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EPA’s Greenhouse Gases Regulation Meets Federalism

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Under the Constitution, states have no right to “interpose”—that is, to block the enforcement of supreme, validly enacted federal law. However, with the arguable exception of the judges in each state, state officials are under no obligation to execute an affirmative federal command issued to them. They cannot be ordered to accept federal funds or to establish an exchange. The ACA illustrates the salutary force of this constitutional precept: grand federal schemes gang aft agley. The next big illustration could and hopefully will be the regulation of greenhouse gases under section 111(d) of the Clean Air Act (CAA), coming very soon in this theater.

111(d) is a bit of a statutory mouse hole: over the last forty years, the EPA has used it very rarely, and always to regulate particular emissions from particular sources (for example, gases from municipal solid waste landfills). However, under a rule  proposed this past June, the EPA is planning to “transform” the nation’s entire energy industry, the better to reduce carbon emissions and thus to save the planet. This is the U.S. version of Germany’s fabled Energiewende, which has “turned the entire German energy industry into a quasi-planned economy” and produced windmill parks in the North Sea and fantastically higher energy prices, for no known benefit (it has increased carbon emissions).

The EPA does not propose to do this on its own, any more than the Kremlin tried to produce its own shoes. Rather, in keeping with the “cooperative” federalism of the CAA and Sec 111(d) in particular, it will set a carbon “goal,” i.e. a cap, for each state. Each state is then expected to submit a plan for achieving the goal. States may close coal-fired plans or improve their efficiency (with technologies that do not exist); make lower-carbon facilities operate at higher loads; compel the use of low- or zero-carbon energy; or adopt “outside the fence” measures such as improving the grid or introducing demand-side energy management. (By the time the voters discover that the demand side includes them, it’ll be too late. They are known to be stupid.) Once the EPA approves the state plan, the requirements contained therein become federally enforceable against the regulated entities.

What happens when a state fails to submit a plan that meets with the EPA’s approval? A team of Troutman Sanders attorneys (Peter S. Glaser, Carroll W. McGuffey, III, & Hahnah Williams Gaines) have examined the question in a very informative Federalist Society White Paper. The first-cut answer is that if a state fails to submit an adequate plan, the EPA must establish a plan for that state (hence, cooperative federalism). However, unlike other CAA programs, the Section 111(d) “partnership” (EPA’s term) does not contemplate the imposition of sanctions, such as a withdrawal of federal highway funds. So a federal plan it is.

And that will not work. The EPA desperately needs the states, for three reasons:

  • EPA manifestly lacks legal authority to impose many of the requirements it expects states to impose, especially the “outside the fence” stuff.
  • EPA does not want to be held responsible for the harsh measures and idiotic consequences that are sure to follow from its caps; it wants state officials to hold that particular bag.
  • EPA lacks the administrative capacity to design, let alone implement and enforce, plans for more than a few—very few—states.

The EPA’s proposed rule reflects a two-pronged strategy to obtain state cooperation. First, the agency promises states a ton of “flexibility.” Second, the EPA relies on energy companies and other industries to lean on states to come up with a plan, lest life become very unpleasant for those companies. This is called “consultation with stakeholders,” of which the EPA has done a lot. The threat need not be stated because everyone understands the game.

How to respond? States have to decide now. The EPA expects to finalize the rule by June 2015. A deadline of June 30, 2016, for states to submit their state plans is contained in a Presidential Memorandum, issued pursuant to an agreement with Mr. Xi Jinping and the president’s authority as commander in chief over the U.S. economy and the ocean tides. (Just kidding. The president needs no authority to write memos.) The EPA, too, is proposing that each state must submit a plan to the EPA by June 30, 2016, with limited exceptions; and unlike a presidential memo, that rule will have legal effect. While the final rule will be challenged the minute it appears in the Federal Register, states seriously aiming to cooperate will have to act as if the rule will survive legal challenge. Compliant plans will be hugely complex; most will require multiple pieces of state legislation. So again: what should states do before June 2016, starting right now?

Answer: nothing, or close to it. Maybe prepare the briefs for the 111(d) litigation (which basically write themselves). And maybe one more thing: governors and attorneys general from, say, a dozen-plus states could pre-commit, however informally, to jointly saying “no.” EPA’s finely wrought carbon plan would go up in smoke. Efforts to implement it would make the ACA’s implementation look smooth by comparison.

