Our Impact: Recognizing the Clean Air Act’s Potential to Address Climate Change

This is the sixth installment in a 12-part series highlighting the environmental policy impacts of the Nicholas Institute for Environmental Policy Solutions over its first decade.

In mere months, the U.S. Environmental Protection Agency (EPA) is slated to release the final version of its Clean Power Plan, which regulates carbon dioxide emissions from existing power plants under the Clean Air Act by establishing emissions targets unique to each state. The goal: achieve a 30 percent cut from 2005 emissions levels by 2030.

Years before the proposed rule—in the midst of the congressional climate debate—researchers at Duke University’s Nicholas Institute for Environmental Policy Solutions partnered with faculty in the Duke School of Law to explore practical strategies to reduce greenhouse gas emissions using existing authority under the Clean Air Act. These scholars were among the first to recognize that, should Congress fail to adopt a comprehensive bill addressing climate change, the U.S. Supreme Court decision Massachusetts v. EPA would likely require the agency to take action to regulate such emissions under the 40-year-old law.   

“The Clean Air Act grants the EPA and the states a significant amount of flexibility to address climate change,” said Jonas Monast, director of the Climate and Energy Program at the Nicholas Institute. “Since 2009, we have used a combination of legal analysis, economic modeling, and stakeholder engagement to identify options for achieving meaningful emissions reductions in a cost-effective manner. Our early and ongoing work highlights Duke's contribution to one of the most significant EPA rule makings in years.”

In 2009, the Nicholas Institute began holding stakeholder workshops to respond to outstanding legal questions presented by the broad statutory language of the Clean Air Act and its use to regulate a sector responsible for 40 percent of U.S. carbon emissions.

Out of these workshops came roughly two dozen analyses of policy options and their risks and rewards under the law. One of the first—Avoiding The Glorious Mess: A Sensible Approach to Climate Change and the Clean Air Act—suggested that use of section 111(d) of the Clean Air Act could allow the EPA to design a flexible, cost-effective emissions reduction program. Another analysis examined compliance strategies providing multiple benefits for the electricity sector.

“One of the unique things that the Nicholas Institute has done through reports and meetings is to consider how clean energy and efficiency strategies can be used to help states achieve reductions of multiple pollutants, including pollutants like ozone and mercury as well as carbon pollution,” said Vicki Arroyo, executive director of the Georgetown Climate Center. “This work really helped highlight the multiple benefits of these strategies, which is important because different stakeholders may be focused on achieving one pollution reduction goal or another, but they may all still benefit from considering the same suite of strategies.”

John Lyons, assistant secretary for climate policy at the Kentucky Energy and Environment Cabinet, called one Nicholas Institute policy brief “particularly compelling.” It outlines how states whose compliance plans share common elements could allow power plant owners to transfer low-cost emissions reductions across state borders without the need for a formal emissions trading system.

“The exploration of the ‘common elements’ approach has caught national attention and is a recurring topic now being discussed by many states and organizations,” Lyons said. 

In 2013, work to help state utility regulators think about uncertainty in the electricity sector evolved beyond analyses into a game called the Energy Risk Lab when the Nicholas Institute partnered with the National Association of Regulatory Utility Commissioners (NARUC) to make technical improvements in NARUC’s scenario-based role-playing game. The game guides federal and state regulators and utility officials through a series of situations involving the EPA’s proposed Clean Power Plan and the Mercury and Air Toxics Standards—as well as other potential challenges such as suddenly high natural gas prices or an accident that forces the shutdown of nuclear plants. In it, the critical policy and decision makers work alongside one another to make billion-dollar decisions that they may one day face in real life.

“There’s a real need for creative yet credible thinking,” said Tim Profeta, director of the Nicholas Institute, “and I think that’s what we’ve been able to bring to the table.”

The Nicholas Institute continues educating decision makers about their Clean Power Plan compliance choices through timely, objective analysis. Over time, the Nicholas Institute’s regular engagement with state environmental regulators and utility commissions has evolved into an ongoing series of workshops for Southeastern officials to explore compliance pathways and to weigh their tradeoffs.

The meetings, Lyons notes, have given the Southeast states a valuable platform to assess the Clean Power Plan.

“The value of these meetings are numerous but first and foremost, they have brought together regulators from the southeastern states to discuss our regional issues surrounding the Clean Power Plan,” Lyons said. “These states have many similarities in population, economy, manufacturing and heavy dependence on fossil-generated electricity, which results in our concerns on the 111(d) rule being very similar. The leadership that the Nicholas Institute has shown in initiating these discussions have proven invaluable in understanding the potential impacts and opportunities moving forward.”

###

--Story by Erin McKenzie