The Rise and Fall of Clean Air Act Climate Policy

In this issue of Resources, we’ve introduced a new feature called “Viewpoint,” which gives an economist or climate researcher the opportunity to provide a new perspective on an important topic. Here, we’re offering the floor to Nathan Richardson, who shares his view on whether the Clean Air Act can be a vehicle for climate policy.

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Add the most important environmental case to one of the most successful environmental statutes, and you get a powerful and effective means of cutting emissions—or so it was hoped.

The Clean Air Act (CAA) is among the most successful statutes in American law, directly responsible for major improvements in health and welfare over the 50 years of its existence in its modern form. As RFF’s Dallas Burtraw and UCLA’s Ann Carlson have noted with their book Lessons from the Clean Air Act, its durability, flexibility, and adaptability have made the CAA an enduring example of successful legislation in an era when such examples are few and far between.

The Supreme Court’s 2007 decision in Massachusetts v. EPA was almost immediately hailed as among the most important environmental decisions of all time. That reputation persists more than a decade later; one of the nation’s leading environmental law professors has just written a book (Richard Lazarus’s The Rule of Five: Making Climate History at the Supreme Court), which presents a behind-the-scenes account of the case. Massachusetts primarily did one thing: it brought the CAA to bear on the most pressing environmental problem of our time—climate change. (It did a lot of other things, too, in many areas of law, but the CAA’s relevance to climate is the core environmental holding.) Maybe it wasn’t the first, best way to do it, but with Congress unwilling to pass comprehensive climate legislation, the CAA would do just fine.

And so it seemed, through most of the Obama administration. Building on Massachusetts, the Obama-era EPA assembled the most significant federal carbon emissions reduction program ever—by a wide margin—from a collection of regulatory actions under the CAA. While the twin centerpieces were a series of rules that set stringent fuel economy standards for road vehicles, along with the Clean Power Plan, which aimed at reducing carbon emissions from fossil fuel power plants, the Obama-era EPA made many smaller regulatory moves aimed at limiting emissions from smaller sectors like oil and gas wells and refrigerants. Some of these rules were painfully slow to be finalized and implemented, and some critics called them insufficiently ambitious. But, taken together, they promised to reduce greenhouse gas emissions more than anything else the federal government had ever done, and to lay a firm, durable foundation for future action.

That’s what I and many others thought at the time, at least. I’ve spent much of the last ten years thinking and writing about how climate policy could fit within the CAA. And I still think the rules could have succeeded in the long term. But I don’t make the calls on environmental law. Ultimately, the president and the Supreme Court do.

Now, five years after the Clean Power Plan was finalized, little remains of CAA climate regulation. Some of its rules never went into effect. The Clean Power Plan had not cut one single ton of emissions before it was halted by litigation and replaced by the Trump-era EPA’s far weaker Affordable Clean Energy rule. The Trump-era EPA has rolled back other rules, including most of the fuel economy standards, or is in the process of doing so. Many of these rollbacks are being litigated—and the Trump administration has a poor record in administrative law cases, in which courts are typically quite deferential to the government. But, at least right now, it appears that (unlike previous CAA programs) climate regulations have not been durable in the face of a successor administration that’s skeptical of their value.

Critics of the Trump administration may blame its norm-breaking tendencies and climate skepticism for stunting the progress of a promising climate policy program—calling out Trump as the outlier that has led to recent failures of CAA policy, not anything about the climate issue itself or its compatibility with the CAA. Surely those norm-breaking instincts, and the transformation of climate into a polarized political issue over the last 10 years, are important factors. But as I argue in a paper (forthcoming in the Michigan Journal of Environmental and Administrative Law), an at least equally important cause is the Supreme Court’s undercutting of its own decision in Massachusetts, which has encouraged and effectively given license to rollbacks of climate regulations.

Some Supreme Court justices never accepted Massachusetts as settled law, consistently calling for its reconsideration. While it has not been overruled, the case was substantially undermined by the Utility Air Regulatory Group v. EPA (UARG) decision in 2014. Skilled tactical maneuvering by Chief Justice Roberts allowed him to assign the majority opinion to Justice Scalia, the author of the dissent in Massachusetts. The resulting UARG majority opinion eroded Massachusetts’s foundations without (at least openly) disturbing it; but in the Harvard Environmental Law Review, Jody Freeman described UARG as “laced with the legal equivalent of improvised explosive devices.” The Supreme Court continued by halting the Clean Power Plan before lower courts had considered it—an unprecedented move. The addition of Justices Gorsuch and Kavanaugh to the Supreme Court has likely further reduced its willingness to countenance meaningful climate policy under the CAA, particularly because the latter replaced Justice Kennedy, the swing vote in Massachusetts.

This trend on the Supreme Court is not (or at least not just) driven by a desire by some justices to undo Massachusetts, or by an antipathy toward EPA or climate policy specifically. Instead, CAA climate policy has been drawn into and become a vehicle for a wider anti-administrative turn on the Supreme Court, with a majority increasingly skeptical of regulatory authority.

The result is that, in my view, the CAA can no longer be considered a reliable and effective vehicle for broad climate policy. Regulations beyond standards for new vehicles are unlikely to survive court challenge, and any regulations (including vehicle rules) appear vulnerable to rollback by a future president, more so than other environmental rules.

As has been true for decades now, comprehensive federal climate change legislation from Congress is probably needed for enduring and effective policy (whether that’s a carbon tax, policies associated with the Green New Deal, or something else). Consistent failure of Congress to act has led some to rely on state and local governments or the private sector. But federal action is necessary in the long run. If Congress will not act, a future president forced to act alone cannot (in my view) rely on the CAA, as former President Obama did. CAA vehicle standards remain a tool in the box so long as Massachusetts is not overturned, but they can’t do the job alone. A Clean Power Plan 2.0 (for example) is likely to be a waste of administrative resources and political capital. Other presidential moves (none based on CAA authority), like halting fossil fuel extraction on federal lands, border carbon tariffs, using FERC authority over electric power system operators, or even assertion of emergency powers, could be considered. But as the CAA experience over the last few years illustrates, an enduring and comprehensive climate policy will likely only be achieved through legislative (and, before that, political) means, not through any creative use of existing executive power—even powers as durable, flexible, and adaptable as the CAA. To put the same thing differently, meaningful progress on climate is in my view no longer a legal question, but a political one. Maybe it always was.