Obama’s Greenhouse of Cards: Doomed to Collapse or Too Big to Fail?

The Obama administration’s climate agenda is a greenhouse of cards. The jerry-built structure has three stories, floors, or levels. It is unlawful from top to bottom.

The top floor is the Kyoto Protocol-successor treaty that President Obama wants 190-plus nations to adopt at the upcoming COP 21 climate conference in Paris. The final form of the pact is anybody’s guess, but the European Union advocates a treaty reducing global greenhouse gas emissions 60% below 2010 levels by 2050. As explained previously on this blog, actual implementation of the EU’s 60-by-50 target would be a humanitarian disaster for the world’s poor countries.

The floor beneath the climate treaty is EPA’s so-called Clean Power Plan (CPP), which aims to “aggressively transform” and “decarbonize” the U.S. electric power sector. The CPP underpins the treaty because it is the core of Obama’s emission-reduction pledge (the U.S. Independently Determined National Contribution, or INDC) in the COP 21 negotiations. Even with the CPP, Obama’s current and planned climate policies fall far short of his pledge to reduce U.S. emissions 26%-28% below the 2005 level by 2025. Without the CPP, the U.S. negotiating position becomes a farce.

The bottom floor is EPA’s so-called Carbon Pollution Standards (CPS) for new coal and natural gas power plants. The CPS rule is a prerequisite for the CPP, because EPA may not lawfully impose emission performance standards on “existing” stationary sources under §111(d) of the Clean Air Act unless it first (or concurrently) imposes performance standards on “new” sources under §111(b).

Let’s briefly examine why Obama’s three-tiered climate action plan is doomed to collapse–unless, as in the Obamacare cases, courts decide presidential legacy policies are too big to fail. 

The President has made it clear that he won’t send the Paris accord to the Senate for its advice and consent to ratification. He knows it would fail to achieve the requisite support of “two thirds of the Senators present” (Art. II, Sec. 2) by a rather wide margin. Indeed, even when Democrats held a majority of seats, there was no chance the Senate would ratify a Kyoto-successor pact.

Obama thinks he can get around the Constitution by claiming the Paris accord merely updates the 1992 UN Framework Convention on Climate Change (UNFCC or Rio Treaty), in which the United States obligated itself to “adopt national policies and take corresponding measures on the mitigation of climate change, by limiting its anthropogenic emissions of greenhouse gases and protecting and enhancing its greenhouse gas sinks and reservoirs.” The COP 21 agreement would simply quantify each nation’s commitment within that framework, administration officials suggest. But that is exactly what the Kyoto Protocol aimed to do, and nobody ever doubted Kyoto had to be ratified to enter into force.

When the Senate ratified the Convention, it did so based on the Senate Foreign Relations Committee’s advice to President George H. W. Bush that subsequent “decisions by the parties to adopt targets and timetables for limiting emissions would have [to be] submitted to the Senate for advice and consent.” Thus, Obama’s attempt to commit the United States to emission-reduction targets and timetables “would alter the ‘shared understanding’ of the Convention between the Senate and the executive branch and would therefore require the Senate’s advice and consent.”

Besides, for Obama, a major purpose of the COP 21 agreement is to set the CPP in “political amber,” as my colleague Chris Horner puts it. Obama is betting that once an agreement is reached in Paris, U.S. policymakers and courts won’t dare overturn the CPP, fearing to be castigated by Democratic pols, environmental groups, liberal media, and foreign heads of state for “breaking America’s promises” to the community of nations. Using a non-ratified treaty in such manner to dictate U.S. domestic policy raises profound separation of powers concerns.

Turning to the CPP, it too flouts the constitutional framework. Congress never authorized EPA to “aggressively transform” and “decarbonize” the U.S. power sector. Even when Democrats controlled both chambers, a bill authorizing EPA to restructure the power sector via Clean Air Act rulemakings would have been dead on arrival. Obama seeks to go around the Senate so EPA can go around Congress.

The CPP is unlawful in numerous ways but the main flaw is perhaps most clearly explained in the U.S. Chamber’s recent petition for a stay of the rule.

Section 111(d) of the Clean Air Act applies to existing sources, which include any “building, structure, facility, or installation” that emits air pollutants. Accordingly, EPA’s regulatory authority is limited to emission control technologies or practices that can be installed or adopted inside (or at) the source. In contrast, the CPP applies to source owners and operators. It primarily aims to control the investments and transactions of owners and operators outside the source–indeed, anywhere in the national electricity marketplace. The CPP establishes emission reduction targets that are so stringent, owners and operators of coal and gas power plants can comply only by building new renewable generation outside the source and/or buying emission credits.

As for the “Carbon Pollution Standards” rule, it is effectively a carbon capture and storage (CCS) mandate for new coal power plants. As explained previously, to be lawful, new-source emission controls must be “adequately demonstrated”–available at reasonable cost. Yet utility-scale CCS power plants are still not affordable without lavish taxpayer– and/or ratepayer-subsidies.

An even more fundamental flaw, first spotted by my colleague William Yeatman, is that CCS is not a “best system of emission reduction”–the required basis for setting new source standards under §111(b). That is because, in actual commercial practice, CCS increases rather than reduces emissions.

Even with subsidies, most CCS power plants are not economically viable unless the utility can sell the captured CO2 to oil companies for use in enhanced oil recovery (EOR) projects. When combusted, the recovered oil emits CO2. National Energy Technology Laboratory data indicate that, on a life cycle basis, CCS combined with EOR releases about 1.4-1.6 tons of CO2 into the atmosphere for every ton stored under ground. William and I alerted EPA to the counter-productiveness of carbon capture and storage in separate comment letters on the CPS and CPP rules.

This just in! Last Friday, EPA finally published its Response to Comments on the CPS rule. On page 4-32 of the document, EPA cites to and summarizes William’s analysis that the rule would promote enhanced oil recovery, which would lead to a net increase in emissions compared to conventional coal power plants. However, EPA does not attempt to rebut the analysis or address it on the merits. That suggests EPA knows William is right.

Here’s how things would play out in a fair world. Commercially-viable CCS power plants actually increase emissions, so courts would strike down the “Carbon Pollution Standards” rule. They would then toss out the  “Clean Power Plan,” because (to repeat) §111(b) new source rules are the legal prerequisite for §111(d) existing source rules. They would also overturn it because §111(d) regulates sources whereas the CPP primarily regulates market activities beyond the source. With the CPP in tatters, the United States could not deliver on Obama’s pledges in the COP 21 negotiations. The Paris conference would take its place beside the failure that was Copenhagen. The next president and Congress would be free to chart their own energy and climate policies.

‘Tis a consummation devoutly to be wished. That the ground floor of the edifice is a “system of emission reduction” that actually increases emissions reminds of an old proverb:

For want of a nail the shoe was lost.
For want of a shoe the horse was lost.
For want of a horse the rider was lost.
For want of a rider the message was lost.
For want of a message the battle was lost.
For want of a battle the kingdom was lost.
And all for the want of a horseshoe nail.