NFIB’s Clean Power Plan Rule Lawsuit Explained

Date: December 08, 2015

The National Federation of Independent Business has joined with other industry groups, and 24 states, in challenging the Environmental Protection Agency’s “Clean Power Plan” rule, which mandates that states must take actions to reduce carbon emissions from power plants. The rule will result in dramatically higher energy costs in many parts of the country. And the states hardest hit will be those that remain reliant on coal today.

The Obama Administration is once again invoking the Clean Air Act as a sword to mandate greenhouse gas reductions, notwithstanding the fact that Congress never intended to authorize regulation of greenhouse gases. Citing concerns over the costs that such regulation would impose on small business and ordinary Americans, Congress has repeatedly rejected proposals to regulate greenhouse gas emissions. In the 1990s, Congress rejected the Kyoto Protocol, as we might expect Congress to reject any “binding” international agreement that might come out a summit on climate change in Paris. And again—in Obama’s first term—he was unable to convince Congress to enact cap-and-trade legislation to reduce greenhouse gas emissions, notwithstanding the fact that, at that time, his party controlled both houses of Congress. But having failed to enact changes in the law through Congress, the President has since taken a different path. The Administration has advanced the most aggressive interpretations possible of already enacted statutes—so as to impose new regulatory burdens that Congress never intended.

But NFIB believes that the Administration is once more overstepping with the Clean Power Plan. For one it imposes quotas on each state, mandating that they achieve targets for emission reductions—targets that, in some cases, are wholly unrealistic. The plan rewards states that have already taken action to reduce greenhouse gas emissions, but would penalize states that fail to meet their federally mandated reduction targets. To avoid those penalties the rule allows states that are missing their targets to enter into cap-and-trade compacts, which would require those states to essentially purchase credits (at great cost) from states that are meeting their targets. Thus the rule penalizes states that have chosen—for the same policy reasons as Congress—to reject such regulation of greenhouse gas emissions.

Accordingly, the rule raises serious federalism problems because the federal government cannot force the states to enact law that they do not wish to enact. But as we argue—first and foremost—there is a separation of powers problem with the EPA rewriting the Clean Air Act. Once again, we’re fighting in court to enforce the basic principle that only Congress can make law. And once more, we’re defending small businesses against extreme energy-rate hikes.

We are currently asking a federal court to issue an injunction preventing EPA from enforcing the rule against the states. Our hope is that we will ultimately strike-down the rule as another example of executive overreach. For further explanation as to how this rule will affect ordinary small business owners, check out Randi Thompson’s recent editorial in the Reno-Gazette Journal.

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