Dan Esty on How to Remake Environmental Protection For the 21st Century

Daniel C. Esty ’86, Hillhouse Professor of Environmental Law and Policy, explains how the White House faces a stark reality when it comes to changing course on climate change and outlines his ideas for creating a regulatory framework that improves environmental outcomes and lowers economic burdens. This commentary will run in the Summer 2017 edition of the Yale Law Report.

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President Trump’s decision to back away from the Paris Climate Change Agreement and to pull back from the Obama Administration’s Clean Power Plan and other environmental commitments has been seen by many observers as bad news. And it is. But not quite as bad news as many fear – and there may be a silver lining in the dark clouds overhead.

First, presidents cannot undo the regulatory frameworks put in place by their predecessors with the stroke of a pen. Thus, while President Trump’s March Executive Order on climate change directs the Environmental Protection Agency (EPA) to “review” the prior administration’s Clean Power Plan and associated greenhouse gas emissions control strategies and to “as soon as is practicable, suspend, revise, or rescind” them, any change in policy will take months or even years.

The EPA cannot simply eliminate the prior commitment to controlling greenhouse gases and put in place a new pro-coal agenda. Nor can it drop air and water pollution regulations. Any change in standards must go through the established regulatory process and be built upon the administrative record that emerges. In this regard, EPA cannot ignore all of the science that says the build-up of greenhouse gas emissions in the atmosphere presents a real risk. To do so would leave whatever new plan was announced vulnerable to legal challenge as “arbitrary and capricious.”

Second, President Trump will not be able to advance plans that defy economic realities. Hundreds of coal-fired power plants have been shut down in the past decade—most in response to the Obama Administration’s Mercury and Air Toxics Standards (MATS). These plants will not be restarted, particularly since low-cost shale gas now represents the cheapest source of electricity in most parts of the country. Given energy market prices and the likelihood that greenhouse gas emissions in the United States will be limited at some point in the not-too-distant future, no utility will invest in new coal power plants.

Third, Mayors and Governors are not bound by President Trump’s withdrawl from the Paris Accord. Across the nation, hundreds of cities and a number of states have committed to the climate change action and will be moving forward with greenhouse gas emissions controls. For example, nine Northeastern states are part of the Regional Greenhouse Gas Initiative (RGGI), which requires utilities to buy allowances for each ton of carbon dioxide they emit. California has put an even higher price on emissions. And many states are moving ahead with creative programs to improve energy efficiency and promote renewable power.

Fourth, hundreds of business leaders urged the President not to pull out of the Paris Agreement – and have signaled that their companies will continue to treat climate change and other environmental issues as serious matters that require a thoughtful response. The President’s recent announcements seem to have had little effect on their resolve.

Simply put, President Trump faces a stark reality. Not only will few, if any, countries in the world follow his climate change lead, many decisions in the United States will rebuff his direction as well.

As the difficulty of wiping out existing environmental rules wholesale becomes clear, President Trump might shift gears and put forward strategies for updating America’s environmental protection program that could command bipartisan support. Indeed, in my recent article, “Red Lights to Green Lights: From 20th Century Environmental Regulation to 21st Century Sustainability, in Environmental Law" (April 2017), I argue that America needs a revitalized approach to its air and water pollution, waste management, and climate change challenges. We need a legal framework that spreads primary environmental governance authority across federal, state, and local levels. And we need a regulatory strategy that goes beyond telling people what they cannot do (“red lights”) and gives them incentives (“green lights”) to solve environmental problems.

In my article, I suggest that we build on Information Age tools that were not available when our legal framework was developed in the 1970s and work to drive innovation in the environmental domain. There are particular opportunities to engage the entrepreneurial spirit and problem-solving capacity of the corporate world, looking to businesses as solutions providers and not just as sources of pollution as they were perceived to be in the twentieth century.

With the right structure of incentives and emphasis on deploying cutting-edge information and communications technologies, we could build a twenty-first-century regulatory program that is lighter and stronger that what we now have in place—improving environmental outcomes and lowering economic burdens at the same time. Both Republicans and Democrats should be able to get behind such a “green lights” strategy.