McCarthy Confident in Clean Power Plan Legality

By Patrick Ambrosio

Aug. 11 — The head of the Environmental Protection Agency is confident that the agency's carbon dioxide standards will be upheld in the courts and would be difficult for future administrations to reverse.

EPA Administrator Gina McCarthy said Aug. 11 that the agency's Clean Power Plan is “quite legally solid,” though she acknowledged that the legality of the regulation will be debated “endlessly” over the next few years.

The final Clean Power Plan (RIN 2060-AR33), released Aug. 3, is projected to reduce carbon dioxide emissions from the U.S. power sector by 32 percent below 2005 levels by 2030. The agency dropped a proposed energy efficiency component of the rule that critics had argued would illegally require emissions reductions beyond the fence line of the power plants themselves, a move that attorneys said makes the final rule more legally defensible.

“It will stand the test of time in the courts,” McCarthy said during remarks at a Resources for the Future event in Washington, D.C.

The Clean Power Plan already was targeted by an early lawsuit that ultimately was dismissed by the U.S. Court of Appeals for the District of Columbia Circuit because the rule at the time was not yet final (In re: Murray Energy Corp., 788 F.3d 330, 2015 BL 180996 (D.C. Cir. 2015).

States and utilities that oppose the rule have asked the D.C. Circuit to rehear those challenges now that the rule has been signed (In re: Murray Energy Corp., D.C. Cir., No. 14-1112, motions filed 8/6/15).

Future Administrations Face ‘Significant' Hurdle 

McCarthy, when asked how a future administration could alter the Clean Power Plan, said any effort to reverse it would face a “significant hurdle.”

She noted that there is a “pretty solid record” supporting the rule, dating back to the endangerment finding on power plant carbon emissions.

“When you have a final Clean Air Act rule, it's a pretty solid obligation,” McCarthy said.

By the time a new administration takes over in 2017, there will be a “significant number” of state plans outlining how states will move to comply with the rule, McCarthy said. The final Clean Power Plan requires states to file at least an initial submission by Sept. 6, 2016. Final plans would not be due until Sept. 6, 2018.

McCarthy Highlights Trading Benefits 

The EPA chief touted the agency's draft model rule, released alongside the Clean Power Plan. The draft rule proposes two kinds of emissions trading programs, a mass-based trading program that would see the EPA establish state emissions budgets based on the total amount of carbon dioxide allowed, with allowances based on historical generation, and a rate-based program that would require power plants that don't meet a specific emissions standard to acquire a sufficient number of emissions rate credits to offset excess emissions.

McCarthy said the focus on emissions trading allows states to “leverage” the power of the market in order to multiply compliance options and minimize costs.

“No plant has to do this alone,” she said. “No state has to do this alone.”

The Clean Power Plan allows states to link into markets without requiring a formal mechanism to do so, McCarthy said. States will be able to maintain their independence without passing on “less-expensive” compliance options by informally dealing with other states that have the same type of trading program, be it mass-based or rate-based, she said.

To contact the reporter on this story: Patrick Ambrosio in Washington at

To contact the editor responsible for this story: Larry Pearl at