Followup: Could the EPA Mandate a National Cap-and-Trade Program?

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Quick update: last night I wrote a post about an NRDC proposal on carbon reduction from existing power plants. Basically, they suggest that the EPA should set standards for each state, then allow the states to meet those standards however they want. If they wanted to, states could even trade credits back and forth in order to meet their caps.

My question: If EPA has the authority to do this, why not just mandate a national cap-and-trade plan instead? That would be more efficient, and probably no more politically difficult than the NRDC plan.

Leaving the political issues aside, I’ve gotten some answers—sort of—about EPA’s legal authority, which is based on a combination of (a) a court ruling that CO2 is a pollutant and (b) EPA’s responsibilities under the Clean Air Act. I haven’t dived into this deeply or anything, but apparently NRDC believes its plan is legal because it follows the fundamental structure of the CAA, which generally requires EPA to set out state standards for pollutants. However, some interest groups think that EPA also has the authority to mandate a national cap-and-trade plan.

Long story short, a cap-and-trade mandate might be legal, but also might be risky, especially given the conservative makeup of both the DC Circuit Court and the Supreme Court. So far, there’s no sign that EPA thinks it has the legal authority to create such a mandate. Conversely, the NRDC plan is probably less risky thanks to its state-based structure, though it’s still not a slam dunk either.

If I learn more, I’ll write a followup. I just wanted to pass this along since I mentioned it last night.

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