Issue Brief

Opportunities for Flexibility and Cost Savings within EPA’s Greenhouse Gas Rules

Leadership in federal climate policy in the United States has passed from Congress to the Environmental Protection Agency (EPA), which is set to release the next—and so far largest—part of its regulatory strategy in September, when it proposes standards for emissions from fossil-fuel power plants.

On July 18, Resources for the Future convened a small workshop to discuss these proposed regulations. Attendees examined key policy components such as the legal feasibility of regulations and the economic importance of regulatory flexibility. RFF scholars compiled some key insights from the event in a new summary of the workshop.

Participants examined existing regulatory language to anticipate the shape of policy and compliance. They agreed that EPA and the states are likely to have basic legal authority to allow flexibility in compliance (for example, with tradable emissions permits), though disagreement over some important issues remained. RFF scholars also presented economic analysis indicating that substantial cost savings would result from adopting such flexibility.

As the summary notes, “the opportunity for EPA to implement smart regulation of greenhouse gases from existing stationary sources appears legally well founded, and the stakes are substantial. It remains to be seen what options EPA and the states will pursue.”