Anderson Economic Group Work

Four Plausible Scenarios that Could Emerge from Court Ruling on the EPA’s Clean Power Plan

On August 3, 2015, the U.S Environmental Protection Agency (EPA) issued the Clean Power Plan (CPP) final rule. The goal of the CPP is to reduce carbon dioxide (CO2) emissions from existing coal- and natural gas- fired power plants across the country. Through the CPP final rule, the EPA allows states to develop their own plans for achieving their emissions goals.

Following the issuance of CPP final rule, a coalition of states and local governments challenged the rule in the U.S. Court of Appeals. On February 9, 2016, the U.S. Supreme Court issued a stay on the rule until these legal challenges are resolved. On September 27, 2016, the D.C. Circuit Court of Appeals heard oral arguments on this case.

This report is motivated by the timing of the recent oral arguments on this case in the Appeals Court. The fate of this rule will most likely be determined after the U.S. presidential election in November and under a new administration. There are a variety of plausible scenarios that the electric power industry and state regulating bodies might face after the legal challenges to the rule are resolved. These scenarios are not limited to simply upholding or striking down the rule.

The purposes of this report are to:

  • Identify four plausible regulatory scenarios that may emerge from the current stasis on the CPP final rule.
  • Present the potential carbon limits under each of these scenarios for several states.

View PDF