The Legal Basis for the 111(d) Rules

by Daniel Farber

June 02, 2014

Megan Herzog has done a great job of explaining the background of the rules and summarizing the proposal in her blog posts.  I just wanted to add a quick note about how EPA has structured its rules in light of possible legal challenges.  The fundamental issue facing EPA is how to define the “best system” for reducing carbon emissions.  Is it limited to technological upgrades at individual emitters?  Or can it be broader, and if so, how broad?  Industry is sure to argue that EPA can only set standards for individual plants that emit carbon, nothing more.

EPA responds to this argument in two ways.  First, as Megan notes, states can use measures drawn from four “building blocks” — reductions at individual emitters, trading with other emitters, use of renewable energy, and energy efficiency.  The first block corresponds to industry’s interpretation of the law.  The second block is a bit broader, but the Supreme Court’s recent decision in EME Homer strongly supports its legality.  So EPA asks for comment on the possibility of using only the first two blocks.  It might decide to take this option, I suspect, if it loses really badly in a case currently pending before the Supreme Court, since that might be a signal of how the Court will approach these regulations.  In any event, EPA is also making the building blocks legally severable, so that in the worst scenario it still has building block 1 in place even if it loses everything else.

Second, EPA has structured the emissions goals in a way that undercuts the distinction between “inside the fence” and “outside the fence” emissions reductions.  The state goals are set as emission rates for fossil-fuel fired plants (on a statewide basis).  The initial rate is set based on the first two blocks, but then the state gets to count avoided emissions through use of new renewables or energy efficiency as part of the plants’ output.  Essentially, this counts emissions that are avoided through reduced plant utilization as part of a plant’s compliance.  States are given the option of simply translating the emissions goals into a limit on the total mass of carbon emitted by its generators. In short, the goal is measured through the output and emissions of fossil-fuel plants, which they can essentially meet either by cutting back on carbon emissions per megawatt or by reducing their number of megawatts.  The result is to deconstruct the significance of the “fence line” as a way of thinking about the program.

Overall, EPA seems to have done as good a job as possible of insulating the proposed rules from fundamental legal attack.  That doesn’t guarantee success, of course.  We’ll know more about the Supreme Court’s attitude when it decides the current case.  It will be a bad sign if it strikes down all of the PSD rule that it is considering, whereas if it upholds even part of that rule it will be a helpful indication for EPA.

This blog is cross-posted on Legal Planet.

Be the first to comment on this entry.
We ask for your email address so that we may follow up with you, ask you to clarify your comment in some way, or perhaps alert you to someone else's response. Only the name you supply and your comment will be displayed on the site to the public. Our blog is a forum for the exchange of ideas, and we hope to foster intelligent, interesting and respectful discussion. We do not apply an ideological screen, however, we reserve the right to remove blog posts we deem inappropriate for any reason, but particularly for language that we deem to be in the nature of a personal attack or otherwise offensive. If we remove a comment you've posted, and you want to know why, ask us ( and we will tell you. If you see a post you regard as offensive, please let us know.

Also from Daniel Farber

Daniel A. Farber is the Sho Sato Professor of Law, Director of the California Center for Environmental Law and Policy, and Chair, Energy & Resources Group, University of California, Berkeley.

Promoting Energy Innovation

Farber | Apr 13, 2018 | Energy

Climate Change in the Courts

Farber | Apr 02, 2018 | Climate Change

Trump, EPA, and the Anti-Regulatory State

Farber | Jan 25, 2018 | Environmental Policy

The Off-Switch Is Inside the Fenceline

Farber | Dec 27, 2017 | Energy

Looking Back on Lucas

Farber | Dec 11, 2017 | Regulatory Policy

The Center for Progressive Reform

455 Massachusetts Ave., NW, #150-513
Washington, DC 20001

© Center for Progressive Reform, 2015