How Undemocratic Is EPA’s Clean Power Plan?

EPA’s Clean Power Plan, its carbon “pollution” rule for existing power plants, proposes carbon dioxide (CO2) emission reduction targets that states can meet only by enacting (or tightening) three of the four main climate policies contained in H.R. 2454, the American Clean Energy and Security Act of 2009, popularly (or unpopularly) known as Waxman-Markey. Those policies are: cap-and-trade, renewable energy quota, and demand-reduction mandates.

The fourth Waxman-Markey policy, performance standards requiring new coal power plants to install carbon capture and storage (CCS) technology, is the centerpiece of EPA’s carbon “pollution” rule for new coal power plants.

Waxman-Markey narrowly passed in the House in June 2009, but once exposed as ‘cap-and-tax,’ it became a major political liability. Senate leaders tried to rebrand the proposal as “pollution limits” and “linked fee,” but that fooled no one, so eventually they pulled the plug on all companion bills. Cap-and-trade was a critical issue in the November 2010 elections. In the House, “virtually every close race was lost by a Democrat” who voted for Waxman-Markey, observes Cato Institute scientist Patrick Michaels. In contrast, “every close Senate race was won by a Democrat,” in no small part because they mothballed cap-and-trade.

In a democracy, policy is supposed to derive from statutes, which in turn are supposed to derive from elections. Cap-and-trade remains in such bad odor that neither President Obama nor other Democratic leaders campaigned for it in the 2012 election cycle. Indeed, President Obama ran to the right of Mitt Romney on energy issues, even accusing his rival of being anti-coal. Yet Obama’s EPA now acts as if it has a legislative and popular mandate to implement the old Waxman-Markey agenda.

A somewhat unique feature of American democracy is federalism. This allows each state to be a “laboratory of democracy,” empowering Americans to “vote with their feet” for and against state policy regimes they like or dislike. The Clean Power Plan would stifle such choice and competition.

Today’s ClimateWire ($) reports that the Clean Power Plan would push all states to make their energy policies more like those of California and the Northeast Regional Greenhouse Gas Initiative (RGGI). Perhaps more importantly, the plan would lock in such policies where they already exist.

EPA’s plan assumes that states with aggressive climate policies “will be locked into their ambitious commitments,” notes Brookings Institution scholar Philip Wallach. He finds that troubling:

“It seems problematic as a matter of democratic practice,”  Wallach said. “Maybe [progressive] voters wanted to set ambitious renewable goals when they were in power in 2012, but there’s always a chance that the voting public will change its mind by 2020.”

In June, Ohio became the first state to freeze its power-sector renewable and energy-efficiency standards. If this turns out to benefit ratepayers and local business, other states may want to follow suit. Some may want to go further, and upend greenhouse gas regulations, as New Jersey did in May 2011, when Gov. Chris Christy pulled the Garden State out of RGGI.

The Clean Power Plan would allow only new or re-regulation, not deregulation. EPA and its allies claim the plan gives states’ broad “flexibility.” But the plan would impose state-specific CO2 reduction targets that preclude freezing, relaxing, or repealing cap-and-trade programs, renewable energy quota, and demand-reduction policies.

As my colleague William Yeatman points out, the Federal Power Act limits the reach of federal energy regulators “only to those matters which are not subject to regulation by the States” (16 U.S.C. §824(a)). States already regulate renewable energy requirements and utility efforts to balance energy demand and supply (a process called “integrated resource planning”). By what stretch of the imagination does EPA believe the Clean Air Act authorizes federal environmental officials to regulate such matters?

The Clean Power Plan stomps on both the separation of powers and federalism. Its requirements would be dead on arrival if submitted to Congress as a legislative proposal. It poaches on policy terrain reserved to the states. The Clean Power Plan is a two-front assault on U.S. constitutional democracy.