July 10, 2019

Deregulation Push Continues


KEY TAKEAWAYS

  • The Trump administration finalized the Affordable Clean Energy Rule and the repeal of the Clean Power Plan on June 19, and it is expected to finalize two more major deregulatory actions in the coming months.
  • These rules involve carbon emissions from power plants, vehicle fuel efficiency standards, and federal jurisdiction for regulation under the Clean Water Act.
  • The issuing agencies expect the rules will cut regulatory costs by more than $1 trillion and produce net benefits of more than $380 billion.

Some of the most significant deregulatory actions of the Trump administration are due to be finalized soon. Last month the Environmental Protection Agency finalized the Affordable Clean Energy Rule and the repeal of the Clean Power Plan. In the coming months, the EPA and the National Highway Traffic Safety Administration are expected to finalize the Safer Affordable Fuel Efficient Vehicles Rule, and EPA and the U.S. Army Corps of Engineers are expected to finalize repeal of the Obama administration’s 2015 redefinition of “waters of the United States.”

Predicted Annual Maximum Net Benefits of Upcoming Deregulatory Actions

Deregulation

Clean POwer Plan Repeal and Replacement

In 2015, the Obama administration finalized the Clean Power Plan. The Supreme Court stayed enforcement of the plan pending the resolution of lawsuits challenging the rule. The D.C. Circuit Court of Appeals has held the case in abeyance pending the EPA’s issuance of new greenhouse gas regulations.

The ACE Rule replaces the Clean Power Plan with a list of technologies states can use in setting emissions standards for existing coal-fired power plants. States will have the authority to set their own standards of performance for the plants. In contrast, the CPP would have forced states to shift energy production to meet targets for carbon dioxide emissions from electric power plants.

How the ACE Rule Would Work

Deregulation

Safer Affordable Fuel Efficient Vehicles Rule

In 2012, EPA and NHTSA issued corporate average fuel economy and CO2 standards for model year 2017-25 vehicles. In that rule, the agencies also committed to reassess the standards for model years 2022-25 at a later date closer to implementation. In January 2017, with very few days left in the Obama administration, EPA issued a determination that no changes were needed to the standards set in 2012.

On April 2, 2018, EPA and NHTSA released a revised final determination that CAFE and CO2 standards for model year 2022-25 vehicles were not “not appropriate” and “therefore should be revised.” On August 2, 2018, the agencies proposed setting greenhouse gas emissions and fuel economy standards for passenger cars and light trucks at model year 2020 levels through model year 2026. The agencies also proposed withdrawing a 2013 waiver allowing California to set its own greenhouse gas emissions standards.

According to the two agencies, the proposed SAFE Vehicles Rule would save up to 1,000 lives annually through reduced car usage and faster acquisition of new vehicles; reduce the average ownership cost of new vehicles by $2,340; and cut up to $1.1 trillion in regulatory costs over the operating lives of affected vehicles. The net benefits could reach $377 billion over that time period, or $10.1 billion annually.

Waters of the United States Redefinition

Under the Clean Water Act, EPA has authority to regulate “navigable waters,” which the act defined as “the waters of the United States, including the territorial seas.” Because the statute did not define “waters of the United States,” EPA and the Army Corps of Engineers have issued different definitions over the years, frequently modifying them in response to court rulings.

In 2015, the Obama administration issued the Clean Water Rule, expanding the definition of WOTUS beyond “traditional navigable waters.” Many people impacted by the rule, including farmers, cities and counties, and small businesses, opposed it for being too expansive and confusing. Congress subsequently passed a resolution of disapproval of the rule under the Congressional Review Act, but President Obama vetoed the resolution.

Litigation has led to the 2015 WOTUS rule taking effect in some states but not others. Before the rule went into effect, many states and nongovernment entities like industry associations and environmental groups filed lawsuits to challenge it. The Sixth Circuit Court of Appeals issued a nationwide stay of the rule pending resolution of legal challenges. The Supreme Court subsequently overruled the Sixth Circuit on jurisdictional grounds. In February 2018 EPA and the Army Corps of Engineers finalized a rule to change the applicability date of the 2015 rule to 2020. However, U.S. district courts in South Carolina and Washington enjoined and vacated that action.

With the Sixth Circuit nationwide stay lifted and the applicability date change vacated, the 2015 rule is now in effect in 23 states, part of New Mexico, the District of Columbia, and the U.S. territories. The rule is still stayed across 26 states and part of New Mexico because of ongoing district court litigation. Where the 2015 rule is stayed, the pre-2015 rules are in effect.

The Trump administration’s attempt to repeal and replace the Clean Water Rule is broken into two proceedings: Repeal of the Clean Water Rule, restoring the pre-2015 definition of WOTUS; and revision of the pre-2015 definition to provide more clarity. EPA and the Army Corps of Engineers proposed a repeal of the 2015 Clean Water Rule on June 27, 2017, and in December 2018, EPA and the Corps proposed a new definition of WOTUS. The agencies said their approach is “intended to establish categorical bright lines that provide clarity and predictability for regulators and the regulated community.” The notice and comment period for the new definition ended in April. The final repeal of the 2015 rule is expected in the coming months, and the final new definition is expected toward the end of this year.

 

Issue Tag: Environment