Federal Coercion and the EPA’s Clean Power Plan

An obscure provision of the Clean Air Act has become the basis for a sweeping effort to fight climate change. But is it constitutional?

When Congress is deadlocked on some urgent issue, such as climate change, presidents often insist that they must be able to act, even if doing so means doing things that neither Congress nor the Constitution’s drafters ever explicitly authorized. But does the danger to be salved justify the danger of departing from constitutional government?

In the case of the EPA’s new Clean Power Plan, the answer is clearly “no.” The plan requires states to reorganize their electrical power mix and electricity usage, matters that EPA has no statutory power to regulate directly, in order to eliminate the coal-fired power generation that it can regulate directly. There is debate about the plan’s constitutionality, but none whatsoever about its lack of benefits. The EPA itself admits that the plan’s utility against the threat of climate change will be so small (reducing warming by 0.016 degrees Fahrenheit over the next century) that it will be impossible to measure.

Even a trivial risk to the Constitution might seem to outweigh a trivial benefit. And the risks here are anything but trivial, worse than even the plan’s opponents have fully grasped. Harvard Law Professor Laurence Tribe, an Obama mentor, has attacked the plan, as David Graham recently explained:

Tribe argues that the rule violates the Fifth Amendment because it constitutes a regulatory "taking" by the federal government, limiting a corporation's use of its coal plants without due compensation, and that it violates the Tenth Amendment by coercing states into creating their own CO2 reduction plans or else risking the federal government imposing its own plan.

The whole scheme of cooperative federal-state regulations also raises major constitutional questions. When the EPA says to the states, in effect, “develop a plan to implement our new regulation, or we will impose a federal plan, and you won’t like it,” it is inherently coercive. But that’s the way the Clean Air Act is structured, along with a host of other federal programs. The Supreme Court, though, has thus far taken a permissive view of this de facto federal takeover of the functions of state government.

But the problems with the Clean Power Plan go deeper. Normally, when the EPA threatens to impose a federal plan, it actually has the statutory authority to do what it’s asking the states to do. The coercion (or “encouragement” as the Supreme Court prefers to call it) occurs within a field of concurrent federal-state jurisdiction. But the Clean Power Plan is missing that essential ingredient. Even the EPA admits that it has no statutory authority to impose directly the measures it’s asking states to take.

Here’s how the Clean Power Plan works. Under Section 111(d) of the Clean Air Act, the EPA is empowered to designate a “best system of emissions reduction” (or “BSER”) for facilities that emit certain pollutants. (The EPA may also face legal challenges as to whether it can even regulate carbon emissions under Section 111.) Normally, the “BSER” is a “scrubber” or some other technology that physically reduces emissions at the source facility. But the EPA’s creative lawyers have discovered almost infinite elasticity in the concept of a BSER. The agency wants to tailor them to rework each state’s mix of electric generation and consumption, matters that the Federal Power Act leaves to the states and, in a few cases, to the Federal Electrical Regulatory Commission.

The core of the Clean Power Plan is the EPA’s attempt to reduce carbon emissions at electric-generating plants. The BSER consists of four baskets, or “blocks,” of measures that states must take in order to reduce coal-fired electrical generation. These measures include costly and ambitious improvements in emissions rates from coal-fired power generation (Block 1); the replacement of coal-fired electrical generation with natural gas (Block 2) and renewable sources (Block 3); and significant limits on electricity use by consumers (Block 4). Of these, as the EPA admits, only Block 1 is something that EPA could ordinarily impose directly under the Clean Air Act.

To get around that, the EPA is requiring states to develop plans for implementing the BSER, subject to its approval. If states don’t file approvable plans, then the EPA is required to file a federal plan. And here’s the constitutional problem: The EPA does not have, and does not claim, the authority to do under a federal plan what it’s asking states to do under their own plans.

