The Ayres Law Group

Climate Policy in the Trump Administration

The Obama Administration adopted a number of greenhouse gas (GHG) regulations and policies that the incoming Trump Administration may seek to reverse. While the transition team has said little about exactly which regulations are on the chopping block, Trump has vowed to repeal the Clean Power Plan, President Obama’s marquee climate regulation that requires states to devise plans for reducing GHG emissions from existing power plants.

Beyond Trump’s promise to roll back the Clean Power Plan, the future of U.S. climate regulation and policy is extremely uncertain. While it appears that there will be a major effort to undo many regulations, and there are opportunities to do so, as we describe below, it remains to be seen whether and how the new Administration will fully implement that effort. The focus of this Policy Alert is the possible activity in all three branches of government that could shift climate policy over the next four years.

Factors That Will Affect Any Effort to Roll Back Regulations

The Trump Administration’s chances of succeeding with any of the initiatives described below will depend on several overarching factors:

• Whether Democrats succeed in drawing out confirmation fights over some of Trump’s appointments, particularly Attorney General nominee Jeff Sessions and EPA Administrator nominee Scott Pruitt. A delay in either confirmation of a month or two would probably prevent the Administration from proposing or adopting its policies until the spring of 2017.
• Whether the U.S. Court of Appeals for the D.C. Circuit issues an opinion in the Clean Power Plan case before Sessions and Pruitt are in command of their agencies;
• The composition of the D.C. Circuit, which currently has more appointees of Democratic presidents than Republican;
• The degree to which Democrats in the Senate focus their attention on environmental issues;
• The degree to which Republican Senators conclude that the political cost of attacking environmental regulations is too high; and
• Congress’s ability to concentrate on environmental issues, in light of competing policy priorities.

Regardless of the current fervor from congressional Republicans for cutting environmental regulations, these factors might fan Republicans’ desire to take action, or drastically reduce the attractiveness of doing so. Cutting environmental regulations speaks to the majority party’s industrialist base, but might not play as well with large segments of Trump’s voters. Polls suggest that repealing environmental regulations may not be the kind of change they voted for. Assuming the Administration continues to focus on environmental requirements, below are some initiatives it might be likely to take.

Executive Actions

Because the President has direct control over the Executive Branch, let us begin there. The Trump EPA could seek to reverse the Obama climate policies through any of the following:

1. Embark on the process to reverse the so-called “endangerment finding,” which forms the basis for EPA’s greenhouse gas regulations. That would require public notice and opportunity for comment, just as is required for promulgation of a new regulation, and would face the added challenge of potentially being at odds with the Supreme Court’s decision in Massachusetts v. EPA;
2. Revise or rescind each of the several EPA climate regulations one-by-one. Again, notice and comment procedures and a new record supporting the decision would be required;
3. As requested by the Petitioner-States challenging the Clean Power Plan, President Trump could issue an executive order on day one of the Administration stating its view that the rule is unlawful and that EPA lacks authority to enforce it. Such an order would send a clear signal that the Administration plans to abandon the rule. Actually rescinding the rule, however, would require notice and comment rulemaking.

Any of these deregulatory actions would no doubt be met with litigation from States, environmental organizations, and some industries, creating additional uncertainty over short-term U.S. climate policy.

The U.S. is a party to the Paris Agreement, which entered into force on October 5, 2016, committing the U.S. to reduce greenhouse gas emissions by 26 to 28% below 2005 levels by 2025. The U.S. could effectively abandon this commitment without also formally exiting the Agreement. The Agreement lacks a mechanism to compel parties to meet its commitments, so the Administration could simply stall the programs put in place to achieve the target emissions reductions. However, most analysts agree that the U.S. is on track to achieve the large majority of these reductions based on industry fuel cost trends that will not be reversed by a change in federal climate policy.

At the Department of the Interior, the next Secretary could reverse the existing Secretarial Order halting new leases of coal from federal lands until the completion of a programmatic environmental review under the National Environmental Policy Act (NEPA). Such an action is likely to have little practical effect because, as noted above, the electricity sector’s shift from coal to gas and renewable energy is largely owing to reasons other than the federal coal leasing moratorium.

Trump’s White House Council on Environmental Quality may abandon its NEPA guidance concerning federal agencies’ analysis of greenhouse gas emissions in NEPA-required environmental reviews. Recent court decisions, however, require agencies to consider greenhouse gas emissions in certain NEPA reviews, so eliminating the guidance will not relieve agencies of the obligation to consider the climate change impacts of their actions. And it will likely result in an increasing amount of NEPA litigation over the issue.

Lastly, a Trump Administration could order its agencies to stop using the social cost of carbon (SCC), an interagency estimate prepared during the Obama Administration, in their cost-benefit analysis for new rules. Court decisions have required that agencies quantify the benefits from reducing GHG emissions, but they have left the agencies discretion as to whether to use the SCC. Courts will probably continue to require quantitative measures of the costs associated with GHGs in NEPA statements, whether by use of the SCC or some other quantification tool.

