproportionately affect communities of color and those in low-income neighborhoods. Severe droughts harm agriculture, and rising seas and extreme storms put communities along our coasts and rivers at special risk. And as President Obama recognized this week, climate change puts our national security at risk—it is a “threat multiplier” that fuels global instability and inflames the causes of conflict.

The Clean Power Plan is a critical step in curbing the multiple threats climate changes poses to all of us. The sooner it is upheld by the courts, the quicker we can meet and overcome the greatest environmental challenge of our time.

This post co-authored with Lissa Lynch