The Trump administration’s attempt to reverse President Barack Obama’s most sweeping climate regulation rests on a legally risky strategy — redoing the calculations of how much the rule would cost and who would benefit.
The Environmental Protection Agency’s proposed replacement is expected to downplay the money that people and businesses would save from using less electricity, a key feature of the Obama-era greenhouse rule for power plants. People tracking the issue also expect that the agency will count only a fraction of the improvements in public health from reduced smog and soot pollution, and won’t consider any benefits from slowing climate change outside the U.S.
The upshot: The EPA under Trump will argue now that the Obama administration’s rule had more costs and fewer benefits than stated, a change to help improve the comparison when it unveils its own, much less ambitious power plant proposal as soon as next week.
The Obama administration had estimated that benefits from its 2015 rule would outstrip costs — $26 billion to $45 billion — by 2030.
Supporters of the Obama version say those net benefits could be even greater now, because states are on track to meet the climate goals and the costs of clean energy have continued to plummet. And they warn that repealing the regulation could keep older, more expensive coal-fired power plants in operation, adding to consumers’ costs.
The math could be crucial to the success or failure of a number of Trump rules. That could make the rollbacks legally vulnerable when environmental advocates and states sue to overturn Trump’s action, critics of the new proposals say.
“They are cooking the books on technical analysis to try to justify preconceived conclusions that these regulations are bad,” said David Doniger, the senior strategic director of the Natural Resources Defense Council’s climate program who was influential in the Obama administration’s crafting of the original EPA rule.
The EPA did not respond to a request for comment on Wednesday.
Trump administration lawyers reviewing the replacement are already struggling with how to defend a rule that could cost electricity users money but would not do much to address climate change or air pollution, according to a person aware of conversations between the White House and the Justice Department. DOJ would be charged with defending the rule in court.
POLITICO has examined a portion of the agency’s unpublished draft of the new rule, which would allow states to write their own modest regulations for coal plants or even let plant operators seek to opt out entirely, according to a source with knowledge of the broader proposal.
The proposed rewrite of the power plant rule is part of a pattern: Critics say similarly fuzzy math underlies other Trump administration proposals to reverse or stymie action on climate change, such as a recent plan by the EPA and Department of Transportation to halt a planned tightening of fuel efficiency standards for cars and trucks.
Sean Donahue, an environmental lawyer who has represented groups like the Environmental Defense Fund, said he would expect a court to be “very skeptical” of any effort that looks as though the EPA is trying to evade its obligation to regulate greenhouse gases. But he conceded that will depend on the details of the agency’s power plant proposal.
“If it were one or two technical judgments where there’s a difference between this administration and the last one, or this administration and prior consistent practice, that would be one thing,” Donahue said. “But it’s many, many things, all pointing the same way, all pointing toward rolling back greenhouse gas mitigation efforts.”
Trump has repeatedly expressed doubts about man-made climate change, and much of his Cabinet shares a similar view. In contrast, the federal government’s own scientific assessment finds that human-caused climate change will not only raise temperatures but also make extreme weather more dangerous and lift sea levels by one to four feet by the end of the century.
Kate Larsen, director of economic research firm Rhodium Group, said the Trump administration’s justifications for unraveling climate change policies are symptomatic of its broader governing principles.
“A decision we make today is narrowly focused on the impacts to myself and my immediate neighbor in the next week, but you’re not taking into account impacts next year and the following year to yourself, your neighbor, the entire community,” she said.
Environmental experts are also scrutinizing the auto rule proposal, released earlier this month, which would freeze the Obama administration’s aggressive fuel economy standards after 2020 and dial back EPA greenhouse gas rules to match.
The EPA and DOT’s National Highway Traffic Safety Administration argued that the freeze would save billions of dollars in costs. Critics say the administration overestimated compliance costs of the Obama-era auto targets by as much as fourfold, which could significantly tip the cost-benefit analysis in their favor. Another claim that the Trump rollback would save more than 1,000 lives per year — yielding benefits of $77 billion — has also drawn skepticism.
On Tuesday, EPA released a June memo that showed agency staff criticizing a number of “unrealistic” aspects of NHTSA’s modeling. They disagreed with the proposal’s fatality figures, with EPA staff estimating deaths would increase slightly under the freeze. And they thought the rule overestimated compliance costs and the time needed to recoup those costs in fuel savings, all factors that boosted benefits and lowered costs for the proposed freeze. Both EPA and NHTSA dismissed the memo as only one part of a complex review process.
The administration and industry groups have blasted the Obama administration’s use of “co-benefits” — the benefits in improved health or reduced pollution that arise even when they’re not the primary aim of a regulation. (One example: Cutting coal plants’ carbon dioxide pollution under the power plant regulation would not do much directly to improve people’s health, but it would reduce smog.) But Donahue argued that Trump’s regulators sometimes lean on co-benefits to help build the case for their rollbacks.
For example, NHTSA’s modeling credits changes in consumer behavior as the overwhelming factor behind all the lives that the Trump administration contends its auto rollback would save. The agencies argue that under the previous Obama rule, drivers would be more likely to remain in older, more dangerous cars than purchase more expensive, safer ones.
That “would seem to be a co-benefits argument, since the EPA doesn’t have, and NHTSA doesn’t have, the authority to regulate used cars,” said Donahue, who called the paradox “sort of entertaining.”
Counting co-benefits is a long-standing practice for federal regulators, but energy industry groups and Republican state officials grew incensed by the Obama administration’s use of it to justify major regulations.
“The co-benefits thing has ballooned into the biggest scandal in environmental regulation,” said the conservative Competitive Enterprise Institute’s Myron Ebell, who led Trump’s post-election transition team at EPA. “You get very small direct benefits, but you make up, essentially, a lot of co-benefits.”
Still, he contended that the EPA’s withdrawal of Obama’s power plant rule would eliminate a huge amount of costs in the coming years, saying Obama’s regulation represented “just the first emissions cuts.”
“There were going to be more beyond that if the Obama administration had been succeeded by the Clinton administration,” Ebell said. He added: “By cutting it off in the way that they’re doing, we’re avoiding immense future costs.”