(Bloomberg) — President Barack Obama unveiled a landmark
set of regulations to combat climate change in a plan that
requires states to cut emissions from power plants, setting up a
red-state, blue-state battle reminiscent of Obamacare.
“No challenge poses a greater threat to our future and
future generations than a changing climate,” Obama said at a
White House ceremony Monday. “We’re the first generation to
feel the effects of climate change, and the last generation that
can do something about it.”
The new rules issued by the Environmental Protection Agency
to set emission standards for each state drew fire from
opponents even before they were announced. States such as
Wyoming and Oklahoma have sued to try to block the rule, and as
details of the final regulation emerged on Monday the U.S.
Chamber of Commerce and other business groups said they would
try to block it in the courts, too.
Just as states challenged requirements under the Affordable
Care Act, Senate Majority Leader Mitch McConnell urged them to
reject the power-plant regulations. Many are likely to be joined
by coal producers and coal-reliant utilities in challenging the
“We will pursue all available options, including
litigation if necessary, to block EPA’s regulatory power grab,”
Tom Donohue, the president of the Chamber, which also led the
opposition to Obamacare, said in a statement.
Resistance to the proposed rules resembles the prolonged
legal fight against Obama’s Affordable Care Act. In June, a
federal court dismissed a lawsuit by the nation’s largest coal
companies and 14 coal-producing states — most led by Republican
governors — seeking to block the EPA’s 2014 proposal to reduce
greenhouse-gas emissions from power plants.
That June 9 ruling from the U.S. Court of Appeals for the
District of Columbia Circuit said it was premature for a court
to act on a rule that had been introduced only in draft form.
Other court challenges are expected.
McConnell, a Republican from the coal state of Kentucky,
took the unusual step in March of advising governors to block
implementation of the rules in their states.
On the Senate floor Monday, McConnell said the EPA’s plan
“represents a triumph of blind ideology over sound policy and
The administration will proceed even if it means court
challenges, White House press secretary Josh Earnest told
reporters Monday, saying he’s “not aware of any specific plan”
to delay them while court cases play out.
Because of the way the Clean Air Act is written, the rule
requires each state to come up with a plan to reduce emissions
from power plants.
“Over the next few years each state will have the chance
to put together their plans to cut carbon pollution,” Obama
said. “And we’ll reward the states that take action sooner
rather than later.”
Obama’s EPA plan requires states and utilities to use less
coal and more wind power, solar or natural gas. The plan is
designed to bring about cuts in carbon emissions from power
plants of 32 percent by 2030.
Anticipating the resistance from states, the agency
unveiled a series of enticements in its final rule Monday that
will make it easier for states that submit plans to cut
emissions, and make it cheaper for utilities in those states.
The agency will give a bonus for renewable projects started
after a state plan is submitted, and clears the way for carbon
trading, which many companies say is the cheapest way to comply.
“It makes it easier for the rank-and-file officials to say
that this is doable,” said Vicki Arroyo, the head of the
Georgetown Climate Center. “It will be relatively painless.”
Power generation, specifically burning coal to make
electricity, is the biggest source of carbon pollution in the
U.S. Until now there was no cap on those emissions.
The EPA plan is the centerpiece of Obama’s climate plan,
which aims to get the country on track to cut its greenhouse gas
emissions 26 percent to 28 percent by 2025 and ink a global
accord to get other nations to address global warming, too.
The regulations are to take effect after publication in the
Federal Register, but they may be stalled if opponents ask for
stay while challenging in court.
The general EPA plan actually uses a complicated formula to
set individual targets for states. Each state must then submit
plans to the agency by 2018 on how it will achieve the EPA-mandated goal, which begin to bite in 2022 and phase in through
It’s that step that may prove problematic, just as many
states refused to set up the insurance exchanges under
Obama referenced the parallel between the two plans at the
White House Monday, saying that critics charging the EPA plan
will harm minority communities by raising their electric bills
are misguided, and if they are serious about helping those
communities they should extend health care.
“You could also expand Medicaid in your states,” Obama
said in a message to the Republican governors.
The legal argument against the EPA plan, which is likely to
find its way to the Supreme Court, centers on whether EPA can
rely on emissions reductions from using less coal or natural gas
and more renewables as a “best system of emissions
reductions.” In previous rules, those systems were seen as
equipment that could be installed on smokestacks.
Legal experts say the administration made a number of
changes that will shore up its chances of surviving in court.
“It’s much more legally defensible,” said Jody Freeman, a
professor of law at Harvard University who supports the EPA’s
rule. “What EPA did in the final rule is really bolstering its
case for why it has this authority.”
For states refusing to submit plans, it would be up to the
EPA to come up with a plan to force power producers to reduce
FirstEnergy Corp. have been among the utilities opposing a wave
of bills in state capitols that would let legislatures block
plans to curb emissions. Those companies say they want the
flexibility at the state level to figure out the best and
cheapest way to reduce carbon emissions.
And the EPA will include an off-the-shelf carbon trading
program, something that would make it much easier for states to
come up with plans to comply, analysts say.
“We expect modest carbon prices to become a reality as
states gradually come around to the efficiency of pricing carbon
And, even in cases where state leaders refuse to play ball,
the EPA has come out with a federal implementation plan that
will apply to power producers there. Those plans might be more
difficult and costly to implement, just as the online market for
health insurance under Obamacare had massive glitches at first.
Just as with the health-care law, the success of this rule
may be determined by Obama’s successor. Democrat Hillary Clinton
supports the plan, but the Republican field trashed it.
“The rule runs over state governments, will throw
countless people out of work, and increases everyone’s energy
prices,” Jeb Bush said in a statement Sunday. “Climate change
will not be solved by grabbing power from states or slowly
hollowing out our economy.”
To contact the reporter on this story:
Mark Drajem in Washington at
To contact the editors responsible for this story:
Jon Morgan at