Congress

In Congress, the Republican majority will have the opportunity to take a number of actions that could alter existing climate policy. Amendments to the major environmental statutes would be subject to Democratic filibuster in the Senate. One possibility is legislation to amend the Clean Air Act and overturn the Supreme Court’s decision in Massachusetts v. EPA by stripping EPA of its authority to regulate greenhouse gases as air pollutants under the Act. Doing so could overturn many greenhouse gas regulations promulgated by EPA in one fell swoop. However, this approach seems unlikely to succeed against a filibuster from the Senate Democrats. It might also open the door to additional proposed amendments to the Act that would make passage more difficult.

The Congressional Review Act (CRA) could be used to nullify more recent greenhouse gas regulations (those promulgated after roughly mid-May, 2016), such as new source performance standards for new fossil fuel-fired power plants, with a simple majority (51 votes in the Senate) in both houses. Doing so would require floor time, which is in high demand given the full legislative agenda for this session, but reversing President Obama’s climate policy appears to be enough of a priority for the incoming administration that CRA action on at least some regulations is a real possibility. The Clean Power Plan has been in place too long to be subject to reversal under the Congressional Review Act, so it could be changed only by new legislation or adopting a new rule, as described above.

Congress seems likely to reduce or eliminate funding for EPA’s greenhouse-gas related regulations or programs, which could significantly slow or even halt implementation of existing rules.

Courts

The case to watch, of course, is the challenge to the Clean Power Plan rule pending before the U.S. Court of Appeals for the D.C. Circuit. In February 2016, the Supreme Court took the unprecedented step of staying the rule, prior to any hearing on the merits. The D.C. Circuit heard oral argument on the merits in September 2016. Prior to the election, it was widely expected that the court might issue its ruling in early 2017. Now it seems increasingly likely that the court will not decide until after President-elect Trump is inaugurated.

The Trump team at EPA cannot begin making litigation decisions until a new Attorney General and an EPA Administrator and Assistant Administrators are confirmed by the Congress. Given the controversial Trump appointments to head EPA and the Department of Justice (DOJ), a court decision seems likely before the confirmation process is complete. Of course, the new Administration might seek review of the Circuit Court decision in the Supreme Court (see below).

If no court decision has been issued before the Trump team is in place at EPA and DOJ, they can be expected to ask the court to remand the rule so that EPA can consider changes—a request that would likely be granted. In that scenario, the Supreme Court’s current stay would be lifted, and the existing rule would remain in effect until EPA replaced it, a process that would take at least two years. In the meantime, EPA would likely then give states much flexibility in meeting the requirements for state plan submissions, if indeed the agency required submission of plans at all. (The sufficiency of those plans under EPA’s existing Clean Power Plan guidelines could be challenged in court, but a replacement rule could be finalized not long after such cases might be filed, making them moot.)

The Trump Administration might also move to put the case in abeyance, which would keep the stay in place while EPA revises the rule. Given that the case has already been briefed and argued, and the drafting of an opinion is underway, such a motion seems unlikely to succeed.

If the D.C. Circuit were to issue a decision upholding the Clean Power Plan, and the Trump EPA sought review by the Supreme Court, parties currently defending the rule (states, environmental and public health organizations, and advanced energy companies) would likely continue to do so. Assuming at least one party files a petition for a writ of certiorari, the Supreme Court will first have to determine whether to take the case, which requires the favorable votes of just four Justices. The stay issued by the current Supreme Court would remain in place until the Court either rejected the petition for certiorari, or issued its own ruling.

The Supreme Court might review the case with the current eight Justices or with nine (assuming President Trump’s pick for the Court has been confirmed by the time the case comes before the Court). Either way, Justice Kennedy would apparently be the Court’s swing vote. While he voted for the current stay, Justice Kennedy has voted to uphold major EPA climate rules in the past.

Any new regulations promulgated by the Trump EPA, even if they are replacements for existing regulations, will require the building of a record justifying the agency’s decision to change course. Actions revising or rescinding existing EPA rules will be subject to the same arbitrary and capricious standard of review as other rulemaking actions. Some caselaw suggests that the agency may have a higher hurdle to clear when it is reversing course, as opposed to taking action for the first time on a particular issue.

While we await clarity on the particularities of the Trump Administration’s actions with respect to climate policy, it is certain that in most cases those actions cannot be taken with a mere stroke of the pen, and that the courts will ultimately scrutinize the legal foundation for those actions.

—Richard Ayres, Jessica Olson

FOR ADDITIONAL INFORMATION
Ayres Law Group LLP represents a broad array of clients in the public and private sectors in high-stakes environmental law and policy matters. ALG uses its extensive experience in the legislative, administrative, and federal judicial process to solve clients' problems. We closely monitor developments in the Courts, Congress, and the Executive Branch with respect to air pollution control, climate change, and energy. If you would like more information about how we can help your organization in any of these areas, please contact us at (202) 452-9200.

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