Waxman Markey, the Clean Air Act and State Climate Legislation

As I suggested last week, the prospects for the Waxman-Markey bill passing Congress this term don’t seem particularly high.  President Obama is expending significant political capital on health care reform.  The Senate is occupied with the Sotomayor Supreme Court hearings.  And the politics of climate legislation may be even tougher in the Senate than in the House.

All is not lost, however.  Groundwork laid by states and environmental groups during the long years of climate inaction by the Bush Administration means that stalement in Congress doesn’t mean a complete lack of progress on reducing greenhouse gas emissions.  Take the Obama Administration announcement that the federal government will adopt a combined CAFE standard and greenhouse gas emissions reductions for automobiles for model year cars 2012-2016.  The agreement is the direct result of California’s greenhouse gas emissions standards, which form the basis for the new national standards. Moreover California and the 13 states that are following its lead can issue greenhouse gas emissions standards sooner than the federal standards now that the state has been granted a waiver allowing it to go forward.

The national standards and approval of the California waiver are the most concrete federal actions to date but more action could come.  Because states and environmental groups sued the federal EPA in Massachusetts v. EPA, the federal government has now issued a finding under the Clean Air Act that greenhouse gases endanger public health and welfare.  Though it is unclear what regulatory action will follow, the EPA may begin regulating the emissions of ocean-going  vessels; issue New Source Performance Standards for large greenhouse gas emitters like new coal-fired power plants; and even issue a National Ambient Air Quality Standard for carbon dioxide and other greenhouse gases (see Holly’s article on Clean Air Act regulation of greenhouse gas emissions here).  Such regulatory efforts would surely be controversial and put added pressure on Congress to enact climate change legislation that would remove greenhouse gases from the Clean Air Act while replacing CAA regulation with something like what is proposed in Waxman Markey.   The Obama Administration also has to contend with continuing litigation over how the Endangered Species Act should deal with climate change and a Clean Water Act petition about ocean acidification resulting from increased absorption of carbon dioxide.

Meanwhile, states continue with their efforts to regulate greenhouse gas emissions.  The Regional Greenhouse Gas Initiative — which imposes a cap and trade scheme on utilities for their carbon dioxide emissions — is up and running.  California’s Air Resources Board is hard at work implementing AB 32, which rolls back the state’s total emissions to 1990 rates by 2020.  A consortium of western states and Canadian provinces is at work developing the Western Climate Initiative to implement a region-wide cap and trade system.  And midwestern states are busy designing their own climate strategy.  All of this activity at the state level may have industry begging Congress to pass uniform federal legislation.

It is easy to view all these efforts as beside the point as we await the passage of  a federal bill.  But the litigation and successful state efforts serve two important purposes:  they provide a real alternative to a federal bill if Congress fails to act; and they put pressure on Congress to come up with an alternative to regualtory efforts that industry doesn’t like.  It’s interesting to note that a strategy aimed largely at the Bush Administration’s inaction may begin to bear serious fruit under his Democratic successor.

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Reader Comments

3 Replies to “Waxman Markey, the Clean Air Act and State Climate Legislation”

  1. Excellent summary. Greenhouse gas emissions from oceangoing vessels are much higher than most people realize and are not covered by the recent amendments to MARPOL, the international treaty on ship emissions.

  2. Ann said:

    “…Groundwork laid by states and environmental groups during the long years of climate inaction by the Bush Administration means that stalement in Congress doesn’t mean a complete lack of progress on reducing greenhouse gas emissions…”

    Dear Ann;
    While it is reasonable to give some credit to the Bush Administration for its scrutiny of climate change, we should also remember that thousands of ordinary citizens, engineers, scientists, teachers, and others have made significant contributions by successfully challenging and exposing the scientific inaccuracies, political propaganda, fear tactics, and economic risks surrounding the climate change issue.

    We should not underestimate the impact of these efforts on the current debate over Waxman-Markey.

  3. The basic federalist theory of the Clean Air Act and the Clean Water Act is that states, to the extent that they are delegated authority to enforce these laws, are required at least to meet federal minimum standards but retain authority (and responsibility) to do more.

    Your article notes that state efforts and the specter of additional EPA regulation of GHG emissions under Obama have provided some effective pressure toward adoption by Congress of legislation that is more acceptable to industry than piecemeal regulation under the CAA.

    The question remains whether W-M is more likely effective at limiting climate forcing emissions than fuller exercise by EPA and the states of their available authorities under the CAA and retained state power.

    One little discussed problematic aspect of the trading system under W-M is that it threatens to nullify potentially beneficial climate effects of federal regulation and complementary state action. Such regulation and action, by lowering emissions that sources otherwise would need to cover with allowances that they purchase or already retain, in effect increases allowance supply and, so, lowers the price for emissions by entities not subject to the federal or state restriction. Coal-reliant electricity providers are likely to be the largest beneficiaries.

    Thus, the formal retention of some limited CAA authority by EPA and the states to restrict climate forcing emissions may prove illusory in practice under the W-M trading scheme.

    There are methods available to correct this large design flaw, which a colleague, Ken Johnson, and I have termed a problem of additionality. See: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1421947

    But, W-M has not yet adopted them in any meaningful way.

    A substantial legal analysis along these lines would be very useful, if soon done, because it is not only the express preemption provisions of W-M that undermine EPA’s CAA authority and the retained authority of the states. It is also the interactive effects of the trading system that impair the effect of federal and state action. These latter could undermine the fundamental impetus for such additional or complementary action.

    The US contribution to climate change mitigation, then, essentially would begin and end with W-M, and for many reasons that is unlikely to be enough.

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Ann Carlson

Ann Carlson is the Shirley Shapiro Professor of Environmental Law and the co-Faculty Director of the Emmett Institute on Climate Change and the Environment at UCLA School…

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