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May 5, 2014

Supreme Court's ruling expands air pollution control efforts, say Stanford scholars

Stanford experts analyze the recent U.S. Supreme Court ruling that states must comply with regulations developed by the Environmental Protection Agency to reduce coal-burning pollutants that float to downwind states.

By Clifton B. Parker and Bjorn Carey

Stanford experts say a recent court ruling expands air pollution control efforts and could lead to cost-effective ways to capture carbon dioxide. (Photo: Aleksey Stemmer/Shutterstock)

The U.S. Supreme Court has given the Environmental Protection Agency more power to establish and enforce air pollution standards for coal power plants. The decision could encourage innovative and cost-effective ways to capture carbon dioxide, say Stanford scholars.

On April 29, the Supreme Court upheld the authority of the EPA to regulate smog from coal plants that drifts across state lines from 28 Midwestern and Appalachian states to the East Coast. The ruling strengthened the White House's forthcoming regulations aimed at cutting pollution from coal-fired power plants.

"This decision, along with the recent decision upholding mercury emissions standards for coal plants, creates legal certainty for the proposition that it will be more expensive to operate coal plants in the future," said Michael Wara, an associate professor at Stanford Law School. "To the degree that getting rid of coal plants is an important climate change strategy for the U.S., this furthers that goal."

An expert on energy and environmental law, Wara focuses his research on climate and electricity policy. He noted the court's ruling leaves the door open for a possible national carbon tax. In June, the EPA is expected to propose new Clean Air Act regulations to reduce emissions of carbon dioxide, the greenhouse gas that scientists say is a major cause of climate change. In the United States, coal plants are the biggest source of greenhouse gas emissions.

"Had the court gone the other way," Wara said, "the EPA might have been reluctant to try to interpret its authority to set power plant standards for carbon in a way that will allow it to use a cap-and-trade or a carbon tax. After this decision, they may be more willing to take that chance. This is important because the more cost effective the agency can be in implementing controls on carbon emissions, the deeper are the cuts it can likely require."

As for carbon pollution standards, the key will be, as usual, "convincing Justice Anthony Kennedy of the legality of what the EPA ultimately decides to do," Wara added.

Expert status critical

The legal foundation for the court's decision, Wara said, was based upon decades of precedent that stand for the idea that when a statute is ambiguous about how to deal with a complex factual situation, a court shouldn't overturn a federal agency's approach so long as it is reasonable.

"In other words, courts shouldn't substitute their judgment for the agency's so long as there is some ambiguity about what to do in applying the law. The key to making this argument is convincing the court that the facts are complex and the law is ambiguous," he said.

Interestingly, the EPA lost the case at the appeals court level, but won at the Supreme Court level, he noted. The nation's highest court evidently considered the interstate air pollution problem one that required expertise.

On the losing side, the states and electric utilities claimed that the EPA had made two big mistakes, Wara said.

The first involved the charge that the EPA had not given states sufficient information for them to craft their own plans for managing their contributions to interstate air pollution, he said. The second one asserted that the EPA had gone too far in imposing reductions on some states.

"The first part failed because the court viewed the industry claims as asking for two bites at the apple. The second claim failed because the court was convinced that the facts – both as to the electricity system and the air pollution problem it produces – were sufficiently complex, and the statute was sufficiently ambiguous, so as to give EPA authority to interpret the statute as it saw fit," said Wara.

Make the price right

In order for the Supreme Court's decision to make a significant positive impact, a carbon tax must be set to make carbon capture financially attractive for utility companies, said Jennifer Wilcox, an assistant professor of energy resources engineering at Stanford School of Earth Sciences. Wilcox is an expert on carbon capture from fossil fuels.

A typical 500-megawatt coal power plant emits around 11,000 tons of carbon dioxide per day. The current cost of separation technology is fairly expensive, averaging between $70-$100 per ton. If the carbon tax isn't high enough to drive power plants toward adopting these technologies, there will be no incentive to capture carbon and business will continue as usual, Wilcox said.

"If emitting carbon dioxide doesn't cost anything other than environmental costs, or doesn't cost enough, utilities are unlikely to capture it," she said.

Wilcox points to the Clean Air Act as evidence for this type of behavior. Although the Clean Air Act has vastly improved air quality in the decades since it was established, only 40 percent of all power plants employ the recommended technologies for separating nitrogen dioxides and sulfur dioxides – chemicals that contribute to acid rain – from their emissions profile. Quite simply, it is less expensive to pay the tax than to install and maintain the scrubbing technology.

Still, the recent decision could spur activity in developing innovative methods for separating and storing carbon dioxide. The state-of-the-art technology for capturing carbon dioxide, called amine scrubbing, was patented in the 1930s as a means for isolating carbon dioxide for use in the food and beverage industry. It is not yet clear that this will be the best strategy for the gigaton-scale of carbon that needs to be captured for preventing negative impacts from climate change.

New technologies could make the process more efficient and cheaper. Widespread adoption of any carbon capture technology would help lower the cost.

Another way to reduce the cost to the power companies involves finding alternate uses for the captured carbon. For instance, there's an existing market for carbon dioxide to be used in a process called enhanced oil recovery, in which injecting carbon into the ground alters the oil's properties and makes it easier to recover. Given the current price of oil, operators might be willing to pay $15-$20 per ton of separated carbon dioxide, offsetting the expense of separation.

"Instead of costing $70 a ton, maybe it's $50. That's not as bad," Wilcox said. "Set the tax at $50 or more, and now carbon dioxide separation from power plants is economically feasible."

Regardless of how the regulations are enforced, Wilcox is optimistic that the court's decision is a sign that the government is taking climate change seriously.

"I'm excited. Anything that the EPA can do to regulate or enforce cleaner emissions I'm very in favor of," Wilcox said. "If the price is right, then this could work. This is one step toward improving the environment and potentially detaching ourselves from our dependence on fossil fuels. Many more steps will be required to solve this gigaton-carbon challenge, but at least steps are being made."

For more Stanford experts on energy, the environment and other topics, visit Stanford Experts.

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Contact

Michael Wara, Stanford Law School: (650) 725-5310, michael.wara@stanford.edu

Jennifer Wilcox, Stanford School of Earth Sciences: (650) 724-9449, wilcoxj@stanford.edu

Clifton B. Parker, Stanford News Service: (650) 725-0224, cbparker@stanford.edu

Bjorn Carey, Stanford News Service: (650) 725-1944, bccarey@stanford.edu

 

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