A Different Sort of Power Plan

A brief discussion of Trump’s Executive Order and attempt to undo the CPP.

I don’t have time to write something detailed about Trump’s recent Executive Order aimed at dismantling Obama’s nefarious attempts to drag America’s energy sector into the 21st century, but I’ll say a few things.

First the Clean Power Plan. Much like someone living near a coal-fired power plant built in the 1960s that produces unsafe levels of Sulfur Dioxide and low altitude ozone (smog), we can breathe an uneasy sigh of relief thanks to the convoluted nature of the Administrative state. Section 4 of the order is team Trump’s attempt to get rid of the Clean Power Plan, and the general consensus is that it’s going to be a little harder to do then with the stroke of a pen. As I stated way back in January, this is going to be a fascinating time for admin law nerds.

One thing that could come up (and I thought maybe we were going to see with the Army Corps’ about-face on Standing Rock) is a better test of Rehnquist’s concurrence in State Farm (I did say “admin law nerd,” so you were warned). Real quick, State Farm is a Supreme Court case that deals with what agencies need to do when they change their minds, and is often cited for the “hard look doctrine” — the idea that courts won’t second guess an agency’s decision to reverse course (or do other things), but they will check to make sure the agency itself took a “hard look” at the facts. In other words, after the cumbersome rulemaking process an agency can’t just say ¯\_(ツ)_/¯. Rehnquist concurred in the judgment but suggested that a change in the politics of the white house was a fine reason to change course. That was not the majority view, and has never (to my knowledge) been explicitly tested. I’ll bet it gets tested now.

I say “uneasy sigh of relief” because I do think it’s important, even for those among us who may have been politically aligned with Barry, to question the normative value of doing policy via impenetrable bureaucratic mishigoss. I welcome complexity — because science, like health care, is complex — but the more people feel isolated from the process, the more they might reach out to leaders who promise simple solutions while simultaneously not understanding the problems. Not that that would ever happen.

The bottom line on the Clean Power Plan stuff is that environmental non profits have likely begun lighting the Beacons of Gondor, legions of ambitious nerds are amassing on both sides, and the ensuing noticing, commenting, and litigating will take a minute. The CPP wasn’t going to be implemented in a day, and it won’t go away over night.

So, what about the rest of the Order? There’s a fair amount of fluff, as is the case with all EOs. Insofar as it sets out policy goals (the fluffiest part, usually) it somewhat insanely does not mention Solar energy:

“(b) It is further in the national interest to ensure that the Nation’s electricity is affordable, reliable, safe, secure, and clean, and that it can be produced from coal, natural gas, nuclear material, flowing water, and other domestic sources, including renewable sources.”

Leading with coal and not mentioning solar makes unfortunately obvious sense for political reasons. In practical terms it’s like saying “We will make this city safe for all forms of pedestrian travel, including tandem bicycles, razor scooters, and other things.” I will try to write more about how coal has been declining for decades — I have just started reading Richard Revesz and Jack Lienke’s Struggling for Air — and how there are roughly 10x the amount of jobs in the solar industry than in coal. For now, just trust me on how silly that oversight is.

A good example of the fluffy nature of this and all EOs comes at the end of Section 2(a). After imploring agency heads to review (not even rescind, or angrily crumple into paper balls) various rules, regulations and policies, it ends with “Such review shall not include agency actions that are mandated by law, necessary for the public interest, and consistent with the policy set forth in section 1 of this order.” A lot of this EO is basically saying to the EPA “don’t do anything extra that you weren’t already required to do,” and with Scott Pruitt at the helm that is like asking the EPA to remember to unlock the doors to the building before going inside.

One of the saddest parts is the rescission of various guidances and previous executive orders regarding the Social Cost of Carbon. To again tell a long story shortly, Obama’s EPA and OMB had done a pretty good job of requiring Federal Agencies to consider the social cost of carbon when weighing the costs and benefits of their actions. (The social cost of carbon is about $35/metric ton of C02, and is designed to calculate the additional cost that releasing that ton of carbon incurs in terms of temperature rise, and all the other bad stuff. You can still read about it on the EPA’s website — take screenshots!). This is sad because at bottom environmental policy in this country has been about accurate valuation. Pollution is a negative externality, and all we’re asking is that firms internalize that cost, which then may or may not be borne by the market. But at that point we’ll at least be honest about value. Moving away from a social cost of carbon (or a carbon tax, or cap and trade, or any other mechanism for making fossil fuel producers and consumers (like me!) internalize cost) is bad economics, and also a covert way of providing yet another unnecessary subsidy to the fossil fuel, and particularly coal, industries. If you’re a fan of honest government and the free market this is not for you.

There is more here, both in terms of this EO and in terms of Trumpian energy and environmental policy generally, but it will have to wait. I will try to write something at least about Revesz and Lienke’s book, which is short and so far really worth reading.