Trigger warning: Nerdy analogies; some discussion of taxes.
On Monday, the Obama administration released the final version of its “Clean Power Plan,” which mandates a 32 percent reduction in carbon-dioxide emissions from 2005 levels by 2030.
The rule, which runs for more than 1,500 pages (not counting technical appendixes) is full of lengthy discussions on matters ranging from its own legality (dubious) to calculations of the amount of increased heat-rate efficiency obtainable from power plants in different regions.
But what the rule really reminded me of, more than anything else, was the Death Star.
The Obama Administration’s Death-Star Governance
As you’ll recall, unless you’ve just awoken from a 40-year coma, the Death Star was the giant space station the bad guys built in the original “Star Wars” movie. At the beginning of the film, the Empire has just freed itself from the last vestiges of legislative control by abolishing the Republican Senate. This centralization of executive power has raised questions of how the Empire will continue to govern faraway planetary systems.
The Death Star, which is capable of destroying entire planets, is supposed to resolve this problem by allowing the Empire to present recalcitrant local governments with a choice: go along, or we will destroy you. In the words of Grand Moff Tarkin: “Fear will keep the local systems in line; fear of this battle station!”
If you have a fevered conservative brain like mine, the parallels to the new Environmental Protection Agency (EPA) rule are pretty obvious. After being unable to get a cap-and-trade plan through the Senate, the Obama administration decided to sidestep Congress altogether by having the EPA impose reductions directly on each individual state. If a state chooses not to comply, it risks getting zapped by a federal plan that could be highly damaging to its economy and electric reliability.
The Clean Power Plan’s Exhaust Port
As imposing as the Death Star was, it also had a hidden weakness: a small exhaust port that, if it sustained a direct hit, could set off a chain reaction destroying the entire station. Similarly, the Clean Power Plan contains a provision that, if properly exploited, could nullify many of the rule’s otherwise harmful effects.
On page 899 of the rule, the EPA indicates that a state could be deemed in compliance with the rule through “imposition by a state of a fee for CO2 emissions from affected [electrical generating units, i.e., power plants].” EPA goes on to say that this “plan type would allow the state to implement a suite of state measures that are adopted, implemented and enforceable only under state law” (emphasis added).
This means a state has the option of ignoring most of the previous 898 pages of the rule, with its discussions of improved heat-rate efficiency or dispatch priority for renewable generation. It can instead simply impose a modest fee on carbon-dioxide emissions from electrical generation. This system would be a matter of state law, and unlike most EPA-imposed plans, the details would not be federally enforceable. What’s more, any revenues from the fees could be tied to comparable cuts to state taxes to ensure the overall scheme doesn’t grow the size of government.
A Back-up Plan for Other Attacks
Even most hardcore climate skeptics will concede that if you had to reduce CO2 emissions, a carbon fee would be preferable to command-and-control regulation. By making the fee revenue-neutral, states could offset much, if not all, of the economic damage the CPP otherwise would impose on the economy. Effectively, states that choose this route can keep the EPA’s hands off their electrical grids while simultaneously cutting taxes.
None of this is to say that states shouldn’t challenge the Clean Power Plan in court or that conservatives shouldn’t seek legislative repeal of EPA’s authority. But given the current make-up of the Supreme Court and the Washington establishment, it would be nice if there were a back-up plan in case Justices John Roberts and Anthony Kennedy end up acting like, well, Roberts and Kennedy.
The Clean Power Plan may be a clear example of executive overreach, but the details of the final rule provide states an opening to get out from under its most onerous requirements if they choose. At the risk of a horrible pun, that should provide us all with “a new hope.”