So the EPA has given itself an out, in the form of an “alternative approach” to the BSER. The proposed regulation states that under this "alternative approach":

[B]locks 2, 3, and 4 would not be components of the system of emissions reduction but instead would serve as bases for quantifying the reduced generation (and therefore emissions) at the affected [Electrical Generating Units], and assuring that the amount of reduced generation meets the criteria for the ‘best’ system that is ‘adequately demonstrated’ because, among other things, the reduced generation can be achieved while the demand for electricity services can continue to be met in a reliable and affordable manner.

There is a remarkable power-grab hidden inside this nearly unintelligible piece of legalese. This “alternative approach” would allow the EPA to shut down the same amount of coal-fired power generation that could be shut down under an approvable state plan, even if the state declines to file such a plan. It would still be a valid BSER, according to the EPA, because the existence of a BSER for “state plans” establishes that “demand for electricity services can continue to be met in a reliable and affordable manner.” If the same amount of coal power is simply shut down under a federal plan, states can always make up the lost demand by implementing the BSER on their own.

In other words, if a state doesn’t willingly adopt a host of measures that the EPA has no authority to impose on its own, the EPA will simply shut down a large fraction of that state’s electrical generation. And then, in order to continue meeting the demand for electricity, states will have to adopt those very measures anyway. This is the devil in the details of the Clean Power Plan: States have to implement the BSER required of a “state plan” whether they file a “state plan” or let the EPA impose a federal one. Their choice is not between a state plan and a federal plan, but rather between potentially skyrocketing electric rates, and a potentially catastrophic disruption of electrical generation that could leave cities and whole regions in total darkness.

The EPA is probably bluffing. It would probably try to implement any shutdowns incrementally, targeting the coal plants it sees as the worst offenders, in regions where alternative sources of electricity are readily available. But none of that changes the constitutional implications, which pose significant risks to the federal structure of the Constitution, the principle enshrined in the Tenth Amendment.

Chris Baltimore / Reuters

In New York v. United States, the Supreme Court held that “a choice between two unconstitutionally coercive regulatory techniques is no choice at all. Either way, the Act commandeers the legislative processes of the States by directly compelling them to enact and enforce a federal regulatory program, an outcome that has never been understood to lie within the authority conferred upon Congress by the Constitution.” In this case, the compulsion is not direct, but it is no less compelling.

In a recent Politico column, law professors Jody Freeman and Richard J. Lazarus, leading proponents of the Clean Power Plan, claimed that the Tenth Amendment argument is “a non-starter”:

The 10th Amendment protects the states from being forced to use their institutions to implement federal requirements. But the EPA’s federal implementation plan will require only that power plants meet their targets. It will not force the states themselves to do anything.

The rule may not legally require states to do anything, but it certainly does force them to do a lot of things. The Supreme Court draws a line between those forms of federal coercion that it considers “mere encouragement” and those that amount to a “gun to the head.” And the implied coercive threat of leaving states unable to meet their needs for electricity might well lead federal courts to find “a gun to the head” of state governments in the EPA’s proposal. It’s not for nothing that even the reddest of states are busy figuring out how to protect their citizens—and not just their coal-fired power plants—from the consequences of the rule.

One thing the plan’s proponents are losing sight of is the fact that Congress considered, and rejected, the president’s cap-and-trade scheme, notwithstanding Democratic supermajorities in both chambers. The EPA has now figured how to impose it anyway, turning one of the most obscure and little-used provisions of the Clean Air Act one of the most ambitious regulations in the history of the administrative state.  

Congress has arguably empowered the president to take those very liberties, through excessive delegations of legislative authority to executive agencies. In 1984 the Supreme Court expanded that delegation almost beyond democratic control with its decision in Chevron v. NRDC, which established near-absolute deference to an executive agency’s interpretations of its own enabling statute—even when the result is to aggrandize the agency’s own power.

Chevron has opened the door to a kind of government that defenders of the EPA may regret—particularly if the other side wins the White House and resorts to the same tactics, pushing through its agenda despite opposition from a congressional majority or even supermajority, so long as the president can maintain 34 votes in the Senate. In the meantime, perhaps the Clean Power Plan will have one important benefit from its detractors’ point of view, in demonstrating the very real dangers of absolute deference to executive power.