To facilitate such fruitful cooperation, herewith a draft letter from state officials to EPA:

Dear Mrs. McCarthy:

Thank you for consulting with us on the 111(d) business. Pursuant to excellent suggestions contained in your proposed rule, we (undersigned state officials) have consulted with each other. We have come to the unanimous conclusion that our state air quality officials are unqualified to undertake the planetary tasks contemplated by your proposal. We have therefore closed their offices and assigned those valued employees to more manageable undertakings, such as air conditioner repair.

We certainly hope that your non-discretionary duty to design, impose, and enforce a federal 111(d) plan will take you or your colleagues to our beautiful state. Due to the aforementioned personnel decision, you will find no one to assist in the performance of your statutory obligations. However, we will be delighted to recommend local attractions and to buy you a cup of coffee.

Have a nice day.

Reader Discussion

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.

on November 24, 2014 at 09:28:55 am

Wow! Give us more of the same to get the government out of the lives of individuals, but I fear you might be too late. The American people have been blinded by education in stupidity, mass media distractions and out right lies, and self-serving politicians as well as corporate entities bent on the bottom line, never thinking or looking ahead as to the effect of the final end.

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Image of dr. james willingham
dr. james willingham
on November 24, 2014 at 13:44:38 pm

Michael:

Re: that wonderful letter

I suspect that we are too "stupid" to write it.
Readers may take that any way they so desire.

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Image of gabe
gabe
on November 24, 2014 at 15:11:48 pm

"EPA manifestly lacks legal authority to impose many of the requirements it expects states to impose, especially the “outside the fence” stuff."

The federal government can create laws any number of ways within or without the four corners of the Constitution. One "within" way would be through an international treaty addressing carbon emissions. The many "without" ways are discussed at length in this forum. Those way generally involve getting the voting majority of the population to look the other way while the feds ignore the Constitution. The easiest way is to promise money for the poor if they overlook the Constitution. Expect promises that money will be redistributed from the wealthy to the poor for having to give up so much to save the Earth. Expect the usual plan that will in reality redistribute money from the middle class to the wealthy, and not do anything useful for the Earth.

"EPA does not want to be held responsible for the harsh measures and idiotic consequences that are sure to follow from its caps; it wants state officials to hold that particular bag."

Actually the federal legislators will get to hold the bag. When the states want to create welfare programs and have someone else to blame for the inevitable consequences, they give it to the national representatives to implement at the national level. That way the local politicians get the program and they get to have someone else to point the finger of blame at when the bill comes. Someone else's national legislator will be more than happy to take credit for making America a nicer place to live. Someone else's legislator will be some manipulative slimebag from the other side of the aisle who should be run out of office, unlike our representative who will have been taken advantage of by the system (and who will received handsome and well deserved campaign donations for their noble efforts in fighting the nasty program).

"EPA lacks the administrative capacity to design, let alone implement and enforce, plans for more than a few—very few—states."

Oh, my! You mean the EPA would need more unionized staff!? And highly paid consultants and contractors!? And money!? Uhm, sorry. I got momentarily distracted. What was the point again?

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Image of Scott Amorian
Scott Amorian
on November 25, 2014 at 12:27:50 pm

It will be interesting to see if the EPA will run up against Arizona's Prop 122. It allows the state to withhold its resources in cases of Federal law it considers unconstitutional. Maybe I'll send a copy of Philip Hamburger's new book on administrative law.to my state representative.

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Image of JD Bryant
JD Bryant
on November 25, 2014 at 22:32:28 pm

I have a brother in law struggling to keep a power co-op working. I think after hearing of his troubles that this is an excellent idea!

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Image of Doug Brockman
Doug Brockman
on December 08, 2014 at 10:59:21 am

[…] a bit of clarification. As noted by the Library of Law and Liberty, the EPA will not simply impose these new rules on the country – because it […]

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Image of How the several States can fight Obama's EPA
How the several States can fight Obama's EPA

Law & Liberty welcomes civil and lively discussion of its articles. Abusive comments will not be tolerated. We reserve the right to delete comments - or ban users - without notification or explanation.