Working Paper

The Elephant in the Room or the Elephant in the Mousehole? The Legal Risks (and Promise) of Climate Policy under §115 of the Clean Air Act

Oct 31, 2016 | Nathan Richardson

Summary

Is Section 115 of the Clean Air Act a viable alternative or complement to the Clean Power Plan? This paper critically examines Section 115 and its potential breadth and flexibility for regulating greenhouse gases, concluding that it holds great promise but also comes with legal risks.

Key Findings

  • For several reasons, there appears to be growing interest from academics, environmentalists, and others in using Section 115 of the Clean Air Act, which is aimed at international air pollution, to shape future climate policy.
  • Section 115 might allow EPA and the states to pursue climate policy via flexible, economy-wide regulation up to and including emissions trading systems or other policies. Recent work by leading legal scholars is highly optimistic about these prospects.
  • But Section 115 is skeletal and rarely used. EPA rejected it back in 2008 and has used other tools to target carbon pollution, such as the Clean Power Plan under Section 111(d) and vehicle fuel economy standards.
  • Optimism about Section 115 should be tempered by some underappreciated legal risks. These risks vary in severity and none are obviously fatal, but taken together they are substantial.
  • Some risks are similar to those faced by the Clean Power Plan, and the outcome of that litigation will be an important signal for Section 115’s prospects.
  • Despite these risks, Section 115’s great potential warrants its exploration by EPA, albeit with caution.

Abstract

Climate policy in the United States is near an inflection point. With Congress uninterested in new legislation, focus at the federal level for most of the last decade has been on the Clean Air Act, but whether regulation under that old statute can successfully address carbon emissions remains unclear. Under President Obama, the US Environmental Protection Agency (EPA) has focused on two core programs—vehicle emissions standards and the Clean Power Plan, aimed at fossil fuel power plants. But with the latter of these programs under legal challenge, and both falling short of the flexible, economy-wide policy many believe is necessary, academic and policy attention is turning to an additional Clean Air Act provision. §115 of the Clean Air Act is aimed at international air pollution, and its advocates suggest it could be a vehicle to achieve deeper emissions reductions, perhaps including nationwide cap and trade or a carbon tax. This paper critically examines §115 and its supporters’ claims, concluding that it holds great promise but also comes with legal risks. A court considering the inevitable legal challenge to §115 regulation might deem it a legal “mousehole” that Congress could not have intended to carry the weight of the climate policy “elephant,” or it might rule that §115 is limited to “conventional” pollutants rather than extending to carbon. There are strong counterarguments to both of these, but each remains a real legal risk and has likely been underappreciated by supporters of §115. Even if §115 survives such facial challenges, other legal challenges (if successful) could prevent it from being able to match its advocates’ ambitions. Most of these narrower challenges appear relatively weak, however. §115’s promise makes it worth pursuing, but with caution.

This paper is forthcoming in the Administrative Law Review.